The tax reform law of 2017 will undoubtedly go down in history as an phenomenal economic transformative feat, maybe surpasses that of Reagan’s. Not only did a supposed unqualified dufus, by the name of Donald Trump, rally a Party that was supposed to hate and despise his very sight to near unanimous concurrence, the Republican Party, in spite of just 25% of a national populace expressing favor, according to the Hill.com 11/15/17 report.
But there are some underlining factors of the Hill story that need to be looked at. One, is according to a March report by the National Review, Socialism’s Rising Popularity Threatens America’s Future, 4 out 10 Americans now believe it is okay for the government to take more of the money that we make. Couple with the startling fact that far too many of us subscribe to the notion that high income earners do not pay their “fair share” in taxes to the federal government. This simply is due to the naked miseducation of the American people when it comes to Capitalistic economics and how the federal income tax system works, amongst a lot of other things.
The United States income tax is a progressive tax system, whereby the more income one earns the more he is taxed. So, by this fact alone should squelch any talk of those earning more income aren’t paying more taxes than those who are earning less income. But the government educational system sees to it that it doesn’t by not making knowledge of the workings of the government required learning. How many times have you heard anyone challenge a talking head or propagandizing politician when he runs off at the mouth about the rich needing to pay more in taxes by referring to the Internal Revenue Services’ own statistics, just as Pew Research did in October? In Pew’s report it illustrates unequivocally, “of IRS data from 2015, the most recent available, shows that taxpayers with incomes of $200,000 or more paid well over half (58.8%) of federal income taxes, though they accounted for only 4.5% of all returns filed (6.8% of all taxable returns). By contrast, taxpayers with incomes below $30,000 filed nearly 44% of all returns but paid just 1.4% of all federal income tax – in fact, two-thirds of the nearly 66 million returns filed by people in that lowest income tier owed no tax at all”. There should not be any room for any argument or discussion about who pays what or pays the most. And yet whole political campaigns are built around this absurd and false issue.
Lets not overlook another reason why the issue of federal tax reduction gets such a lukewarm response from a majority in America is that at least 45% of us don’t pay ANY federal income tax, whether it’s due to deductions, exemptions, or that many of us simply aren’t required to do so. And most of those that do pay federal taxes have absolutely no idea how much they are paying.
A very good argument can be made that the U.S tax system is designed for the benefit of the one’s who produce goods or services or create jobs and wealth by way of deductions and write-offs. The fact that there is such an uproar over the fact that corporations are being highly favored in the tax law grossly ignores the undeniable principle that poor people don’t create jobs. Americans have been at a gross disadvantage globally due to U.S corporations being taxed 35%, the 3rd highest in the world, according to taxfoundation.org. This tax has been an albatross around the necks of the nation’s businesses, large and small, dis-incentivizing them to spend money on domestic expansion, employee hiring, and domestic research and development. Many have chosen to take their talents and money elsewhere, to the point that during the Obama reign while the stock market showed U.S corporations were making money hand over fist, corporate domestic output hit below zero for the first time in American history, so says Kevin Hassett, Chair, White House Council of Economic Advisers during a recent economic forum. Businesses though they were making money simply were not spending it here at home. They certainly have not been hiring. Now it’s less expensive for domestic businesses to do business and invest here in America, but also less expensive for international businesses to do business and invest here. I for one, want American businesses, and any other nation’s business, to have as many tax benefits and incentives possible so they can produce, earn money, and create as many jobs as possible here in America, rather than somewhere else. Maybe it’s just me.
Americans have been conditioned to have a Jekyll and Hyde relationship when it comes to the issue taxes. Though we love tax free days when buying school supplies for our children or other goods, when it comes to the government taxing us more, too many of us accept it without reservation. Maybe it is due to the false notion that government somehow creates wealth and by giving it more of what we earn it will somehow give us more freedom to create wealth for ourselves. When in truth the exact opposite has proven to be true throughout history. Larger government stifles individual freedom and liberty and a nation’s economic growth overall. Government does not create wealth. It can only redistribute wealth giving to it by one citizen and it chooses another citizen to give it to or dictates how to spend it. It [the government] sucks cash and economic resources from the nation’s economy leaving less for us to use for our benefit. No one know how to spend our money better and more effectively than a economically literate people.
By all truly learned economist accounts The Tax Cuts and Jobs Act will be a win-win for taxpayers and nation economically, domestically and internationally. And will be for a long time to come. The economic bear of America will be awakened and unleashed like it has not been in a very long time.