Some facts about tax reform
Published 8:53 am Tuesday, October 24, 2017
By Chuck Witt
Here are a few facts about the Tax Reform package wending its way through Congress now.
It proposes to cut the corporate tax rate (characterized by Republicans as the highest in the developed countries at 35 percent, even though virtually no corporation pays that percentage, some even paying 0 percent).
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It is estimated that this tax cut would cost the U.S. treasury 2.3 trillion dollars over 10 years.
It proposes to lower individual tax rates, although the current lowest rate of 10 percent would rise to 12 percent at the same time that some deductions would be eliminated. The current top individual tax rate only applies to couples filing jointly with income more than $470,000. This proposed tax cut would lower revenue by about $2 trillion over 10 years.
A proposed increase in the standard deduction would produce about $700 billion less over a 10-year period.
One of the “golden boys” of Republican tax policy has long been to eliminate the estate tax, which they like to call the “death tax,” at the same time they characterize it as a tax which hits every family when the head of the family dies, a gross misrepresentation since it only applies to couples with estates more than about $11 million.
In 2017, only about 11,000 individuals who die will be affected by this tax although it is projected to cost the treasury $246 billion over the 10-year period.
This Tax Reform Act also proposes to cut funding to Medicaid by $1.5 trillionand Medicare by $470 billion over 10 years.
If these cuts occur, millions of low-income Americans will lose access to health care and more elderly Americans will be declaring bankruptcy late in life because of mounting health bills.
Perhaps instead of calling this a Tax Reform Act, it could more accurately be titled “An Act to Inflict Fiscal Pain on the Most Vulnerable Americans and Provide Huge Largesse to Individuals and Corporations Who Least Need It.”
This Tax Reform Act will result in increasing the national debt, despite provisions in it for actually raising revenue.
And the reductions in incoming revenue will occur at exactly the same time this country is in dire need of additional income to not only deal with a failing national infrastructure, but ongoing national disasters from three hurricanes and huge wildfires across the western states.
If the Republicans — and/or Democrats — are really interested in doing relevant tax reform, they should start by closing all the tax loopholes which allow corporations and wealthy individuals (President Trump among them) to pay far less, percentage-wise, than the common individual working person.
Our tax codes and laws should be changed to prevent corporations from hiding assets in offshore bank accounts or to make it profitable to ship jobs to overseas locations which pay slave-labor wages.
And as for the ongoing debate over the adequacy and appropriateness of Medicaid and Medicare, this will only be resolved when this nation implements single-payer health care for everyone, with insurance companies out of the picture.
Surely, this can be accomplished through some form of program similar to Social Security, where employees and employers each pay into ongoing accounts to fund that health care. After all, employers who provide private health care coverage are already laying out huge sums to provide that benefit.
If there were sufficient wise heads in Congress, solutions could be found that were equitable and rational.
But maybe that is expecting too much.
Chuck Witt is a retired architect and a lifelong resident of Winchester. He can be reached at email@example.com.