With the release of the GOP tax plan, the Democrats have denounced this as a tax relief plan for the rich. They also said that it raises taxes on the middle class. Within minutes of the announcement of the plan, a group of Democrat senators each tweeted out claims that middle class Americans will see a tax increase of just over $800 per family. So is that true?
The Washington Post fact checked the tweets and gave them four Pinochios. That's a rating which means the claims are just totally false. Indeed, the claims were so wrong that most of the senators deleted their tweets. Even the Washington Post agreed that the tax plan would cut middle class taxes.
And what of the rich? If you are really super rich and have over $1million income each year, your tax rate will not go down. You will, however, lose deductions like the one for state and local income taxes and most of the one for property taxes. That means a tax increase not a decrease. Someone earning $2 million in a state with a 5% income tax will see at least an overall tax increase of $40,000 per year. Now it is true that the plan ends the estate tax in 2022. That could be a benefit to the wealthy, but only when they die. And by 2022, who knows what will happen.
So how can the Democrats call this a tax plan for the rich? One answer is dishonesty, but let's try to come up with some other basis for their position. The only one is this: the plan cuts business taxes and most businesses are owned by wealthy people. That's actually true, but a plan cutting business taxes is not the same as a plan cutting taxes on the wealthy. Many businesses will use the extra funds to invest in new plant and equipment. That means more jobs and higher wages for middle income Americans. So would the Democrats say that the tax plan is a boost for the middle class in this manner? Nope, even though they should. The reality is that if the tax plan boosts investment and speeds economic growth, everyone in the USA benefits. That includes the rich, the poor and those in between. Indeed, this is the entire point of the tax plan.
There are many issues that need to be decided in coming to a final tax plan. It would help, however, if the opposition tried, at least, to be honest about the effect of the bill.
The Washington Post fact checked the tweets and gave them four Pinochios. That's a rating which means the claims are just totally false. Indeed, the claims were so wrong that most of the senators deleted their tweets. Even the Washington Post agreed that the tax plan would cut middle class taxes.
And what of the rich? If you are really super rich and have over $1million income each year, your tax rate will not go down. You will, however, lose deductions like the one for state and local income taxes and most of the one for property taxes. That means a tax increase not a decrease. Someone earning $2 million in a state with a 5% income tax will see at least an overall tax increase of $40,000 per year. Now it is true that the plan ends the estate tax in 2022. That could be a benefit to the wealthy, but only when they die. And by 2022, who knows what will happen.
So how can the Democrats call this a tax plan for the rich? One answer is dishonesty, but let's try to come up with some other basis for their position. The only one is this: the plan cuts business taxes and most businesses are owned by wealthy people. That's actually true, but a plan cutting business taxes is not the same as a plan cutting taxes on the wealthy. Many businesses will use the extra funds to invest in new plant and equipment. That means more jobs and higher wages for middle income Americans. So would the Democrats say that the tax plan is a boost for the middle class in this manner? Nope, even though they should. The reality is that if the tax plan boosts investment and speeds economic growth, everyone in the USA benefits. That includes the rich, the poor and those in between. Indeed, this is the entire point of the tax plan.
There are many issues that need to be decided in coming to a final tax plan. It would help, however, if the opposition tried, at least, to be honest about the effect of the bill.
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