Republicans Are Forced To Print More Money
The truth about the United States of America that the population doesnt want to recognize is that we cannot afford the expense of our fabricated wealthy class.
We cant allow a tiny percentage of elites to accumulate obscene wealth while our national debt spirals out of control.
Trumps disastrous policies put our unsustainable deficit economy into overdrive. We need to eliminate our debt, not pass laws that drive it into the stratosphere.
U.S. tax revenue as a proportion of GDP dropped the most out of any country in the Organisation for Economic Co-operation and Development in 2018, according to a report released Thursday.
Thats largely due to the $1.5 trillion GOP tax cut President Donald Trump signed into law in 2017 Ganesh Setty
The kind of people that benefited from Trumps tax cuts didnt earn that wealth. They have it because the government gives them a break at every opportunity. Whenever they get in trouble, the government bails them out.
This was emphasized once again when Trump signed the CARES act into law on March 27th, 2020. Although this law was touted as an effort to help the middle class, the truth is that, like always, most of the money went to the rich:
Inflation is bad today because Trump handed out money to rich people hand over fist. First he slashed their taxes which dramatically reduced tax revenue, then he printed up trillions of dollars to hand out to major corporations.
Will Trumps Tariffs Reduce The National Debt
This past weekend, President Trump tried out a new defense of the controversial tariffs his administration has imposed: They will reduce the U.S. national debt. As a candidate, the president promised to eliminate the entire national debt by the end of his second term. And tariffs do increase government revenue.
Corporate Income Taxes Were Way Down In 2018
One of the biggest results of Trumps tax cuts was lowering the corporate income tax rate to 21% from 35%. This change appears to have benefited businesses greatly, because the corporate income tax payments collected by the IRS decreased by 22.4% from 2018 than 2017.
Looking just at year-over-year returns, businesses enjoyed an increase of 33.8% in tax refunds nationally from 2017 to 2018. The average business income refund varied by state, but businesses in some states appear to have received a major windfall. In Maryland, for example, businesses received total refunds worth 238.6% more .
The tax savings that businesses received from President Trumps tax plan could offset the benefits of the tax reform to workers. The lower corporate tax rate is also a permanent change to the U.S. tax code, but the lower tax rates for individuals are temporary and will expire in 2025. That means workers could receive a tax increase in five years even as businesses continue to pay a lower rate.
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Were The Tcjas Revenue Effects Anticipated
None of these findings should be surprising. Almost every major analysis of the legislation correctly predicted that revenues would fall in 2018 relative to a scenario without the tax cuts, with sources ranging from government entities such as the CBO and the Joint Committee on Taxation, to non-governmental think tanks such as the Urban-Brookings Tax Policy Center and the Tax Foundation, academic researchers in studies by Robert Barro and Jason Furman, and in analyses using the Penn-Wharton Budget Model.
The Lowered Corporate Income Tax Rate Makes The Us More Competitive Abroad
One of the most significant provisions in the Tax Cuts and Jobs Act was the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent. Over time, the lower corporate rate will encourage new investment and lead to additional economic growth. It will make the U.S. more attractive for companies by increasing after-tax returns on investments and will discourage companies from shifting profits to low-tax jurisdictions.
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Student Loans And Tuition
The House bill would have repealed the deduction for student loan interest expenses and the exclusion from gross income and wages of qualified tuition reductions. The new law left these breaks intact and allowed 529 plans to be used to fund K to 12 private school tuitionup to $10,000 per year, per child. Under the SECURE Act of 2019, the benefits of 529 plans were expanded, allowing plan holders to also withdraw a maximum lifetime amount of $10,000 per beneficiary penalty-free to pay down qualified student debt.
The Trump Tax Cut Is Two Years Old Where Are The Jobs Being Created
US President Donald Trump speaks about tax cuts for Americans from the Rose Garden at the White … House on April 12, 2018 in Washington,DC. / AFP PHOTO / Nicholas Kamm
AFP via Getty Images
President Trump signed the Tax Cut and Jobs Act into law in December 2017. It cut taxes for most Americans, especially those living in low-tax states.
But higher wage earners living in high-tax states such as California and New York werent able to deduct more than $10,000 of state and local taxes off of their federal tax returns, reducing the value of their tax cut, and, in some cases, increasing their overall tax burden.
Because of the $10,000 SALT deduction cap, the new federal tax law changed the effective tax rates in all 50 states at once, as if 50 separate state legislatures passed a new tax code into existence at the same time. This makes for an interesting economic test, measuring how lower tax states might attract more job-creating capital than their higher tax states counterparts.
In the last year of the Obama Administration and Trumps first year in office through the tax cut in December 2017, the 23 states with higher taxesdefined as the average 2016 SALT deduction being $10,000 or moresaw private sector job growth of 2.7%. In the same period, private sector payrolls grew by 3.6% in the 27 low-tax states, a modest 33.6% advantage.
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Explaining The Trump Tax Reform Plan
Lea Uradu, J.D. is graduate of the University of Maryland School of Law, a Maryland State Registered Tax Preparer, State Certified Notary Public, Certified VITA Tax Preparer, IRS Annual Filing Season Program Participant, Tax Writer, and Founder of L.A.W. Tax Resolution Services. Lea has worked with hundreds of federal individual and expat tax clients.
For most people, tax season comes to a close on April 15 each year. In 2019, many taxpayers were surprised to find they had to pay more taxes than the previous year, while others received significantly lower refund checks from the Internal Revenue Service even though their financial circumstances didn’t change.
Many tax specialists and accountants urged their clients to update their withholdings in order to avoid a hefty bill at tax time.
But how did this happen? Let’s take a closer look at President Trump’s changes to the tax codethe largest overhaul made in the last 30 yearsand how it impacts taxpayers and business owners.
Did Trumps Tax Cut Improve The Economy
One major reason that President Trump said he wanted to pass his tax plan was to improve the economy. He believed there would be more business investment, which would stimulate the economy and, in turn, help working Americans.
On the basis of the stock market and gross domestic product , the economy is in fact performing very well. But those trends already existed before the TCJA became law. The unemployment rate 3.5% in February 2020 has reached its lowest level in more than 50 years, but data from the U.S. Bureau of Labor Statistics shows that unemployment has been steadily declining since 2010. There isnt currently enough evidence to show that Trumps tax cuts lowered the unemployment rate more quickly. Preliminary data from the U.S. Bureau of Economic Analysis , released in February, also suggests that GDP has actually been slowing as of late.
Along with the U.S. bringing in less tax revenue since Trumps tax reform, the U.S. deficit has increased significantly. Data from the Federal Reserve Bank of St. Louis shows that the federal deficit grew 17% from 2017 to 2018 and 26% from 2018 to 2019. Federal debt passed $1 trillion in 2019 and the Congressional Budget Office expects the deficit to average $1.4 trillion from 2021 to 2030. Whether the size of the deficit should matter is an issue still being debated by economists, but its clear that Trump himself expected his tax cuts to not just lower the deficit but pay it off entirely.
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What’s Wrong With The Status Quo
People on both sides of the political spectrum agree that the tax code should be simpler. Since 1986, the last time a major tax overhaul became law, the body of federal tax lawbroadly definedhas swollen from 26,000 to 70,000 pages, according to the House GOP’s 2016 reform proposal. American households and firms spent $409 billion and 8.9 billion hours completing their taxes in 2016, the Tax Foundation estimates. Nearly three-quarters of respondents told Pew four years ago, that they were bothered “some” or “a lot” by the complexity of the tax system.
An even greater proportion was troubled by the feeling that some corporations and some wealthy people pay too little: 82% said so about corporations, while 79% said so about the wealthy. While the new tax law cuts a number of itemized deductions, most of the loopholes and giveaways that were slated for repeal in earlier bills have been retained in some form.
The individual tax rate schedule, which Trump would have cut to three brackets, remains at seven. In other words, this legislation may do relatively little to simplify the tax code. The other issues that the Pew survey indicates that bother people the mosttaxes for wealthy individuals and corporationsare likely to be exacerbated by the law.
Did The Ctc Help Low
The CTC can only bring your tax liability how much income tax you owe for the year to $0. If the CTC brings your tax liability below $0, you can get the remaining part of it refunded to you through the additional child tax credit, or ACTC.
The ACTC was claimed more in 2018, overall, but taxpayers with an AGI of less than $25,000 claimed the ACTC 10.9% less. Taxpayers with AGI under $10,000 saw the biggest decline in ACTC filings, claiming it 19.4% less in 2018 than 2017. This drop in ACTC claims suggests that low-income Americans may not have gotten the full child tax credit they were entitled to, even though more families were eligible to claim the credit overall.
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The Republicans Love To Wage War On The Poor
The Republican messaging is very effective. They love to attack the poor. They love to insist that the only cause of poverty is laziness. Sadly, a large percentage of the American population believes these lies:
A slight majority of Republicans believe that laziness is to blame for poverty in American, according to a new poll out Thursday.
The new Pew poll finds that 51% of Republicans agreed that lack of effort on his or her part was the primary reason that a poor person would find his or herself in poverty, while only 32% put the blame on circumstances beyond his or her control. Conversely, Democrats are more likely to blame circumstances rather than a lack of effort, 63% to 29%. Independent voters track more closely to Democrats on this issue as well, with 51% blaming circumstances and 33% blaming laziness for poverty Morgan Whitaker
Republicans also love to use coded language. Lets go Brandon, is an example of a Republican catchphrase that stands in for profane language.
Consider this the next time a Republican politician makes disparaging comments about the poor. Who are the poor in America? What does the word poor stand for?
When Republicans say poor people are lazy, its really meant as a stand in for all the groups they already despise. This includes: women, blacks, Hispanics, children, and the disabled. It seems like all Republican policies are meant to target and punish these groups. Basically, their proposals are meant to hurt everyone but white men.
Promise: Business Will Come Back
The law made it cheaper to bring back earnings from abroad, while also keeping companies from perpetually avoiding taxes on those profits by deeming them repatriated. It placed a 15.5% tax on cash and other liquid assets held by multinationals offshore entities, and an 8% rate on other assets held overseas. Normally, those profits would be subject to the corporate tax rate, which at the time was 35%, when brought back to the U.S
The impact on U.S. companies investments abroad is clear: Repatriated dividends spiked starting in 2018.
Tax professionals who study the effects of the laws international tax elements say there havent been many prominent inversionsin which U.S.-based companies restructure so that they are owned by a foreign parentin recent years.
But corporations can still be taxed on international profits below the domestic 21% rate, and the law didnt create the fully territorial tax regime Republicans were aiming for, tax experts said. The law and IRS rules for parts of the international provisions also offer some competing incentives, both encouraging and discouraging a buildup of assets overseas.
The whole thing was badly structured if the incentive here was to move assets back to the U.S. or create jobs, as opposed to just moving cash back, said Reuven Avi-Yonah, a professor at the University of Michigan Law School and director of its international tax LLM program.
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Who Used The Qbi Deduction In 2018
Trumps tax reform created the qualified business income deduction . You dont need to itemize to take the QBI deduction and its available for taxpayers who have certain types of business income or who earned dividends from certain types of investments .
That means if you make money from certain types of investments, you can pay less on your income taxes thanks to the QBI deduction. Taxpayers across all income ranges did claim the deduction, but high-income taxpayers claimed the QBI deduction more frequently and received more on average.
Nationally, the average QBI deduction was $7,947 in 2018. Of tax returns with an AGI of less than $100,000, only 8.8% claimed the QBI deduction. The average value of their deduction was $2,134. Tax returns with AGI of $100,000 or more claimed the QBI deduction nearly one third of the time for an average deduction of $15,222. Moving up the income ladder, nearly half of all tax returns with AGI of at least $250,000 claimed the QBI deduction in 2018, and got an average deduction of $36,455.
The $2 Trillion Scenario
The most pessimistic estimate of the legislation’s budget effects came from the Committee for a Responsible Federal Budget , which argued on Dec. 18, 2017, that Congress is using a flawed baseline to measure the law’s budget effects .
These “gimmicks,” the think tank argues, obscure $570 billion to $725 billion in extra costs over 10 years, bringing the price of the law to $2 to $2.2 trillion. Factoring in expected economic growth , the cost falls to $1.5 trillion to $1.7 trilliontriple the Tax Foundation’s dynamic estimate. That does not count additional debt service costs, though. With interest, the law could cost $1.9 trillion to $2 trillion.
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Perverse Incentives In The Tcja May Be Encouraging Investment Overseas Rather Than In The United States
While cutting corporate tax rates, the 2017 tax law also overhauled the tax rules for U.S. companies overseas profits. In fact, one of the claimed selling points of the TCJA was that the legislation would allow U.S. firms to access profits that had been trapped overseas by the old international tax system, enabling them to invest more in the United States. In reality, these profits were never really trapped overseas, and past experience had demonstrated that extending special low tax rates to past overseas profits would not boost jobs or investment in the United States.
It is still early, but a new study finds evidence that the TCJA is producing more investment overseas than in the United States. The study found that since the passage of the TCJA, the multinational firms that had been subject to high repatriation costsin other words, the very firms that proponents claimed would be able to tap their trapped cash to invest in the United Stateshave increased their investment overseas rather than in the United States. Pointing to the incentives created by the GILTI and FDII provisions, the authors conclude that these early results with a stated goal of the TCJA to spur domestic economic growth. If the tax law is incenting U.S. firms to locate more tangible assets overseas instead of in the United States, it would put U.S. workers at a further disadvantage.
Judge Eviscerates Trump’s Bogus Lawsuit Against Hillary Clinton
Trumps Make America Great Again sloganeering tapped into honest nostalgia for a more economically just America. The post-World War II boom created broad prosperity: The wages of the bottom 90 percent of Americans grew in line with the overall economy. But that trajectory flat-lined in the mid-1970s. And the share of the nations income accruing to the bottom 90 percent shrank from close-to-half to barely one-third. A new study by the RAND Institute offers insight into how different America could be today had the post-war trend continued: The median worker would be making $57,000 a year, instead of just $36,000. In aggregate, the 90 percent have been $47 trillion richer, taking home an extra $2.5 trillion in 2018 alone. What happened to the bottoms share of Americas expanding economic pie? Economist Kathryn Edwards, co-author of the RAND study, explains simply: The top ate it.
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