One of the hot political topics right now is tax reform. And, spoiler alert, there are people on both sides that are for and against the new bill. The biggest issues I've heard from it so far are:
1. Tax cuts for low to middle income families.
2. Tax cuts for the wealthy.
3. Tax cuts for corporations.
so let's look at those.
I believe that all politicians want to at least say they will, and hopefully do, make tax cuts for what I consider normal working class people like my family, my friends, and myself who work a regular job with enough money to live off of but not so much that we have no financial stresses in our life. We all want a break on taxes which means more money in our pocket. Money that we can use to be charitable, give to our loved ones, save, pay off debt, or even sparingly treat ourselves. This is also money that we still spend in stores, restaurants, and other businesses which guess what...makes more people money. So you will be hard pressed to find anyone who doesn't want to in some way cut taxes for low to middle income families.
As for tax cuts for the wealthy. I see a lot of tax returns. I see people who make hundreds of dollars per month and some who make more in a month that I do in a year. Look, the wealthy either know how to take advantage of the numerous tax breaks that are out there, or they pay someone (typically an accountant) to advise them on the various tax deductions they can legally take advantage of. Honestly, I believe that if you want to take away some of these tax breaks for the wealthy then we need to simplify the tax code. Period. But if that doesn't happen, which is very unlikely to given the amount of discord in government right now; then why wouldn't a flat tax work. Let me do the math:
If you make $30,000 per year and your tax rate is 20% then you would pay $6,000 in taxes.
If you make $300,000 per year and your tax rate is 20% then you would pay $60,000 in taxes.
You see, the beauty of percentages is that everyone pays their share. Our tax code right now actually penalizes those who earn more. The married filing jointly rate for a couple earning less than $37,950 is 25%. However, for a couple earning more than $235,350 that rate is 39.6%. That means that for every $1,000 a "wealthy" person earns, they pay $146 more dollars in taxes than those in lower tax brackets. Fair? It doesn't seem so to me.
Then there are many people complaining about the corporate tax cuts that are being proposed in the new tax reform bill. I will admit, I am not very knowledgeable on corporate tax rates. However, I will make this point; Do you know who hires middle income workers? Corporations. If you place a burden of taxes on companies so great that they cannot expand or hire more work-force then there will be more people without jobs and in need of government assistance. So I feel that corporations should be treated fairly in the new tax reform bill and pay their share, but we must be mindful that these are the BUSINESSES that hire PEOPLE before we tax them to death.
1. Tax cuts for low to middle income families.
2. Tax cuts for the wealthy.
3. Tax cuts for corporations.
so let's look at those.
I believe that all politicians want to at least say they will, and hopefully do, make tax cuts for what I consider normal working class people like my family, my friends, and myself who work a regular job with enough money to live off of but not so much that we have no financial stresses in our life. We all want a break on taxes which means more money in our pocket. Money that we can use to be charitable, give to our loved ones, save, pay off debt, or even sparingly treat ourselves. This is also money that we still spend in stores, restaurants, and other businesses which guess what...makes more people money. So you will be hard pressed to find anyone who doesn't want to in some way cut taxes for low to middle income families.
As for tax cuts for the wealthy. I see a lot of tax returns. I see people who make hundreds of dollars per month and some who make more in a month that I do in a year. Look, the wealthy either know how to take advantage of the numerous tax breaks that are out there, or they pay someone (typically an accountant) to advise them on the various tax deductions they can legally take advantage of. Honestly, I believe that if you want to take away some of these tax breaks for the wealthy then we need to simplify the tax code. Period. But if that doesn't happen, which is very unlikely to given the amount of discord in government right now; then why wouldn't a flat tax work. Let me do the math:
If you make $30,000 per year and your tax rate is 20% then you would pay $6,000 in taxes.
If you make $300,000 per year and your tax rate is 20% then you would pay $60,000 in taxes.
You see, the beauty of percentages is that everyone pays their share. Our tax code right now actually penalizes those who earn more. The married filing jointly rate for a couple earning less than $37,950 is 25%. However, for a couple earning more than $235,350 that rate is 39.6%. That means that for every $1,000 a "wealthy" person earns, they pay $146 more dollars in taxes than those in lower tax brackets. Fair? It doesn't seem so to me.
Then there are many people complaining about the corporate tax cuts that are being proposed in the new tax reform bill. I will admit, I am not very knowledgeable on corporate tax rates. However, I will make this point; Do you know who hires middle income workers? Corporations. If you place a burden of taxes on companies so great that they cannot expand or hire more work-force then there will be more people without jobs and in need of government assistance. So I feel that corporations should be treated fairly in the new tax reform bill and pay their share, but we must be mindful that these are the BUSINESSES that hire PEOPLE before we tax them to death.
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