I haven't gotten very excited about the tax bill either way, believing that it fiddled in minor ways with individual tax brackets and generally pushed food around on the plate. On the other hand, I do favor the lowered corporate tax rate, because I believe there should be no corporate tax at all: I'd prefer to do the taxing at the individual level, where any money not ploughed back into the means of production will have to go eventually, in the form of salaries to workers or dividends to stockholders. AT+T already has announced a $1,000 bonus to its workers to celebrate the tax cut. See other similar corporate responses here.
What's more, I think the cap on state and local tax (SALT) deductions will have a salutary effect on the most broken part of the current tax system, which is the failure of feedback mechanisms. As this article makes clear, a principal effect of the SALT deduction cap is to move toward a system in which the people who vote for higher taxes will be the ones who actually have to pay them. Any system in which citizens can easily vote for other citizens to shoulder most of the tax burden is bound to spin out of control.
I'd rather see lower taxes and smaller government, but if there must be high taxes and large government for important and worthy tasks that can't be accomplished any other way, then let those who want it put their money where their mouth is.
4 comments:
I was sorry that the SALT deduction wasn't completely eliminated, and that taxes weren't cut even more than they were. The corporations were very wise to have lined up clear demonstrations of how this would lead to profit sharing with their workers. I suspect the illustration provided by hundreds of thousands of workers receiving millions in bonuses right before Christmas will be long remembered.
The problem, of course, is the long term deficit/debt issue. But I am sanguine about the solution to that issue, which is the elimination of Social Security and Medicare as Federal programs. That should happen anyway, as 10th Amendment issues, and will be for the good of the nation. What if anything replaces them must be a state decision.
What replaces the Federal versions of Social Security and Medicare should be privatization of those programs, with the funds going into those private accounts being for the benefit of the savers' own future retirements and/or their own parents' current retirements, and not at all for the benefit of currently retired strangers on the other side of the country.
I have mixed feelings about mandating the savings--current wage earners are, after all, already used to paying 7.65% of their wages into the programs; having those funds directed into accounts for their own/their own families' benefit would not be that painful. On the other hand, that's still a major government intrusion into a citizen's decision-making.
Of course the transition from the current to that ideal will be expensive, but that just puts a premium on getting started.
Regarding OP, I'm more favorably disposed to the individual tax changes than Tex seems to be (which is not to say she's not favorably disposed; I'm just more so). It's a good interim step (I don't see any act of Congress as final, no matter the doom-saying NLMSM). That the individuals' reforms and reductions are "temporary" while the corporate reductions are permanent also makes no never-mind to me. Businesses plan—must plan—farther into the future than do us individual citizens. They are far less agile than we can be; their costs for things like production supplies and for labor, to name just two factors, have to be planned for far in advance. Businesses need the stability of permanence far more than we do; eight years is close enough to permanent for us. And: the only way these temporary changes wouldn't be extended or made permanent would be if the Progressive-Democrats then in Congress get their way and get the tax increases they're so desperate to have in the form of these reductions expiring.
The national debt is a serious problem, and it needs to be addressed decisively and promptly. But it cannot be without a sound, even burgeoning, economy, which we have not had for the last eight years, and which economy this tax bill has a chance of favorably affecting.
Eric Hines
I live in California, a major beneficiary of SALT provisions. I am amazed at how little attention people in this state pay attention to their own government.
I will be interested to see whether this tax bill gets anybody's attention. Certainly the local politicians will use it to stoke hostility toward the current administration,
Valerie
The floods of liberal commentators declaring righteously that $18 a week, or $75 a month, variously, is of "no use to these low-income families" is just astonishing to me. Even if they all live in the Imperial City and they're all both affluent and clueless, do they have no friend or family member, a normal one, to take them aside and quietly tell them that yes, actually nine hundred dollars a year is quite a bit of money?
And even in the absence of such a kind intimate, do they not realize just how bad this looks, politically?
There was one long Twitter argument with someone declaring the above; being told that (for example) this might let a family go out to dinner a couple of times a month; declaring that it is impossible to take a family of four to dinner for that amount; being given various examples (one of which was McDonald's); and finally declaring, huffily, that "that's not dining out!" I ask you.
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