The following is an editorial by Armstrong Williams.
It’s been said that the only certainties in life are death and taxes. We haven’t yet figured out a way to mitigate death, and paying taxes remains an unwelcome necessity. But Republicans in Congress are seeking to ease the overwhelming burden on tax-paying Americans with the Tax Cuts and Jobs Act. Passing this bill and signing it into law is of paramount importance.
The $1.5 trillion tax overhaul package passed the House of Representatives on November 16, and the Senate passed its version December 2. It is now time for the two versions to be reconciled so the bill can be sent to the desk of President Trump, signed into law and put to work for the benefit of the American people.
But don’t just take my word for it. The experts have crunched the numbers, and their analysis is encouraging. The Tax Policy Center released a brief on the Senate’s version of the bill that estimates that the legislation will reduce taxes, on average, for every single income group. This tax reduction holds up both in 2019 and further down the line in 2025. In fact, in 2019, households are expected to save an average of $1,200. An average after-tax income increase of 1.2 percent for all taxpayers is a welcome change and amounts to more than mere pocket change.
For businesses, this tax reform bill is a clear win. The bill will by 2019 permanently cut the corporate tax rate from its current exorbitant rate – up to 35 percent – to a much more reasonable 20 percent.
Admittedly, the Tax Cuts and Jobs Act will not change much for the lower class specifically. But by cutting the corporate tax, the bill will boost the economy, ultimately benefiting everyone. The Tax Foundation, an independent think tank that analyzes tax policy, projects over the next 10 years that these corporate tax cuts could lead to almost one million new jobs. Additionally, the independent nonprofit estimates that wages would increase 2.9 percent. In other words, if you oppose this bill, then you are opposing job growth and an expanding American economy.
The upper class will also reap some benefits: those with earnings in the top one percent of the population will see their taxes fall by around $30,000 a year. Though Democrats have used this number to deride the bill and claim that it only helps the rich, this is a shamefully misleading statement. The fact of the matter is that those in a higher tax bracket are presently paying far more taxes than anyone else, and this tax cut doesn’t change that one iota. Percentage-wise, this group of people is still paying by far the most. The difference is that the wealthier will now be required to pay a more reasonable proportion of their hard-earned wages.
In addition, its important to remember that tax cuts on the nation’s top earners do not preclude other tax cuts that will help the majority of Americans. The middle class stands to benefit greatly as well. Firstly, the proposed tax code will be much more streamlined, simplifying the current convoluted process for the millions of hard-working Americans who struggle with the tax code year in and year out. For example, the House version collapses the seven personal income tax brackets into only four. Secondly, in addition to simplicity, the code provides real savings.
Both the House and Senate versions of the Tax Cuts and Jobs Act raise the standard deduction for individuals, heads of households and married couples dramatically: $12,000, $18,000 and $24,000, respectively. The current law has these numbers set at $6,500, $9.550 and $13,000. In addition, the child tax credit will go up 65 percent. This means more money in everyone’s pockets.
There are a lot of complicated numbers involved in tax reform, but the bottom line is simple. When taxes go down for American corporations, the American economy reaps direct benefits. When taxes go down for the American people, our citizens reap direct benefits. This bill accomplishes both, and it boasts the additional benefit of simplifying the tax code.
When the Senate voted through the Tax Cut and Jobs Act, America moved one step closer to achieving a revamped tax system that actually makes sense and helps everyone. Now it is incumbent upon our legislators to reconcile the bills, and allow every hard-working American taxpayer to keep more of what they earn.