Tax Reform is Here

First time in a long time it looks like we have real tax reform….or do we?

Whatever your opinion about the proposed tax reform, if what is proposed or not is dependent on which interpretation you believe. On one hand, Democrats make these claims: the GOP tax proposed tax reform bill will increase taxes on the middle class, take health insurance away from 15 million Americans, will increase taxes on the poor, will cut Medicare and Medicaid, and will explode the deficit, and will make the rich richer. Let’s look at those claims one by one:

The Republican Tax Reform Bill will……

1. Increase taxes on the Middle Class. False. The standard deduction — used by around two-thirds of households — would be nearly doubled to $12,000 for individuals and $24,000 for married couples. The final package would also double the basic per-child tax credit for families making up to $400,000 a year from $1,000 to $2,000.
2. Take Health Insurance away from 15 million Americans. False. The repeal of the mandate could result in an estimated 15 million more people without insurance within 10 years, but not because health insurance will be “TAKEN” from them, but because they don’t need or want the insurance and choose to not have it.  The penalty they have paid for not having insurance will be money that goes directly back into their pockets under the GOP tax reform bill. That may potentially lead to federal savings of $338 billion over 10 years.
3. Will increase taxes on the poor. False. The poor do not pay any taxes at all currently. That should not change. In addition, the bill includes a $2000 direct tax credit for childcare of which $1400 is a direct credit to those who are poor. (That means an actual “refund” — which is a misnomer since they would not pay any taxes from which to receive a literal “refund”)
4. Will cut Medicare and Medicaid. False. There is NO mention of either Medicare or Medicaid funding changes in the bill. The same block grants from the federal government to states for Medicaid will remain in place. Medicare funding by payroll deductions that has been in place for decades will continue. The reason for this claim by Democrats is the same reason they always raise Medicare and Medicaid (and Social Security) cuts when Republicans promote tax cuts — to scare Americans into believing the Government is more capable of taking care of Americans than Americans themselves, and should therefore surrender hard-earned cash as taxes to the government to fund these and other programs.
5. Will explode the deficit. False. It should not shock me about the deficit cries from the Left, but it always does. Why? If Democrats were concerned about the ballooning federal deficit, they would not have allowed the previous President in his 8 years in office to double the debt from massive deficits — actually at his departure from the White House eclipsing the total debt amassed by every American president COMBINED since George Washington! Experts do say the deficit will naturally go up for a while, but that will be a temporary thing. The reason? If the U.S. economy continues its climb as it has since Obama’s departure, the natural increase in revenue to the government will more than take care of any deficit. And forecasts based on the financial sector performances in the last year are that government revenue will far surpass the cost of tax reductions.
6. Will make the rich get richer. False. Let’s be honest: the wealthiest Americans under this plan will receive a slight tax decrease — from 39% to 37%. But think about that for a moment. Who deserves tax cuts — just the middle class? Those wealthiest 30% of Americans pay more than 70% of ALL the taxes paid. Should they not get a break, too? And why are the wealthy better off than others? Most wealthy people build their own wealth by starting businesses and building their value over years. In doing so they EMPLOY PEOPLE WHO ENJOY THE FRUITS OF THOSE BUSINESSES AT THE SAME TIME THE WEALTHY DO.

Summary

There are several things that are really made apparent to me in all the hoopla about this tax reform push by President Trump and the GOP. First, why would any member of Congress oppose tax cuts? Think about this: whose money is it? Not theirs. In fact through the IRS, hard working Americans watch as a large portion of their income is actually confiscated by the government. Taxpayers do not voluntarily write checks to Uncle Sam. Taxes are deducted from paychecks or paid by employers and individuals because they are forced to by law. IT’S OUR MONEY…NOT THEIRS!

When Democrats and Republicans alike scream about increasing deficits, they do so to mask what is really going on. They deflect from the facts about deficits. Certainly you know that budget deficits are a product of the government spending more money than what it takes in. There are two ways to increase the bottom line of companies, your household, AND the federal government. The first is what we are watching right now in 2017: the increase of tax revenue, corporate profits, and the income for many companies and individuals. Increasing money coming in is the first way to improve the bottom line. The second is to cut spending.

Any time cutting federal spending is mentioned, Democrats immediately start scaring Americans by saying Republicans because they want spending cuts will cut Medicare and Medicaid, Social Security, Welfare, Disability, insurance for children (CHIPS), etc. They never talk about the one real thing that needs to happen immediately and will balance the budget more effectively and quicker than raising taxes, which is what all Democrats want and tell Americans needs to happen: cutting “GOVERNMENT” spending. How could they do that without cutting services for Americans? Let’s look.

I reported this November 28th this year: “An $85 million loan for a hotel complex in Kabul, a billion dollars in missing equipment for Iraqi forces and a $30,000 grant to stage ‘Doggie Hamlet’ are just a few examples of the ‘Federal Fumbles’ a Republican senator has flagged in a new report on wasteful government spending. The 86-page report from Sen. James Lankford identified $437.6 billion in ‘wasteful and inefficient’ federal spending. ‘We’ve got every variety — from very small to very, very large areas of waste and areas where the federal government just dropped the ball,’ the Oklahoma lawmaker and fiscal hawk reported today.”

$437.6 billion dollars of identified wasted spending by Congress in 2016. This tax reform plan is a 10 year plan. If Congress would follow through on this plan, and while doing so, simply stop the stupid spending every year that always total $400 billion or more, in that 10 year period, the United States bottom line would increase almost $5 trillion dollars!

One other note: I am sick and tired of hearing those on the Left complain about Wall Street banks and investment houses making all these major profits in the stock market this year. Yes, those Wall Street folks are making money, but they don’t own all that stock that is being bought and sold making billions of dollars in doing so. It’s the stock market! That means that stockholders are receiving those profits. Who are those stockholders? Insurance companies investing premiums, 401k’s, Simple IRA’s, Pension funds, Employee retirement funds, and mutual funds. Who owns those? AMERICANS LIKE YOU AND ME! Almost all those stock market profits flow through to you and me. And Democrats don’t like that. Why? Because it’s money they do not control!

It takes more than the three branches of the federal government to make America work and prosper. It takes American people who work hard, pay their fair share in taxes to take care of America’s needs and the needs of those who are unable to take care of themselves. And don’t forget: members of those three branches of government all work for us!