Sizing up the Republican Tax Plans
Republicans in both the house and the senate have been working on legislation to improve (destroy?) the tax system by the first of the year. In the Donald Trump administration lower taxes through tax reform have been a hallmark to the platform he ran on and main talking points since his election. We are about to see those promises unfold. But, the work that has been done so far is confusing to most and even those that have been following closely don’t know why there is such contention even among some republican. Reconciliation has a lot to do with it. Unable to lower taxes in any bill due to the corrupt nature of the federal government and their need for more and more funds. The requirement for any bill to pass the senate is 60 votes. Unless, the laws are written and passed under reconciliation which requires the bill to be revenue neutral and is part of the budgeting process. If so, the bill can pass with only 51 votes in the senate. Since the CBO scores the bill before congress can and vote on it, this plays a big part in how the bill is perceived in the general public. Everyone wants lower taxes (ironically even most people who don’t pay federal income taxes) However, nobody wants to pay more. So, it is very hard to pass a bill that even slightly raises taxes on a majority of people. The lens that people wanting higher taxes for everyone will use the talking point that the middle class (majority of voters) will be the on hook for taxes the rich will no have to pay. See the chart below to get an idea of how much the tax plan changes things. If everyone has to pay a dollar up front, but the economy grows due to the shrinking government and waste, and everyone benefits with a stronger dollar and better living standard why do people complain? It’s human nature to not want your money taken or your services diminished. Children often think in this manner. I want it now and I don’t want to wait or earn my reward. It has to be taught and practiced to be seen. Saving over time is a chore, but the greatest personal life can only be achieved by saving and not wasting. Our government should do the same. As a society, we are infinitely better off with a strong dollar and money in the bank than a weak dollar and a crippling national debt. It’s time to stop paying for your neighbors pizza and Chinese food on your credit card and just ask them over to dinner. We may all just start to get along eating better. Who knows, with all them money we save, we might even get one of those unemployed bureaucrats to clean your house.