Taxes affect everyone, or let’s say they should affect everyone. It’s the price we pay for living in the best country on the planet. Having said that, the kerfuffle enters when it comes to how much is to be paid and by whom.
A lot of people, mostly liberals, think the rich should be taxed to the hilt—whatever level that is. Conservatives think money belongs to the earners and the federal government should be smaller with money spent responsibly. The left seems to say the government should have all they want and therefore the government will tell you what you can keep—of your money.
Now with the release of the first tax reform proposal from the House of Representatives, it seems the left’s real view of their money and taxes is emerging.
I’ve asked for years, what tier is considered “rich”? That adjective means wholly different things to people depending on where they live and how they live. Either way, I haven’t seen a written definition where “rich” starts on the dollar scale, as determined by the politicians, who talk a lot about it, and the IRS.
Presently, with the disclosure of the House’s tax reform bill and the stir created therefrom, the solid numbers from the IRS and the House Ways and Means Committee, the (first) tax proposal states incomes and percentages and comparison to the present tax rates are as follows:
$480,051 and up is taxed at the same 39.6% (no reduction); of that category, $237,951 to $480,050 is taxed at 35% (the earners at $424,951–$480,050 stays the same while the rate for earners of the $237,951-$424,951 increases 2%; $77,401-$237,950 would be taxed at 25%; incomes of $156,151 to $237,950 have a 3% decreased tax rate with the $77,401-156,150 remains the same; $19,051 -$77,400 drops from 15% to 12%; $0 to $18,050 rises from 10% to 12%. (Caveat: this is perplexing…does this income group actually pay taxes? Are not they earned-income-credit group?).
The deductions have changed with regard to increasing the automatic deduction(s) for people in the household, an increase in child tax credits and (thankfully) abolishing the Alternative Minimum Tax.
Undoubtedly there are provisions most of us, including me, will never wade through, that will affect each earner differently, but I sure like the ease of filing the proverbial postcard form each year.
Thus, it appears those with an Adjusted Gross Income(s) of $237,951 to $480,050 will see a tax increase. Therein is the question. Does that group of taxpayers consider themselves “middle income”?
Again, that depends. It’s safe to say if every person in the United States, of working age, were polled; the majority would say that income range puts you in the “rich” column. Thus the aforementioned numbers will mean very different things to different people especially in different regions.
One large opposition to the new proposal is the elimination of the ability to deduct state and local taxes (SALT) from the federal taxes. The primary complainers are mostly the high-taxed states like California, New York, and New Jersey—all “blue” states.
It’s revealing that those who pay the most in SALT are willing to tolerate the insanity of being over-taxed in their own backyard and are only disturbed by not being able to deduct it on the federal tax forms; i.e. demanding a federal subsidy.
The coastal states are reputed for having higher income earners. Being blue states, those earners are likely the ones constantly howling to “tax the rich because we have to pay for those less fortunate”. Now when it looks like that mantra could be the reality, they’re not happy at all.
The lesson learned from the mantra of “tax the rich” is: be careful what you ask for, you might get it.
Reality is, some will pay more because every single earner/filer cannot be satisfied.
The present protests also tell that the definition of “rich” means only those who earn more than you do. “Rich” is what the IRS and the politicians say it is.
This may be much ado about nothing. The Senate is putting out their own tax reform bill, then all go to reconciliation, then that product is voted on by the Congressional body.
In the meantime, those who voice their pros and cons are on full display.