Tax Reform and Its Ramifications for America

As I type this post, the United States House of Representatives has just passed the reconciled tax reform bill by a 227 to 203 vote, which now goes to the Senate for a vote later today.  It too will pass there, barring any totally unforeseen last minute defections of "yes" voters.  President Trump will likely sign the bill into law later this evening.  The enormously positive ramifications on the passage and implementation of this act will be felt for nearly all tax paying Americans for many years to come as middle class tax payers get to keep more of their own money.

Yes, we absolutely should have preceded this tax reform with a spending cut reform bill.  There are huge amounts of waste, fraud, abuse, and frankly extra-constitutional (un-constitutional) spending sprees that occur every year in our federal government.  Billions of dollars need to be trimmed there, but frankly it simply is not ever going to happen with the progressive, foolish, and entrenched members of congress that we currently have from both parties sitting there. 

All of that said, I find it amusing how some of our good leftist friends are  all of a sudden concerned about this tax reform act and what it will do to the national debt.  While I can think of one or two of them who are sincere and consistent in this concern, most of these otherwise well-meaning leftist folk are simply playing partisan politics.  If they were legitimately concerned about our national debt, they would have been protesting like I did when President Obama's policies saw a doubling of our national debt from $10 trillion to nearly $20 trillion during his administration.  Needless to say, their concern rings a bit hollow now.

This is particularly true because this tax reform act will absolutely grow the economy and expand the tax base accordingly.  More jobs will be created, and many of them will be good paying jobs.  This means more taxes paid and more federal income accordingly.  Will the expanding economy pay for the tax cuts that will ensue?  Most objective economists don't think it will... as it is predicted to add $1 trillion over ten years by some of the more objective prognosticators.  Some of the more partisanly optimistic ones are sure it will pay for itself, while the partisans on the left are predictably claiming doom and gloom and ridiculously that it will increase taxes for the middle class, as per the congenital liar Nancy Pelosi.

The fact that this was passed without any Democrat support at all in the House and likely none in the Senate to come this afternoon means that when the already-improving economy further accelerates, the Democrats will have no cover with the American people of why they voted against giving more of OUR OWN MONEY back to us.

And then of course we have some leftists that wish to play the class warfare card as they continue to hate the rich first, last, and always.  This comes out particularly in the case of the decreased corporate tax rate reduction from 35 to 21%.  Now I am the first to agree that large corporations in particular should not be subsidized with tax payer dollars to effectively lower their tax rate; however, it is a pretty basic economic fact that the consumers and share-holders are the ones that end up paying that tax in the form of higher prices of goods and services needed to offset the companies' tax liabilities and in reduced returns and dividends to stock holders.  By making American corporations more competitive on a global scale, we will further see a growth in our economy and the creation of more jobs. 

Indeed, here are just a few examples of corporations that will be investing in our economy specifically because of Trump economic policies and  the tax reform: 

• Foxconn Technology Group announced it was investing $10 billion in Wisconsin to build a factory that will employ 3,000 workers. The company predicted it will benefit another 22,000 workers indirectly.

• Corning Inc. announced during a White House ceremony with Trump that it was investing $500 million in new U.S. production, creating 1,000 jobs.

• Broadcom Limited announced at another White House ceremony its plan to move headquarters back to the United States, bringing $20 billion in annual revenue.

• My own company of AT&T has said that if this tax reform is passed, they will invest $1 billion creating 7000 new high paying jobs domestically.

While serious debt reduction needs to take place, and I will continue to lobby my elected officials ad nauseum on this issue, I think this once-in-a-generation tax reform has far more upside to it than not.  It will indeed help far more Americans directly in their pocketbooks than anything done by the Democrats over the last eight years of the Obama administration.  Despite the sycophantic media towing the Democrat line as always, I truly think come mid-term elections in 2018 when people vote with their pocket-books that the Democrats will be horrified at the outcome once again, and the nation will be better off for it.

Crazy Life and Random Topics

Life has been crazily hectic for me lately, hence my silence in the blogosphere over the last several weeks.  That said, I have noted so many things going on in the world which I would really have loved to spend the time putting virtual pen to paper on the blog  to discuss lately.  As I am still pretty busy, I figured I'd do a quick summary of some random topics and my overall thoughts regarding them.  Cheers!

Tax Reform

While congress should also be introducing legislation into where they are going to cut spending that is wasteful, redundant, inefficient, or not in line with our constitution, I think that the tax reform legislation that is going into reconciliation between the House and the Senate is pretty good thus far overall.  First, despite our friends on the left's predictable whining on the topic, the return of some of our tax dollars is a good thing.  After all, this is NOT the government's money.  It is ours.  If the tax reform stays pretty close to its current iteration, it will help spur the economy via corporate tax cuts that finally make the U.S. competitive on the global stage.  (And it is not corporations that pay taxes anyway, but rather the consumers that do.)  Further, the increase in deductions for children and in improved tax rates will help a vast majority of middle class Americans.  No, my Leftist friends, the poorest half of Americans do not get a tax cut per se, as they do not currently PAY any income taxes.

Jerusalem is Israel's Capital

Duh.  It has been the capital of the Jewish people since the time of King David.  President Trump's official recognition of this fact along with the promise of moving our embassy from Tel Aviv to Jerusalem is long overdue.  Legislation was passed and signed into law stating this was to be done all the way back in the Clinton administration.  It has been waived every six months for decades now.  Every nation has the sovereign right to declare its own capital.  Israel has done so.  President Trump did a good thing by finally officially recognizing what has always been.  Kudos accordingly on this issue.

Sexual Harassment

Al Franken and John Conyers are resigning from congress for their disgusting behavior towards women.  Further, Roy Moore was not elected to the senate for his behavior also.  These are all good things, as our government should hold accountable those members of the House, Senate, and other federal offices to the same standards that the rest of the civilized world shares.  Further, the secret "settlement account" that is funded by the Treasury Department to the tune of $17 million over the last decade should have its expenditures brought forth into the public eye so we the people can see who has had TAX PAYER money used to settle sexual harassment claims against them.  If we cannot get these scum out of office via term limits, perhaps we can clean house somewhat through some more forced resignations.

Concealed Carry Reciprocity

The House of Representatives has passed a measure which now the Senate should take up that allows anyone with a valid concealed carry permit issued in a given state to travel so armed to another state legally.  This removes some of the legal liabilities that anti-gun states have erected in order to circumvent our second amendment rights, which effectively legally disarms law-abiding gun owners as they travel from their home state to certain other states.  This is akin to states being required to acknowledge and accept a drivers license issued in another state as legal and valid in their own state.

Planned Parenthood Investigation

The Department of Justice is finally starting an investigation into the illegal, barbaric, and ghoulishly reprehensible acts of Planned Parenthood selling body parts of aborted children.  If there is truly any justice in this world then the most innocent of all people, our unborn children, will finally have our government working on their behalf to hopefully serve justice and shut down this heinous practice of Planned Parenthood's.  Perhaps then we can start by removing all tax payer dollars from this vile agency next.

Hiking in Arches and Canyonlands National Parks

Last, I did manage to spend a few warm autumn days with my wife hiking in some of the red rock country in the south part of the state of Utah right before Thanksgiving.  The crowds were non-existent in Canyonlands and for the first time in a long long time, I was able to look out over a magnificent landscape of desert canyons and hear... absolutely nothing!  It was truly something for which I was thankful.  I hope everyone had a similarly wonderful Thanksgiving holiday!

 

 Cheers to all, as I hope to return to regular posts soon hopefully.

Drinking Beer and Tax Reform

President Trump and congress have stated that one of the next major issues on their agenda, which they will begin working on in 2017, will be tax reform. 

Now I don't necessarily believe they will be any more successful with this exceptionally difficult endeavor than they were with repealing and replacing Obamacare.  After all, the GOP senators had already voted to repeal the inaccurately named Affordable Care Act multiple times when it didn't matter and had no chance of actually being repealed when President Obama was in office.  Of course they refused to cast that same vote when President Trump would have signed the bill.  Why would we believe that these integrity-challenged charlatans would be willing to expend political capital to fix our broken tax code next?

Regardless, we can hope that these cowardly and incompetent people that populate our House of Representatives and Senate might overachieve just once in their careers and actually be able to enact meaningful tax reform.

Of course any tax reform that doesn't raise taxes on the "evil rich" will immediately be vehemently decried by some of our fellow Americans as being grossly unfair and exploitive of the poorest amongst us.  It is nonsense, as the poor do not pay federal income taxes currently and surely won't in the future, but mark my words that the cacophony of demonization will happen as surely as President Trump will continue his incessant "tweeting". 

With all of this being said, a friend of mine recently forwarded this simplified explanation of how our progressive tax system functions, and the likely results of that reform being excoriated by the ignorant and ideologically partisan pundits and politicians when and if actual tax reform does come to fruition.  Enjoy!

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.  If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
 So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

“Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20".  Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected.  They would still drink for free.  But what about the other six men?
How could they divide the $20 windfall so that everyone would get his fair share?  They realized that $20 divided by six is $3.33.  But if they subtracted that from every body's share, then the fifth man and the sixth man would each end up being paid to drink their beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

So the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (29% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (17% saving).

Each of the six was better off than before and the first four continued to drink for free.
But, once outside the bar, the men began to compare their savings. "I only got a dollar out of the $20 saving," declared the sixth man.  He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man.  "I only saved a dollar too.  It's unfair that he received ten times more benefit than me!"

"That's true!" shouted the seventh man.  "Why should he get $10 back, when I got only $2?  The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him.  But when it came time to pay the bill, they discovered something important…they didn't have enough money among all of them for even half of the bill!

And that, boys and girls, journalists, politicians, and pundits is how our tax system works.  The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.  Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.