It might not seem like a very happy day. No one likes to pay taxes. However, Tax Day is less of a strain on our finances than it used to be.
You can thank President Trump and congressional Republicans.
In December of 2017, they passed a large tax cut on income and corporations. The Tax Cuts and Jobs Act (TCJA) cut taxes for five of the seven marginal tax brackets. The standard deduction was effectively doubled for each type of filer, the Obamacare mandate was repealed, and the child tax credit was doubled.
Despite the lowering of taxes, the media and the Democrats have persuaded middle-class Americans that they didn’t receive any reduction in their tax bill.
According to an NBC News/Wall Street Journal poll, only 17 percent of Americans believe their taxes have been cut. A Reuters/Ipsos poll in March found that 21 percent thought their taxes were lowered.
The Democratic public relations strategy has worked.
They claim that the rich benefited at the expense of the lower class of income earners. There is no question that the wealthy received a sizeable tax break. However, they deserve it. They are the ones who pay most of the taxes in the country, and it isn’t even close!
The top one percent pay 40 percent of federal income taxes in the country. The top 20 percent of income earners pay 87 percent of federal income taxes. The bottom 60 percent pay no net income taxes.
But the left still like to claim the wealthy aren’t paying their “fair share.”
How is it fair that the wealthiest income earners have to pay such high taxes? That is what’s not fair.
The Democrats also overlook the effect that tax cuts have had on the economy.
The average American has seen their tax burden shrink by over a $1,000 a year.
As a result, the economy has benefited.
The overall unemployment rate is 3.8 percent. A very low rate, and one of the lowest on record.
GDP grew at a three percent clip last year — a rate of growth that was never accomplished in eight years of Barack Obama’s presidency.
Wages grew. They grew at a 3.4 percent rate; the largest in 10 years.
Corporations brought money back into the U.S. Hundreds of billions of dollars were brought back into the country — something President Trump promised would happen if corporate tax rates were lowered.
Historically, tax revenues decline in the short run after a large tax cut, but then increase after a year.
Democrats love to deride “trickle-down economics.” They claim that it doesn’t work.
They are wrong.
During the 1980s, economist Art Laffer proposed what was dubbed, the “Laffer Curve.”
Laffer hypothesized that for each dollar that was cut in taxes, there would be a corresponding gain in revenue to the federal treasury.
President Reagan was a proponent of the Laffer Curve, and used the theory in his pitch to the American people when advocating for his tax cuts.
Reagan ushered through Congress the largest tax cuts in American history. He cut the tax brackets down to three. The top marginal rate was lowered to just 25 percent.
An amazing achievement that led to higher tax revenue and an economy that grew at six percent a year. His opponents were proven wrong. Reagan and Laffer were right.
The Laffer Curve works to bring in more tax dollars. However, that isn’t the best reason to lower taxes.
The best impact of tax reductions is that you keep more of your own money. It is your money. You earned it!
The government didn’t earn it … You did!
Tax cuts aren’t a give-away to the rich. That implies that the federal government is entitled to their money. The arrogance of the politicians and government employees in D.C. is on full display with that kind of rhetoric.
This Tax Day, you have reason to be slightly less angry about turning over part of your income to the swamp creatures in D.C.
You can thank President Trump for that.