Critics are hitting President Trump hard on his tax reform plan. The two biggest complaints…
- It looks out for millionaires and corporations. And it does.
- It will add more than $ 1 trillion to our deficit. And it could.
But that misses the mark. Here’s the point: The vast majority of taxpayers — you included — will see more money back in their wallets, a simpler tax-filing process, and a jumpstart to the economy. Block out the negativity and focus on you for once. Because no one else is.
Doubling your deductions and busting your brackets
When you file your taxes, you fit into a certain bracket and get a certain deduction. Trump’s tax reform simplifies the brackets and increases what money the average family would take home.
When I saw the plan, my jaw dropped. Let’s say you’re — oh, I don’t know — a struggling writer and you make $40,000 a year. Right now, you pay 25 percent of your income to taxes. A quarter of your money! No one wonder that writer eats a lot of Ramen noodles.
Under Trump’s plan, you would pay 12 percent. I’ll let that sink in.
The tax brackets get slashed from seven groups to four. Every group benefits in some way, with the exception of those making $500,000 or more.
But Trump doesn’t stop with tax groupings.
His plan doubles your standard deduction. That’s for both single and married filers. It’s a big jump. Single filers would deduct $12,000, and married would deduct $24,000, from their income.
Add these changes up and see what the impact will have on average Americans. The best example Republicans point to is a family of four that earns $59,000. Under Trump’s plan, they would receive a roughly $1,100 tax cut. Tell me a family that wouldn’t love that!
Rocket fuel for the economy
On the campaign trail, Trump promised to make the economy soar. Lots of people scoffed, and experts lampooned his dream of 3-percent economic growth each quarter. But guess what? It’s happened: two straight quarters of GDP growth at 3 percent. How do we sustain this growth? The president believes it starts with changing the way we tax corporations.
I get it. Nobody feels bad for corporations’ gigantic tax bills. They’re big faceless companies headed by greedy bastards. However, unless you’re a hermit living off the land, those corporations are part of your life — whether you’re paid directly or indirectly. So the better they do, the better we do.
The United States has the highest corporate tax rate of the developed world. It’s just one factor why some U.S. businesses stay abroad with their profits. But let’s focus on it.
Trump’s plan drops the corporate tax rate from 35 percent down to 20 percent. It encourages business to keep their headquarters here or bring it here. It also encourages U.S. companies with foreign profits to bring that money home.
Last time this happened, it truly benefited shareholders of companies. (See Bush-administration circa 2004.) However, this plan offers a 12 percent one-time tax on corporate profits. A CEO could distribute that to shareholders.
But it also offers a lower 5-percent tax if you bring the profits back and invest in your own company. See the carrot? It brings money that’s being held abroad in to be taxed — but offers incentives if you invest in your company.
This corporate tax plan is geared at adding what President Trump calls, “rocket fuel” to the economy. It’s probably an unwise choice of words — considering his nickname for a certain South Asian dictator. But that’s Trump.
Think about yourself for once
The CBO has already said Trump’s tax plan would add $1.7 trillion to our national debt. The left screams, “It helps millionaires!”
And it’s true.
But consider this: your own wallet. When President Obama rolled out the Affordable Care Act, the CBO scored it as adding $800 billion to the national debt. It actually has cost double that, $1.9 trillion. What did you get?
Maybe you got a sense of satisfaction that the ACA would save millions of lives. It didn’t. Instead, if you’re like most of us, you got higher premiums, higher taxes, and a handful of anecdotal stories to make you feel better as you eat your Ramen noodles.
Yes, millionaires will benefit from this tax plan. But, considering the top 50 percent of incomes pay 97 percent of our taxes, it’s not like they don’t deserve it. They just might not need it.
As you hear the critics, remember this: Every new government program will somehow cost you money. Don’t you deserve one that lets you keep a little more of what you earned?
Be selfish, accept the money. After all, Barack Obama isn’t coming to dinner to eat Ramen noodles with you anytime soon. But,Donald Trump might pay your way to a new kitchen. Love that!
The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the opinions and/or policies of Debt.com.
Article last modified on December 22, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Why Trump’s Tax Plan Is Actually Good For Average Americans - AMP.
Article last modified on December 22, 2017. Published by Debt.com, LLC .