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Opinion: This tax cut isnt for the middle class, which only pays 2.5% now
http://www.marketwatch.com/story/most-americans-dont-want-or-need-a-tax-cut-2017-09-27Opinion: This tax cut isnt for the middle class, which only pays 2.5% now
Published: Sept 28, 2017 10:15 a.m. ET
Donald Trump and the Republican leaders in Washington have rolled out a plan for another big tax cut, but most Americans wonder why they are bothering with taxes when there are so many other more pressing problems. There may have been a time, a generation ago, when cutting tax rates was the most popular thing a politician could do. But that day is long gone. I guess you might say Americans are tired of tax cuts, there have been so many. Today, most Americans arent clamoring for lower taxes, probably because most of us dont pay very much in federal income taxes. Our tax burden has rarely been lower. The latest data show that the 60% of families in the middle of the income distribution those between about $32,000 and about $140,000 pay an average of just 2.5% of their income in federal income taxes.
Nearly half of Americans owe no federal income tax at all, but they do pay taxes: payroll taxes to fund Social Security and Medicare, tariffs, excise taxes, corporate taxes, property taxes, sales taxes, state and local income taxes, and so on. If they have a problem with taxes, its not with the federal income tax.
A bill that cuts federal income taxes for middle-class families makes absolutely no sense, except as a sad way of camouflaging the real intent of the bill: Giving millions of dollars to the very wealthy, who happen to be the only people who are really benefiting from our uneven economic growth.
(snip)
But in Washington, cutting taxes is the most important thing on the agenda. Why? Because the Republican Party apparently is a wholly owned subsidiary of large multinational corporations and the richest 0.1% of Americans. The people get it. In an NBC/ Wall Street Journal poll, 62% of those polled said taxes should go up on the wealthy, and 55% said taxes should rise for corporations. Meanwhile, 53% said their own taxes should stay where they are.
(snip)
The problem, they ((claim)) is that corporate taxes are too high in the U.S. Our companies cant compete with foreign-based firms. Its true that the statutory rate is very high 35% federal corporate tax rate (plus varying levels of state income taxes, plus individual income taxes paid by shareholders).
But nobody pays retail, and nobody pays the statutory rate. Corporations take advantage of lots of special provisions in the tax code to lower their taxes. The effective marginal tax rate on new investments is 19.7%, very much line with our major trading partners, according to a paper published by the Obama Treasury Department in January.
(snip)
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Opinion: This tax cut isnt for the middle class, which only pays 2.5% now (Original Post)
nitpicker
Sep 2017
OP
nitpicker
(7,153 posts)1. Note they said families
With the credits for EITC (for those under $50K AGI), child tax credit, dependent care credit, college cost credits, and itemization, families already make out. A family at a tax assistance place could get a refund of $5K or more.
For singles, it's very different. My own federal tax (as a percentage of AGI) is 12%, after itemization. Fir those that can't itemize, it's worse. Under from what I understand of the Dump plan so far, my taxes would rise.
Skittles
(153,193 posts)2. singles really get stiffed
yes indeed