From: Keith Warf
U.S. Sen. Minority Leader Chuck Schumer, D-N.Y., called the Republican tax bill a “monstrosity.” U.S. House Minority Leader Nancy Pelosi, D-Calif., called it the worst bill in the history of Congress and that it was “Armageddon.” U.S. Sen. Joe Donnelly, D-Ind., voted “no” on the Senate tax cuts and reform bill. Unfortunately, none of them offered legitimate alternatives or details to support their statements.
A recent letter that appeared in The Republic called the plan a “boondoggle” and opined that the proposed tax bill rewards wealthy GOP donors and penalizes the rest of us. That is incorrect. He states that anyone making less than $75,000 per year will see a tax increase. That is incorrect. He states that if one earns $36,500 per year one will benefit from a “whopping” 30 cents per day ($105.60 per year) tax cut. That is incorrect.
Here are the facts based on the tax plan just passed by Congress:
-The new plan in essence doubles the standard deduction (70 percent of filers take it). It includes a $2,000 child tax credit as opposed to the current credit of $1,000. It maintains seven tax brackets but they are much less punitive than current brackets. An average single filer taking the standard deduction tax return will basically have four lines: gross income plus 401(k) contributions plus standard deduction equals taxable income. Simple and could literally be done on a postcard. Those married and filing jointly with children will have five lines — the same as listed for the single filer with an additional line for the child tax credit. Simple.
-Under the above guidelines a single filer with income of $70,000 after 401(k) contributions will pay $10,679 in 2017 and only $8,700 in 2018. That’s a reduction of $1,979. Hardly a tax increase as previously purported.
-A single filer with income of $36,500 after 401(k) contributions will pay $3,449 in 2017 and $2,750 in 2018, a reduction of $699. A bit more than a “whopping” 30 cents per day.
-A married couple filing jointly with two children and adjusted income of $70,000 will pay $3,233 in 2017 and $1,130 in 2018, thus saving $2,103. A couple making $100,000 will save $2,994 in 2018.
These examples are not based on opinion or political bias. They are based on the facts that exist today. It illustrates the new tax plan will be good for the majority of Americans and most, if not all, of Indiana residents.
The real benefit to the economy comes with the rest of the tax package that reduces corporate taxes, encourages capital investment and incentivizes repatriation of foreign earnings. This package will further boost our improving economy and help deliver three-plus points of gross domestic product — which we haven’t seen during the last eight years).
I encourage you to disregard the oft-seen misstatements, misrepresentations and political rhetoric criticizing these plans as a monstrosity, Armageddon or a boondoggle.
Did I mention that Donnelly voted “no” on the Senate plan?
Wishing you a happy and prosperous new year.