Among the silliest objections to the Senateís tax-reform bill is the notion that the bill actually increases taxes. Despite its incredible lack of plausibility (Republicans raising taxes? Seriously?) this claim is still being repeated ad nauseam. This is one of the worst recent examples of media malpractice/blatant fake news. In more detail:
1. Literally 69 percent of the country took the standard deduction in 2013, the most recent data available. This means that 69 percent of Americans certainly got a tax cut, since the rates went down and the standard deduction doubled. In laymanís terms, that means youíll be paying a lower percentage on your taxes, and being taxed on less of your income. So if someone tells you that the bill hurts more people than it helps, tell them to stop reading fake news. This is basic arithmetic.
2. Letís look at the 30 percent now. The vast majority of them only itemized because the standard deduction was so much lower than it will be under the GOP bill. Going forward, expect 80 percent or even 90 percent of Americans to just take the standard deduction.
Itís a simple question: Did you itemize more than $24,000 last year? Because thatís the standard deduction for married couples under the GOP bill. A married person itemizing less than $24k or an individual itemizing less than $12k is getting a tax cut, so thatís basically the entire middle class. This is huge, because if you donít itemize, doing your taxes is much, much easier. Combined with the lower rates, these people will be keeping more of their own money.
3. All the rates went down (except the top bracket), so thereís a high chance that even people who benefited from the loopholes will save money (or at least break even). If you are paying a lower rate, the deductions you can take matter a lot less. The people who break even will still save money on tax prep, because theyíll be able to use Turbo Tax and get done in half an hour.
4. When you combine the standard deduction, rate cuts, and doubling the child tax credit, the only folks who are likely to see a tax increase are very rich people who live in very expensive houses and pay high state and local taxes. So if youíre not in that group, you can likely count on saving at least a little bit of money.
5. There are mainstream media reports that average Americans will see a tax increase. This is utterly shameless deception. Youíll notice that all of these mainstream media reports are talking about the year 2027. Thereís a reason for that: 2027 is the year that the individual rate cuts are set to expire. So if 2027 comes and goes with zero congressional action, the rates would go up. However, we all know that isnít going to happen. The journalists know it too, but theyíre rabid Democrat partisans whose coverage of the GOP bill is designed to help Democrats win elections next year. We especially know this because weíve seen this movie before. In 2013, the Bush tax cuts were set to expire, and Congress extended them, even though Democrats controlled two-thirds of government. There is almost zero chance of these rate cuts expiring in 2027.
Donít believe the lies. The GOP tax reform bill will provide at least modest tax savings for almost every American. If youíre a very rich person who owns a mansion in a high tax state/city, you will probably pay a little bit more money, but you can always dry your tears with $100 bills. If thatís not you, then relax.
You just got a nice raise.
Tim Dukeman, who blogs online at Fifty Cent Words, is working on a Masterís of Divinity at The Southern Baptist Theological Seminary in Louisville, Kentucky. Reprinted with permission from Fifty Cent Words.