Based on numerous, comprehensive, economic analyses, both the House and Senate versions of the proposed tax bill appear to favor the rich and corporations — not the middle class.
Seemingly, millions of ordinary households either will not benefit at all from the proposed tax bill or will end up owing more to the IRS than they do now.
What is uniquely ridiculous is our Republican-dominated Congress appears to be trying to appease the current President’s desire to get something done to which he can lay claim anything, it seems, is better than nothing, no matter how bad for the middle class.
Instead of helping the sorely-hurting middle class, our current president and numerous Republican Representatives and Senators are telling the American people that this bill will help both them and the economy.
Unfortunately, history relates a different outcome from the tax bill’s inherent premise.
The proposed tax bill seems to be born of trickle-down economics, a failed theory embraced by President Ronald Reagan, a president for whom I voted twice.
Back in the late 1970s, trickle-down’s economics suggested that lower corporate tax rates would eventually benefit people in all income levels.
Instead, numerous subsequent economic studies determined the opposite occurred. Income inequality worsened. Between 1979 and 2005, it seems after-tax household income rose minimally for the bottom one fifth of taxpayers, while the top one fifth of taxpayers’ after-tax household income increased by 80 percent.
In addition, it seems the top 1 percent taxpayers saw their income triple. Instead of trickling down, it appears that, for the richest taxpayers, prosperity trickled up.
In the long run, the middle class will pay more in taxes with the proposed tax bill than under current law and the rich will pay less.
To my knowledge, copious research has disproved the notion that cutting corporate taxes and taxes on the rich helps the economy. The tenets of the House tax bill suggest the rich will get richer and the middle class and the poor will get poorer. How does that scenario help the overall economy?
One must ask himself: Why is the Congress proposing a tax bill that allows significant tax benefits to lapse for the poor and middle class over time, but not lapse for corporations and the wealthy?
Does anyone honestly believe that, as profits for corporations increase with tax cuts, big business will increase meaningful benefits for the working class?
Historically, it seems that, when corporations get tax cuts, the trickle down theory results in increased profits trickling down into the pockets of the wealthy, CEOs, and corporations and, not into the pockets of poor and middle class taxpayers.
To my knowledge, there is no historic research that indicates that, when corporations get tax cuts, they hire more workers, increase workers’ pay, or increase noteworthy benefits for their employees.
Many middle class families living on Long Island currently claim state and/or local tax deductions on their federal tax returns.
A recent economic study indicates ending the state and local deductions could cost Nassau and Suffolk taxpayers up to $2.5 billion per year — something the House of Representatives tax bill includes.
On the aforementioned basis alone, a large percentage of taxpaying residents living on Long Island would see a major increase in their taxes over time.
Exemptions built into the House bill seem to disappear for the middle class eventually, while corporate tax exemptions would remain in place. The House tax bill sure seems like a bait and switch to me.
It seems that, for every dollar New Yorkers send to Washington, we get back only about 80 percent of that money, while a state like South Carolina gets back all their money-input plus an extra 35 percent.
In other words, states bearing the heaviest tax burdens are subsidizing states that make the least tax contributions.
Now, the House tax bill wants New Yorkers to pay even MORE into the general tax pot, thereby, reducing Long Islanders’ disposable income.
Another proposed inclusion in the tax bill is the repeal of the inheritance tax.
Currently, the estate tax affects a small set of wealthy Americans, enacted only when someone dies and leaves assets worth more than $5.49 million to inheritors.
In other words, jointly, parents presently can leave $11 million in assets to their children without triggering the application of the estate tax.
If the population that would benefit by such a rollback seems to represent only .2 percent of society, one must ask: Why would an estate tax rollback be necessary to help our economy?
Well, I guess we might look at who is running our country at present: our current president, a self-proclaimed billionaire (of course, we do not know for sure because he has not released his income tax filings, unlike all prior, modern presidents); Education Secretary Betsy DeVos (billionaire?); Commerce Secretary Wilbur Ross (billionaire?); Secretary of State Rex W. Tillerson (multi-multi millionaire?); Transportation Secretary Elaine Chao, agriculture secretary (multi-millionaire?); Sonny Perdue (multi-millionaire?); Housing Secretary Ben Carson (multi-millionaire?); and, Gary Cohn, chief of the National Economic Council(multi-multi millionaire?).
Need I say more?
It seems that under the current tax bill, supported by our current President and many in our Republican-dominated Congress, the average taxpayer will not realize any benefits and, most likely, will pay more taxes rather than less unless a family’s household income exceeds $500,000.
As it seems the vast majority of the tax bill’s breaks go to the wealthy, their inheritors, or to corporations (in an economic environment with a booming stock market and a near-full employment economy, which our President touts frequently), the rationale for this kind of tax bill is definitely inconsistent with our current economic circumstances.
If you believe, as I do, that the current tax bill, if passed, would result in a gravy train boon for the wealthy and corporations and, a diminishment of the middle class. I urge you to contact our New York State senators and your representatives in the House to vote against the proposed tax bill in its present form.