One Issue Today: Taxes
The tax plan was released and for the first time we have details. Again:
– How could all those passing judgement before, do so without the details?
– How can you take them seriously now? They already played their hand.
– In our world, if you showed your prejudice and cards criticizing something you didn’t have the facts on, then your credibility now is zero.
However, that didn’t stop Democrat leaders like Schumer and Pelosi labeling it a plan for the rich and the MSM immediately presenting negatives. Just what you would expect, but a shame nonetheless.
With that here’s our thoughts.
We now know the brackets. They go from seven to four.
The 39.6% bracket remains.
How can they say this is a plan for the rich?
Everyone below the top bracket gets a federal break.
The first $24K of income is federally tax free for all. (Up from $12K)
The 12% bracket goes from $24K to $99K. (Joint filers. $45K single filers)
The 25% bracket then kicks in up to $260K. (Joint. Single filers $200K)
The 35% bracket goes from $260K to $1M. (Joint and $500K Single filers)
The 39.6% bracket is from $1M on. (Joint filers. $500K Single Filers).
Every assessment of the average family income in America ($55K) says the family wins in this program. EVERY.
Every person on low fixed income pays nothing to the federal government up to $24K.
For the high income family making $2M, they still owe the federal government $396,000 of the second million. (Plus state taxes are no longer deductible, and health care taxes that are staying).
Is there anything there that favors the rich? Now let’s look at deductions.
The MSM made a big thing of new mortgage deductions (“NEW”, old mortgages are grandfathered in). You can get a deduction on a mortgage up to $500K under this plan, not $1M as current. Is that a favor to the rich? Who has the million dollar mortgage? Is it the middle class working American or the rich? Yet the MSM made a big thing over this.
Next they attacked the estate tax. The plan calls for the doubling of the estate tax passage amount now and full elimination in 2024. We will say this again. Those with money do not pay this tax. They hire estate attorneys and set up trusts. Go check the numbers and you’ll see. In fact 99.9% of estates do not pay any estate tax.
Then came the issue we were talking about for the past month. The state and local taxes. The bill allows for a deduction up to $10K for this. What this means is those in high tax states will lose some deduction (hello NY, NJ, Ct, Ill., and Calif.). Other states will now pay their fair share of federal tax and not more because the high states have such large taxes.
We have said before that fairness to us seems to be we all pay the same in federal tax and not different rates because of the state we live in. You have a problem in say New York or California, then try lowering your state taxes and being more like Florida and Texas. You don’t want to lower them? Then stop asking other states to pay your bill.
You see, your vote matters. You vote taxes, you pay the bill.
Here’s a chart that will illustrate that. It uses an income of $75,000 and what it looks like after paying taxes in 11 popular US cities. The chart shows annual take-home pay in each city.
Dallas, Nashville, Miami and
States like Washington, Florida, Tennessee and Texas don’t have state income taxes, so a $75,000 earner will bring home a bigger paycheck there than someone in California or New York. Should they pay more because other states decide to spend more?
Here’s another chart. We took New York versus Miami for a single paycheck.
In other plan pieces:
The 401K deduction allowance remained the same, so all the noise in the MSM that it was going away was wrong.
Finally, the corporate tax would go down to 20%. Some liberals and MSM members call this corporate welfare. Just plain dumb. It will make us competitive in the world economy and drive investment here. End.
This is a low and middle class working family plan. Those calling it a plan for the rich are simply wrong.
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