Biggest Winners And Losers From Tax Reform Proposals

One of the basic adages, of politics, is, It’s the economy, stupid. Perhaps more than anything else, American voters, have traditionally, sought and desired, an economy, where they benefited, in terms of net dollars, in their pockets! In today’s political climates, where many things, seem, topsy – turvy, we are observing, a group of politicians, who seem to be trying to desperately, maintain control of our government, making many, seemingly, unsubstantiated, promises, and relying on empty rhetoric, emphasizing politics over policy priorities! We have already, witnessed this, during the prolonged discussions, over health care, and what was referred to, as, Repeal and Replace, which promoted changes, but apparently, not necessarily, for the better! Presently, the Republicans, and President Donald Trump, have introduced, tax reform proposed legislation. The House of Representatives have already passed their bill, and the Senate is now considering theirs. While there are several significant differences, between the two versions, they have, in common, according to the vast number of economists, who have reviewed and analyzed them (and their impacts), the wealthiest Americans appear to be the biggest beneficiaries, regardless of the proclamations of either Trump, Speaker of the House Ryan, or Senate Majority Leader McConnell! This article will attempt to briefly examine, and review, the apparent winners, and losers.

1. Winners: Truly, either the House’s proposal to eliminate the Estate Tax, or the Senate’s proposal, to raise the limits, favors the wealthiest 0.2% of the American public. While there are significant amounts of tax loss, accompanying this proposal, proponents claim, it’s important, for the sake of fairness, and to protect family farms and small businesses. However, the reality is, there are very few, in either of these categories, with estates, of over $5.5 million. In addition, those who do not itemize deductions, will benefit from the doubling of the standard deduction. Larger corporations benefit, by reducing the maximum corporate tax rate, to 20%. Perhaps the biggest beneficiaries, might be, the politicians, whose major donors, have demanded these changes!2. Losers: The proposal by the Senate, to eliminate the deductions, for state and local income taxes, and real estate taxes, or by the Senate to eliminate the income tax, and capping the real estate tax deduction, at $10,000, hurts homeowners, who reside, in predominantly Democratic states, where these taxes are higher. The Republicans defend this, on the basis of fairness, to the rest of the country, while failing to admit, in most cases, these states pay the highest ratio of taxes to the Federal government, as a ratio, to what they receive. Those paying their own medical insurance, as well as all, who pay for health insurance, because when one eliminates the Single Mandate, it reduces the pool of the healthiest citizens, and thus, premiums will rise, for most! Larger corporations will gain a greater competitive advantage, over smaller or medium – sized companies, because the corporate tax reduction, doesn’t benefit them! Changing the rules regarding endowments hurts universities, and, thus, students.

There are many additional challenges, this legislation, will impact, if enacted. Wake up, America, because, this is not, tax reform for the middle class, but, rather, Welfare for the Wealthiest!