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First, let me throw out a prediction. The Republican Tax Reform law only applies to our tax returns in 2019, so 2018 will be the last ones under the Obama rules. . . and 2018 will be exploited as being the horrors of Trump's plan even though it will be the final frustrations of Obama's economic influences.
That said, in February, paychecks will begin to show the reduction of taxes, and therefore Americans will begin to take more money home as a result. This is going to be good for the GOP. . . and I suspect the Republicans will not only hang on to both Houses of Congress in the November mid-term elections, but also increase their numbers.
The Democrats, in their usual fashion, are demonizing the tax reform law without telling Americans the truth. According to the leftists, the new tax law gives a massive tax break to the rich, while slamming average Americans with higher taxes. 48% of America will believe them without knowing any better because nearly half of America doesn't pay taxes in the first place.
While the rich will be, for the most part, receiving a tax break, for income earners making over a million bucks per year, their cut is only 6%. Those among the wealthy who depend heavily upon the deductions that have been eliminated may actually pay a little more. Meanwhile, the reduction in income taxes paid as a result of the reduction in rates for folks earning $40,000 to $75,000 is 37%.
The reduction in taxes, including that for wealthier persons and corporations, is expected to encourage 3 percent growth in the economy over the next decade. Some estimates even recognize the possibility of 4% overall economic growth, and the President’s Council of Economic Advisers believes the economy could grow between 3 and 5 percent, a range that was independently verified by three economists from Boston University. The growth will be a direct result of decreasing taxes for 93% of taxpayers in 2019, putting more money in the pockets of producers and consumers. As a result, people will save more, spend more, and business will produce more product and hire more people as they increase wages for many of their current employees. The result? More tax revenue as a result of an increase in tax payers, and taxable income (which also kills the argument by the liberal left Democrats that the new tax law will increase the federal deficit).
The new law also repeals the Obamacare individual mandate, which means that you will no longer be forced to purchase government influenced or controlled health insurance. The result will be more health care choices, a return to competition in the free market, a reduction in overall medical industry costs as a result of that competition, and States reestablishing their own safety-nets as locally needed. Eliminating the Obamacare individual mandate will not reduce any taxpayer’s income, but will reduce the tax bills for many individuals and families.
The claim that the loss of the mandate would result in deaths has also been proven to be wrong. If anything, lives will be saved, and the quality of care will increase.
The drop in the corporate tax rate will not only encourage economic growth, but will encourage American companies to return to the States. The liberal left Democrats have always claimed that Republican trade policies have sent American companies overseas, when in reality it has been the high tax rates against corporations that has been chasing them out of the country. The corporate tax rate in the United States has been at 35%, which is among the highest in the world. With the new tax law dropping the corporate tax rate down to 21%, it will make doing business in the United States globally competitive again, which means businesses will invest more, hire more workers, and return to our shores if they left under Obama.
History shows that reducing corporate tax rates is good for business. In 2007, Canada began lowering its corporate tax rate, and as a result wages grew significantly faster in Canada than other comparable countries. Various studies show that cutting corporate taxes is good for economies, and increases wages for workers.
The new tax law is also good for retirees, whose Social Security and investment income will not change in the way they are taxed, but their tax bills will be better as a result of the doubling of the size of the standard deduction.
After all of the dust settles, lower and middle level incomes will get the heftiest tax reductions, and those folks will also receive a greater benefit because the corporate tax reforms will increase business growth and opportunity, which always results in higher wages and more job opportunities.
The new tax law is also good for retirees, whose Social Security and investment income will not change in the way they are taxed, but their tax bills will be better as a result of the doubling of the size of the standard deduction.
After all of the dust settles, lower and middle level incomes will get the heftiest tax reductions, and those folks will also receive a greater benefit because the corporate tax reforms will increase business growth and opportunity, which always results in higher wages and more job opportunities.
-- Political Pistachio Conservative News and Commentary
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