The GOP Proposed Tax Plan is a Big Improvement

The GOP plan is also supposed to encourage businesses to bring home earnings by ending the unusual practice of double taxing U.S. businesses on overseas earnings, on top of the taxes imposed by other nations. So this will make us more competitive with other countries.

The GOP Proposed Tax Plan is a Big Improvement
By J. Allen Tharp

By J. Allen Tharp

The GOP proposed tax plan is a big improvement over what we have now. So I support it, but it could have been much better if we had conservatives developing it. Instead, we had the Big Six: Stephen Mnuchin, Gary Cohn, Mitch McConnell, Paul Ryan, Kevin Brady, and Orrin Hatch. Not a conservative in the mix. So rather than getting one flat rate, we get three: Sort of. Actually four.

It is unfortunate that the White House and Congress have bought into using the language and approach of the left. We keep hearing them all repeating that this is a tax cut for the middle class. How about a tax cut for Americans. All Americans! Stop singling out one group over another.

Yes, the middle class needs a tax break, but so does everyone else who is paying income taxes. We want fair and equal treatment under the law for all. This would ideally be a one tier flat tax or fair tax, with the same tax rate for all.

But Washington loves to lump folks into factions and classify them as either middle class or wealthy (God forbid), although this is an old Socialist tool to create division and class envy.

You never heard Reagan singling out the middle class. This was started by Marx and has been continued by Democrats so long that now Republicans are buying into it too. Reagan believed, as we do, that a rising tide lifts all boats, not just the boats in the middle.

Additionally, it makes no sense to single out the middle class for special tax treatment, since they are already paying a smaller percentage of their income, than the higher earners.

CBO data for 2013, Showed the highest-earning fifth of households paid 15.5% of their income in taxes, on average.

The bottom two quintiles not only paid nothing, on average, but they received federal money through programs like the EITC and child credit.

And the middle-income group, that Congress and the White House keep telling us need the biggest tax break, paid just 2.6% of their income, on average.

Another way to look at this is: According to the CBO, the households in the top 20 percent of income paid approximately 90% of net income tax revenues. And the top 1% pays almost 40% of all income taxes. Thank God for that 1%.

Dividing Americans into classes is wrong. Instead, Republicans should focus their talking points on how a simple flat tax system will benefit every American, improve the economy, and leave more dollars in our pockets.

GOP leaders should leave the class struggle to the Democrats and Socialists, and focus on how tax reform would promote prosperity. Stop talking like liberals.

So quickly, here is what I don’t like and do like about the GOP tax plan. I don’t like the increased child credits. Their plan is to increase the child tax credit considerably over the current $1000 per child amount allowed. I see this as a negative since it is a giveaway and encourages people to have children they can’t afford.

The GOP plans to nearly double the standard deduction, to $24,000 for couples. That would place many more taxpayers in the zero tax bracket, as they wouldn’t have any tax liability on income up to that amount. I see this as a negative too because it creates more zero liability voters who don’t contribute anything toward the cost of government. This group that contributes nothing is also the group that received the most in government aid. It’s only fair that we broaden the tax base, so everyone has some skin in the game. Otherwise, zero liability voters have no reason not to constantly vote for more government goodies.

Now the good.

Individuals: the brackets are proposed at 12 percent, 25 percent, and 35 percent. Not as good as one tier but better than the current seven tiers. No word yet on income levels for each bracket.

Corporate tax rates are to drop from 35% to 20%.

Rates for pass-through businesses, such as S-Corporations and partnerships are to drop from 39.6% to 25%.

A big improvement is that the plan will also allow businesses to immediately fully expense the cost of new investments in equipment and machinery, rather than depreciating it over many years.

Most itemized deductions will be eliminated, including the state and local tax deduction. Currently, states with no income tax are essentially subsidizing states with high-income taxes because they can deduct their SALT. So Texas will no longer be forced to fund states like New York and California.

Most deductions will go, but they are planning to keep the mortgage deduction and the charitable giving deduction.

The GOP plan is also supposed to encourage businesses to bring home earnings by ending the unusual practice of double taxing U.S. businesses on overseas earnings, on top of the taxes imposed by other nations. So this will make us more competitive with other countries.

The framework also calls for a new $500 credit for non-child dependents, such as an elderly relative.

The plan outline proposes eliminating the estate tax.

It also proposes the elimination of the alternative minimum tax.

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2 Responses to "The GOP Proposed Tax Plan is a Big Improvement"

  1. Don Stephens  November 1, 2017 at 12:34 pm

    I am against this tax plan–because it keeps in place the tools that allow half of all Americans to wind up paying no income tax at all.They have income taxes taken out of their check –but at the end of the year they get it all back –and some get more back than they paid in ( like a free gift from those of us that actually pay taxes). We cannot “Make America Great Again” when half the people don’t pay income taxes.Every American should pay income taxes so they feel part of this country and so they have “skin in the game”. A few years ago Trump talked about a tax plan –that was a flat tax with four brackets –1% –5%–10%–15% –depending on your income.I liked this plan and could support this plan.We need a true flat tax ( no deductions and no exemptions –for any reason)–but with the flat tax rate being no greater than 10%.Every American would pay –no one would get out without paying.The proposed tax rates under the Trump plan are too high and word now comes they are adding another rate for top incomes and that rate would be 39.6%.I say the lowest rate of 12% is too high.

  2. Dave R  November 1, 2017 at 9:48 am

    Living as a voter/taxpayer in “Realville”, I lament that Trump is not really a true conservative (like Reagan). I fully expect the net effect to those pulling the wagon to be almost zero (and even perhaps a tax increase). The day that over 50% of the voters no longer had a federal tax liability might have been the day we reached a critical tipping point with this federal tax system..
    The increasing “welfare giveways” continue. I’m not impressed. I’ve tried calling Cornyn on this, but regretfully his voicemail system is always “full”. I’m guessing he doesn’t really give a damn.

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