Evans News Report: evansnewsreport.com
By: Brian Evans
On Wednesday December 20, 2017, the Republican’s with the assistance of President Trump, passed one of the largest tax cuts in modern American history. President Trump is expected to sign the bill before Christmas, which passes the new tax code into law. The tax legislation ended up passing without a single Democrat vote, and throughout the legislative process, we have heard the Democrats claim that this bill will inflate our national debt, strip away health insurance from American’s, and ultimately kill American’s in the end. So what is the truth behind the all the left-wing hype? How will this tax cut bill affect the hard-working Middle Class of America?
First, the tax bill affects American’s personal income taxes by reducing tax rates across the board.
- Current brackets: 10, 15, 25, 28, 33, 35, and 39.6 percent.)
- New tax brackets: 10, 12, 22, 24, 32, 35, and 37 percent.)
- 10% (income up to $9,525 for individuals; up to $19,050 for married couples filing jointly)
- 12% (over $9,525 to $38,700; over $19,050 to $77,400 for couples)
- 22% (over $38,700 to $70,000; over $77,400 to $140,000 for couples)
- 24% (over $70,000 to $160,000; over $140,000 to $320,000 for couples)
- 32% (over $160,000 to $200,000; over $320,000 to $400,000 for couples)
- 35% (over $200,000 to $500,000; over $400,000 to $1 million for couples
- 37% (over $500,000; over $1 million for couples.
In addition, it doubles the standard deduction level from the current $6,350 deduction to $12,000 for individuals, and from the current deduction of $12,700 for couples to $24,000 in the new tax plan. As a result, it lowers not only the percentage paid by most Americans, but it also doubles the deductions for Americans, thus making it one of the largest American tax cut for the Middle Class. The highest rate of 37 percent applies to individuals whose income exceeds $500,000. For joint filers, the threshold is $600,000. This rate is being lowered from 39.6% to 37%.
For families with children under the age of 17, it increases the child tax credit from $1,000 to 2,000 for each qualifying child. It applies to both single and married filers, and is fully refundable up to $1,400.
Under the new tax plan, American’s will no longer be forced by government to pay fines for not buying into Obamacare under penalty of the individual mandate. It will phase out the mandate officially at the end of 2018. In addition, if you have expensive medical bills, the new tax plan allows taxpayers to deduct medical expenses that exceed 7.5% of their adjusted gross income. This bill also allows families to deduct for medical expenses not covered by insurance for 2018 and 2019, when expenses exceed 7.5% of adjusted gross income. That amount rises to 10% starting in 2020.
Under the tax bill, parents will be able to use up to $10,000 per year, tax-free from 529 college savings accounts for K-12 tuition. According to the laws on the books right now, those funds can only be used for college plans, so this change will certainly help Americans who want to utilize the money in k-12. Also, to the disappointment of conservative republicans, in the days leading up to the passage of the tax bill, Progressive-Republican leadership cut out a provision introduced by Senator Ted Cruz that allowed the money to be utilized on Home Schooling.
For families and individuals with student loans, the new tax bill keeps the current deductions for student loan interest. Also, the tuition waivers that are received by graduate students will remain tax-free. Both are big wins for families with college students, or adults with student loans with outstanding balances. Also, employer tuition assistance remains non-taxable. Therefore, your employer can contribute up to $5,250 per year to your tuition for qualifying education programs, and you won’t pay taxes on that money. This helps to expand skill sets, and can bump someone up to a higher paying job, and it helps lower-income Americans get higher paying jobs.
The tax plan preserve the child adoption tax credit. The maximum adoption tax credit will stay at $13,570.
For new homebuyers, the mortgage-interest rate deduction will be available for mortgages up to $750,000. That is down from the former tax code’s $1 million limit.
The Work opportunity tax credit stays, which directly affects young people. It helps to incentivize employers to hire certain groups like young people who need to work during the summer and young veterans, fresh out of the military.
The charity deduction will remain as it is. So, if you itemize your deductions, you may be able to deduct charitable contributions that are made to qualifying organizations.
The deduction for moving expenses has been eliminated, but there are exceptions for members of the military.
The republican tax bill maintains the teacher deduction at its current amount of $250.
The new tax plan also eliminates the tax preparation deduction. It had allowed filers to deduct the cost of having your taxes prepared by either a professional, or through software.
Meanwhile, progressive-socialist states like California and New York will take some hits in deductions. For example, the new bill cuts the ‘so called bike commuting benefit’, which allowed you to knock off up to $20 from income per month for the costs of bicycle commuting to work. Also, under the new tax legislation, families can only deduct up to the total of $10,000 in local property, state, and local income taxes. Progressive-Socialist states with extremely high taxes were fighting against this provision, because in the past, they were able to raise taxes to extremely high levels and residents could write those taxes off of their federal income taxes. This means that they were using the tax code in such a way that states with low taxes, paid a much higher amount into federal taxes, while high tax states paid substantially lower taxes into the federal government. It was a great deal for the progressive-socialist states, so they could raise taxes, while leaving the majority of other states citizens to pay for the running of the federal government.
Although Democrats use the term ‘corporations’ as a word for the rich, corporations cannot actually pay taxes. Yes, our federal government can tax corporations, but they don’t actually pay those taxes themselves. They pass ALL CORPORATE TAXES down to the CONSUMER of their goods and services. As a result, with the new corporate tax rate being lowered from 35% to 21% it will do several things. First, being we have had one of the highest corporate tax rates in the world, it will allow our nation to become economically competitive in the global markets. Secondly, it means that corporations will be passing a substantially smaller tax down to the consumer. This will result in lower cost of items that Americans have to pay for products at the store. Third, it will allow corporations and businesses to hire more workers, and to pay those workers more. In addition, it will cause a major boost to our economy, resulting in higher wages, and American’s with higher savings and spending money.
The bill also changes how U.S. multinationals are taxes to help American Companies who operate in the United States. Currently, companies are taxes on all profits, but they are allowed to defer paying United States taxes on profits earned in foreign countries until they bring the money home. It puts American companies at a huge disadvantage, and some say it incentivized businesses to move their operations overseas, where they can operate virtually tax-free. The Senate bill would prevent corporations with foreign profits from manipulating the system, so they can prevent paying tax. Also, it would require companies to pay a one-time tax rate on overseas profits of 14.5% on cash assets and 7.5% on non-cash assets
Where the wealthy corporate leaders get hit on taxes is not in corporate taxes, but on individual income taxes. The Alternative Minimum Tax (AMT) is essentially a secondary tax on the wealthy. It was put into place to offset benefits a person with high income could receive. The new bill ended (AMT) on corporations (tax on consumers), but raised the exemption level on the wealthier Americans personal income taxes. It raised their exemption from $500.000 for single taxpayers and $1 million for couples. Also, it keeps the estate tax at the current 40%, but doubles the exemption levels from $10.98 million for individuals and $21.96 million for couples.
Democrats also try to claim that the rich benefit from pass-through provisions, but pass-through businesses are typically sole proprietorship, joint ventures, limited liability companies, and S corporations. They are not taxed as corporations, but instead profits from these businesses are counted in the owners’ personal tax returns. As a result, the Republican tax bill gives businesses a 20% deduction for the first $315,000 of joint income. Wealthier pass-through companies are limited to that $315,000 amount, and the remaining income is taxed at the current rate.
In addition, the tax bill makes changes that allow for the exploration, development, and production of oil in Alaska. Thus, giving America access to the Arctic’s rich oil reserves. President Trump already has it in the works to begin allowing the tapping of Alaska’s vast energy resources. This will cut energy costs throughout America, boost our economy, and move our country towards energy independence.
Progressive Democrats like Chuck Schumer and Nancy Pelosi claim that the bill “raises middle-class taxes.” However, even with the state and local-tax deductions reduced to $10,000, most middle-class households up to six figure income earners, especially families with children will see a significant reduction in taxes by 2018. In fact, if you want to see how you would fare, plug your numbers into journalist Maxim Lott’s online program at http://www.taxplancalculator.com.
Meanwhile, despite the evidence, if you pay attention to the mainstream media, you’d think that the vast majority of Americans hate the tax bill and the policies it contains. However, it is no surprise since they are inundated with constant misinformation, distortions, and scare tactics from the Progressive-Socialist Democrats and the mainstream media. Just a few examples of mainstream media’s headlines include:
“Tax Cuts Benefit the Ultra Rich, but Not the Merely Rich”
New York Times
‘How the Grinch Stole Middle Class Tax Cuts,’ Democrat’s Xmas story warms few hearts on House floor’
Despite the grim and horrendous headlines, the editorial board at Investor’s Business Daily found out something quite different when they polled the actual policies included within the tax reform bill: Americans largely support them.
As IBD’s editorial notes, FiveThirtyEight reports that an aggregate of polling shows that the tax plan is “historically unpopular.” That is mostly because of the wording of the question, and the job that the mainstream media has done to drive down both Donald Trump and Republican legislators’ approval numbers. This polling is reflective of that.
When you look at the actual policies, there is broad support.
Most of the surveys, however, only ask people broad questions about the tax cuts: Do they support the plan overall? Do they think they’ll get a tax cut? Will they boost economic growth? Here’s what IBD says:
What’s more, when people are asked about key provisions in the tax bill, support rises across the board.
The IBD/TIPP poll is one of the few that has bothered to ask such questions. The results from the November survey:
- 57% support lowering corporate rate from 35% to 20%.
- 55% support reducing the number of tax brackets.
- 83% support cutting the pass-through tax rate for small businesses to 25%.
- 66% support doubling the standard deduction.
Other polls produced similar findings. CNN found that 55% support increasing the standard deduction, 79% back the boost in the child tax credit, and a plurality support the mortgage deduction limit.
What does this mean for the Republicans who are being told of doom and gloom by Democrats and the mainstream media. What does this mean considering Republicans are being told that this will be their own ‘Obamacare’, and it will sink them in upcoming elections. In truth, it means that the Republican Party is right to ignore the Progressive-Socialist Democrats and mainstream media. Come election time, it will likely be the Democrats, and not the Republicans who will rue the day that these tax cuts passed, and the Democrats know it. That is why the GOP is right to ignore the media narrative on polling and instead they focused on delivering a tax cut for the vast majority of actual taxpayers. Come election time, the liberal media ruse will be shattered. And they know it. Actually, Democrats have fought hard to defeat this tax cut legislation, because they know it will boost our economy in ways that have not been seen since the Reagan Administration. Democrats fear the effects of American’s witnessing not only a growing economy, but a return to a growing middle class in America. Democrats realize that President’s are typically forgiven for any failures or mis-steps that they make when America sees a growing and booming economy. For example, Ronald Reagan won in a landslide, despite the Iran-Contra Affair. Bill Clinton won re-election, despite sex scandals and impeachment. George H.W. Bush lost re-election despite no scandals or problems, however, he raised taxes after promising ‘NO NEW TAXES’. Democrats know that this tax cut legislation spells doom for their party’s re-election chances.
Therefore, beginning in Feb. 2018, millions of Americans will see a higher take-home paycheck. That is because withholding will be adjusted to reflect the new tax cut they are getting. When this happens, Americans will become angry for being lied to by Nancy Pelosi and Chuck Schumer. They will be angry that Democrats united against legislation designed to benefit all American’s, including the Middle Class. American’s will be furious for the Mainstream Media reporting not truth and honest news about the tax cuts, but instead Progressive-Socialist propaganda. When that happens, those people, who have been lied to by the media and betrayed by Democrats, will start to see the tangible effects of this tax legislation. Then, America will begin to see an ideological shift that will not only bring our nation ever closer to economic prosperity, but her people will begin to see prosperity on all ends of the economic and political spectrum.
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