I watched three Sunday morning “news” shows and learned whatever bad is happening (even if what they report is not really happening) is Trump’s fault because he doesn’t like people of color. The only other news worth discussing Sunday morning was Trump’s battle with the NFL. Yep! The NFL quietly transitioned from protesting social injustice against people of color to fighting against President Trump over players’ rights to free speech. All Trump; all bad; all the time.
Douglas Boneparth, president of Bone Fide Wealth, wrote an excellent article for CNBC, “Most Americans have no idea what tax reform means to them,” concerning Trump’s tax reform framework released last week. Boneparth noted three points:
1. “About 66 percent of Americans cannot pass a basic financial literacy test — and have no real idea what tax reform actually means for them.”
2. “Anyone getting overly passionate about this subject is most likely just hearing what they want to hear.”
3. “We simply don’t have enough information to know how the proposed changes would impact an individual taxpayer.”
According to the IRS, the Federal income tax has 7 tax brackets: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and 39.6 percent. According to the Tax Foundation, an organization Bernie Sanders quoted on one of the Sunday talk shows, “In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent. The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).” Yet, Sanders complains “the rich” are not paying their fair share and ought to be taxed at higher rates.
Democrats and those on the socialist left defend America’s corporate tax rate, the highest among industrialized nations, and argue we should raise corporate tax rates even higher. America pursued these Keynesian economic principles under Obama and GDP averaged less than 2 percent for his 8 years in office.
Think about this: if you own a business, and the government taxes you 10 percent, are you going to lose 10 percent of your income? More than likely you’ll raise your prices to pay for the taxes. This is why raising taxes on corporations and businesses, particularly small businesses in America that employ more than 60 percent of the workforce, is a bad idea. Businesses don’t pay taxes. Customers of businesses pay businesses’ taxes.
Presidents Coolidge, Kennedy, and Reagan proved that lowering taxes put more money into the economy and fueled growth. When the economy grows we generate more jobs. Moreover, a growing economy generates more spending and more tax revenue than a sluggish economy.
Trump’s proposed framework recommends tax rates of 35 percent, 25 percent, 12 percent, and zero percent for those who pay no income tax. The framework recommends doubling the standard deduction to $12,000 for single taxpayers and $24,000 for married couples filing jointly. The plan calls for eliminating all deductions except mortgage interest and charitable deductions. Trump also calls for lowering the corporate tax rate from 39.4 percent to 20 percent.
Please note, Trump’s plan is a framework, a starting place. Congress will have to fill in all the gaps and write legislation that accomplishes goals recommended by the framework. Don’t let the hysteria from the left send you into a tizzy!
Daniel L. Gardner is a syndicated columnist who lives in Starkville, Miss. He can be reached at PJandMe2@hotmail.com.