Here’s How the Republican Tax Plan Is Going To Help You
Here’s How the Republican Tax Plan Is Going To Help You
Judging by the absolute hysteria on the left, and the doomsaying hashtags, you might think that the Republican “Tax Cuts and Jobs Act” is the end of all things. Without intending to shock you to death, we’d like to tell you that the apocalypse is not, in fact upon us.
The House and the Senate have each passed their own versions, which will have to be reconciled and a final version sent to both chambers before it goes to President Donald Trump’s desk. They begin that process this morning.
The plans from both sides are not perfect. Legislation rarely is. But the bills are passed, and it’s important for sane, non-doomsaying Americans to realize that there are many good things in this plan, and to understand how those good things will benefit them.
Here, we will address a few of them. This is not, by the way, every way in which you may benefit. Just a few. Consider this a primer.
The first item which is a net good and which will benefit Americans (my favorite) is the expansion of the 529 college savings plan.
Streiff wrote about this over the weekend, and it’s something designed to help American families and kids. I know, apocalyptic, right?
The 529 plan allows you to save up money, tax-free, for the purpose of paying for your kid’s college tuition. However, many conservatives throughout this process have discussed the idea of expanding the 529 plan to include K-12 private education, which may make it to the final piece of legislation. It’s a smart move because many of these schools can be expensive, and maximizing your dollars to pay for it is hugely helpful.
This expands school choice. Liberals hate school choice because it empowers parents without empowering the state. But that’s exactly why it’s good for American families. That’s a major win if it makes it to the President’s desk.
The next positive note is changing the standard deduction.
Despite what you’ve been hearing about the bill, there are some solid deductions still to be made. The standard deduction, for example, has been doubled in the Senate’s bill – up to $12,700 if you’re single and $24,800 if you’re married.
This means good things for you when you are paying taxes, especially given that the GOP’s tax plan does seek to dis-incentivize itemized deductions. Basically, doubling the standard deduction seems to be the compromise on that.
This is what we at RedState like to call a “middle class tax cut.” It’s that thing that haters are pretending doesn’t exist in this bill.
Meanwhile, the child tax credit is doubled – not raised as high as Senators like Marco Rubio would have liked – but jumping from $1000 to $2000 per child is a great start. This is especially helpful at a time when the current generation of adults is having fewer and fewer children because it means having more will be more affordable.
The hated individual mandate under Obamacare is gone. That’s maybe the biggest change of all, and certainly the source of the most heartache. This is the unconstitutional and onerous manipulation that extracts payment from you to the government for not playing along with their overpriced health insurance scam.
Policy expert Phil Kerpen addresses this succinctly here:
IRS data show that 79 percent of taxpayers who pay the mandate tax make less than $50,000 and 37 percent make less than $25,000.The best argument mandate supporters can muster is that if people are not taxed for opting out of Obamacare, more people will opt out.But it’s hard to see how people who might sign up solely to avoid the mandate tax are hurt by having the option to say no.And removing the mandate will set the stage for more sweeping health care changes to lower premiums and give Americans more health care choices next year.
This is where all the “billions of Americans will die” rhetoric is coming from. Remember how billions of people were dying of health insurance before Obamacare? Now they’ll die while Obamacare is still here, simply by virtue of not being forced to comply. Seriously, that’s what the left is saying.
The other most controversial (as far as Democrat vs. Republican) idea is the massive reduction of the corporate tax rate. This would theoretically allow for major companies to repatriate their overseas operations (and money) to the United States. This bit of economic stimulus would do wonders for job creation, which right now still could use a boost.
It will improve the economy by creating more jobs. Jobs, you may have heard, are how people get paid. This means more people earning money. Which in turn is stimulus. You know, the very basic way economies work. Sorry liberals, but that’s a good thing.
If you couple that with the standard deduction change and the child tax credits alone, you are looking at a better personal economic forecast. More money for you, a better economy for you, better jobs for you, fewer taxes for you.
Now, there are caveats. The bills, as noted above, are not actually perfect. One of the biggest flaws of the tax plan – the seeming favoritism toward major companies – has been tampered with by the inclusion of a pass-through deduction for smaller businesses.
Essentially, this allows for a sole proprietor to deduct an amount of the company’s earnings and then pay the rest of your taxes as ordinary income. The Senate’s approach, which was due to Sen. Ron Johnson and others holding the bill hostage to get it included, seems to be a bit fairer than the House plan, but either way, it allows small businesses to get their own tax breaks and keep them competitive.
All of this taken into account, the GOP’s tax plan will add $1.5 trillion to the deficit – something that Republicans shouted down whenever Barack Obama and the Democrats tried it. That means that Republicans also have an obligation to do what they have always said they would: Put America’s financial house in order.
Tax cuts and economic development are beneficial, but the United States government spends far too much, and tax cuts without reduced spending just throw things further into disarray. The next major budget fight has to account for this in order to make all of this worth it.
However, you can’t ignore the good that comes from this bill. There is a lot of it, and it should be celebrated. To repeat, Americans will have more money in their pockets, and growth will be stimulated. These are good things.
There’s still work to be done, but that is how the legislative process is supposed to work. It’s supposed to undergo major edits and revisions before the best ideas from both sides have a chance to shine.
We seem to be getting to that, and that would be the first real leadership the GOP has shown since it took office.