Republicans have put more money in the pockets of all taxpayers just in time for Christmas – but hardly anyone realizes it.
Republicans have just passed the largest tax cut in the last 31 years, since the Reagan Tax Cuts of 1986, but Democrats and the media have conspired to confuse the public about what just happened. I can’t think of anyone who would object to having more money in their paycheck if they really understood.
But the Democratic Party of obstruction and misinformation, with much help from their co-conspirators in the mainstream media, have successfully distorted the truth. They are the Grinch that stole Christmas.
According to a CNN poll, 55% of Americans oppose the GOP tax reform plan and only 33% favor it. Other polls show only 17% of Americans think they will get a tax cut in the new bill when the actual number is 80%. The truth will come in the form of more take-home money in their February paychecks.
My hometown newspaper, The Orlando Sentinel, led with a headline that said TRUMP TRIUMPHS ON TAXES – CORPORATIONS, WEALTHY BENEFIT MOST. Yes, corporations got the largest tax cut of anyone, from a world-leading 35% down to a below average 21%. But anyone who has studied Economics 101 will understand that when U.S. corporations have to pay more taxes than anyone else in their competitive world, the real losers are the Americans who work for these companies. A large tax cut for corporations that makes them more competitive in the world will result in more American jobs at better wages – and that’s good for all Americans.
The Democrats are trying to spin this GOP victory by claiming corporations would pocket their tax cuts rather than invest in their workers. The media happily is promoting this myth. Here’s the actual response from the corporate world within hours of passage of the bill:
- AT&T will increase its U.S. investments next year by $1 Billion plus pay $1000 bonuses to 200,000 employees
- Comcast pledged $1000 bonuses to 100,000 employees and will invest $50 Billion over the next five years
- Wells Fargo and Fifth Third Bancorp pledged to increase theier minimum wage to $15 per hour; Fifth Third will pay $1000 bonuses to 3000 workers
- Nexus Services is giving a 5% pay raise to its employees and hiring 200 more
Who pays the current taxes?
The top income tax rate of 39.5% was lowered to 37%. The top 1 percent of taxpayers are currently paying 40% of all income taxes. The top half of taxpayers pay 97.3% of all taxes. The bottom half pays 2.7% of all taxes. The below graphic shows these numbers in a dramatic fashion.
Therefore, it’s pretty difficult to give a tax cut to those who aren’t paying taxes. Yet, even though the bottom half pays almost no taxes at all, 80% of Americans will see more money in their paychecks this February. Even the liberal Tax Policy Center had to acknowledge that 90% of the middle class will get a tax cut in 2018 that averages $1600. In fact, many families that don’t pay taxes at all will be receiving money from the government for the refundable tax credits that have been increased from $1000 to $2000 per child.
Perhaps the most alarming “fake news” being promoted by the media is the impact this legislation will have on healthcare insurance. The Associated Press report in The Orlando Sentinel says the tax bill “triggers the loss of health care coverage for millions.” This blatant distortion of the truth is referring to the repeal of the Individual Mandate of ObamaCare, which was attached to the tax bill.
The Individual Mandate of ObamaCare forced all Americans to purchase healthcare insurance, whether they wanted it or not, or pay a tax to the federal government. In other words, the government coerced millions of Americans into purchasing a product they may or may not want or be punished by the assessment of a tax.
The Congressional Budget Office estimates that about 13 million Americans will choose not to purchase this healthcare insurance once the tax penalty is eliminated. (That should tell you how much people value this healthcare insurance.) This voluntary elimination of their healthcare coverage is what the AP is referring to when it claims the tax bill will “trigger” the loss of health care coverage. All of those people will still be able to purchase healthcare insurance with the same subsidies that were available before – they just won’t be taxed if they choose not to purchase the insurance instead. Those who choose not to purchase the health insurance will save the cost of the insurance plus avoid the previous tax that could be up to as much as $2000 per year.
This scandalous misrepresentation of the truth by our mainstream media threatens our democracy today. In order for democracy to survive, we must have a free and independent media – which we have. But that media also must be unbiased and report the truth without a political agenda. Otherwise the people remain uninformed or misinformed – either way of which is unacceptable.
(For more on this subject see earlier posts in Archives: Demagoguery in the Tax Reform Debate, The Individual Mandate – Worst Tax Ever?, Killing ObamaCare Mandate Would Lower Taxes)