That’s right: Congressional Democrats have quietly released their tax increase plan they intend to implement “IF” American voters give them majority control in Congress in November.
Think about that: Americans just months ago received the largest tax cuts in recent history that — in spite of the untrue rhetoric from the Left — have reduced income taxes for 90+ percent of Americans. Never before in U.S. history have we seen such dramatic, immediate, and positive results from federal tax cuts.
Trump Tax Cuts
Until these recent tax cuts, the U.S. had the highest corporate income tax rates on Earth among all developed countries. Why is that important? International trade has for many years been almost totally based on tax consequences corporations must deal with when locating operations in various countries. What advantage was there for corporations to relocate headquarters or even place portions of their operations in the U.S. when profits tax implications were so ghastly? That was the primary reason for international companies departure from the U.S. during the decades leading up to the Trump election taking with them their dollars and their jobs AND the taxes they paid to federal, state, and local authorities.
The Trump tax cuts initiated an instant change in that thinking. Immediately when signed into law, international companies began announcing relocation to the U.S., massive expansion in their existing U.S. operations, AND the re-patriation of hundreds of billions of dollars in corporate cash from operational offshore profits that for years had been held overseas to keep from paying unfair corporate taxes in the U.S. This has already meant several hundred billion dollars in added domestic product in the U.S., including new tax revenue for the federal government.
In spite of claims from the Left, every middle class American and almost all financial classes others are seeing their net income increase under these tax cuts. Results of these cuts have positively impacted every part of the financial structure of the nation: for individuals, small business owners and employees, large corporations and their employees, AND stockholders, most of who are those whose retirement savings are invested in 401K and IRA retirement funds on the Stock Exchange. All those amazing increases in stock prices/values in the markets are owned primarily by Americans who are watching their net worth increase dramatically.
In the face of all these successes, Democrats plan to raise taxes……again.
Democrat Tax Increase Plan
- Increase the top marginal income tax rate from 37 percent to 39.6 percent. This nearly 3 percentage point increase in the top personal rate is not only a hike in the top bracket levy, but it’s also a direct tax increase on small and mid-sized businesses. The 30 million companies which are organized as sole proprietorships, partnerships, Subchapter-S corporations, and LLC’s pay their business taxes on their owners’ 1040 personal tax returns. Hiking the top tax rate is a small business tax increase. Thanks to the new IRS withholding tables, in February of this year over 90 percent of workers saw higher take home pay in the form of fatter direct deposits. They will continue to see those bigger paydays for as long as the tax rates in law remain in effect. This higher take-home pay is a down payment on a lower tax liability. Typical families of four should see their federal income tax decline from $2000 to $4000, depending on their income level and number of children.
- Increase the corporate income tax rate from 21 percent to 25 percent. Up until this year, the United States labored under the highest corporate income tax rate in the developed world. As a result, jobs and capital were fleeing America for more normal tax rates that could be found in tax havens like France and China. Finally, after many years of bipartisan consensus that the U.S. corporate rate had become a roadblock to attracting new jobs and investment, Congress cut the rate all the way from 35 to 21 percent. Even doing that only puts us in the middle of the pack of developed nations, but that’s a heck of a lot better than dead last.
- Bring back the alternative minimum tax (AMT) for 4 million families. Up until this year, 4 million upper middle class families had to calculate their income taxes two different ways, and then pay the higher result. This was due to a provision of the law known as the “alternative minimum tax” or AMT. Millions more had to at least pay a tax preparer to run the calculation, even if they didn’t end up paying the AMT. The new tax law all but repealed the AMT for 99 percent of these families thanks to a higher AMT “standard deduction.” Congressional Democrats would bring back the dreaded AMT, which especially hit hard two-income white collar families with kids in New York, New Jersey, and California.
- Cut the “death tax” standard deduction in half. Over the past few decades, no tax has proven more unpopular in every single poll than the death tax, the federal tax on estates. 60 to 70 percent of poll respondents consistently call for its full repeal. The new tax law didn’t repeal the death tax, but it did the next best thing–it doubled the death tax’s “standard deduction” from $5.5 million to $11 million (and twice that for surviving spouses). As a result, far fewer family businesses and farms will be subject to the death tax, and many smaller firms can shed the costly insurance, legal, and actuarial costs of avoiding the death tax. Like the top personal rate, the death tax is not something that really affects the rich, who have plenty of resources to avoid the levy. Rather, it hits hardest those companies profitable enough to worry about it but not profitable enough to not worry about, if you catch my meaning. Democrats have never understood this, which is why it’s not surprising they want to reduce the death tax’s standard deduction back down to what it was before.
Democrats have never seen a tax they didn’t like or a proposed tax they wouldn’t support. Why? Those on the Left know for certain they can better take care of Americans and all they need than Americans can for themselves. How to do that? “Confiscate” Americans’ money through taxes and spend it “for” those Americans. That process is called “Socialism” — a term Democrats run from because of its negative connotation but in reality is exactly what they want to implement in America.
Remember what I have stated for more than a year: Leftist no longer are driven by their lust for money. Their plan is to accumulate POWER with which they control every aspect of the lives of Americans, including money.
Watch the run-up to the November 2018 mid-terms. Democrats will shortly begin a concerted call to their base for the need for tax increases. To do so they will re-institute their cries of class warfare against the American middle class trying to disguise their attacks as attacks on the American wealthy.
Don’t be fooled. Doing so by the Dems is the same song, second verse.