Hey, glad to be back
with you.
I've been paying
attention to the reform President Trump wants to apply to the current tax code,
both personal and corporate. This has
been a major theme of his since he began campaigning. In fact, he has repeatedly promised to lower
the corporate tax rate to 15%. In fact,
let's do the corporate thing first.
“When
it comes to the business tax we are dead last, …" This is technically true. The statutory corporate tax rate in the
U.S.A. is 35%, the highest in the world.
If any corporation paid that it would certainly stifle growth. However, in perusing the taxes paid by the 10
largest corporations in the Unit4ed States for the past several years I was
unable to find any that paid more than 20%.
Most were around 15% and some as low as 5%. All this information is available in the
corporate annual reports. Let's ignore
the POTUS' disingenuous statement and work with 35% as actual accurate and
applied number.
So,
the 35% is currently proposed to be cut to 20%.
Stop, wait, you say, the President said he would cut the rate to
15%. He did say that, however, like so
many things he has said or promised it has not come to fruition.
Trump long
ago promised to decrease the tax rate to 15% for corporations. Here's what he said on Wednesday September
27, 2017, "
"In fact, I
wanted to start at 15 so that we got to 20,…"
"Twenty is my
number, so I'm not negotiating that number," Trump said. "I'm not
going to negotiate."
Trump also claimed
that 20% was his goal all along, despite advocating for 15% as late as Tuesday.
"That's the
number I wanted to get to," the president said. "I wanted to start at
15 to get there. We really had to start there because of the complexity of the
numbers, but 20 is a perfect number."
According to the
President's own statements he never had any intention of cutting the corporate
tax rate 15% although he repeatedly assured America that was his intent. Oh well, live and learn.
So, we're going to
cut 35% to 20% , excellent. That's a 15%
point cut in the statutory rate. This
should result in a reduction of revenue of about 43%. Just a minute there, how can we have a 43%
reduction in revenue when the tax rate was only cut by 15%? Excellent question young Jedi. Here's the deal, you were theoretically
collecting taxes at a rate of 35%, you will now collect at a rate of 20%, that
15% cut represents 42.85%, let's call it 43% of the rate at which you were
collecting. Here's an example; 35% of $100 is $35. 20% of $100 is $20. You collected $20 rather than $35, so you
collected 20/35 or 57% of your previous collection. There is your 43% reduction in revenue.
If I'm a corporation
I love this. I wasn't paying 35% to
start with and I'm not any more likely to pay a statutory rate of 20%.
On to
individuals. Ok, the rates for
individuals are a little more diverse.
Here's a table for you:
2017
Proposed
10% $0-$9,325
12% Income not specified
15% $9326-$37,950 12% " " "
______________________________________________________________
25% $37,951-$91,900 25% Income not specified
28% $91,901-$191,650 25% " " "
33% $191,651-$416,700 25% " " "
______________________________________________________________
35% $416,701-$418,400 35% Income not specified
39.6% $418,401 or more 35% " " "
______________________________________________________________
Standard
deduction $6,350 $12,000
Personal
exemption $4,050 Eliminated
Let us review.
If you are the poorest of the poor who are
required to pay taxes your are subject to a 20% rate increase. No doubt this will go far to help make up for
the decrease in corporate tax revenue.
The people at the next level will receive a 20% rate decrease.
Folks currently paying 25% get no
benefit. Good, these folks are bearing
the majority of the tax burden for the United States now and I see no reason
why they should not continue to do so.
The taxpayers at 28% and 33% will receive a rate reduction of 11% and 24%
respectively. Why shouldn't they? Their incomes are considerably higher than
the median or average for the U.S.
The
people at 35% get nothing and the "elite" earners see a 12% decrease.
The above numbers
are for single filers. For joint filers
the percentages remain the same but the income levels differ.
So,
the big winners are corporate America and individuals who make the most
money.
Be not disheartened. "And we will make taxes simple, and easy,
and fair for all Americans."
DJT.
Corporate America gets a 43%
tax cut, followed by those who make substantially more than the median income,
because they deserve it.
Once
again the "little guy" gets screwed.
So, if you make $91,901 or more annually, good for you. If you make less or are poor, fuck you. What could be more fair than that?
I have to admit, it is simple and easy. It always has been simpler and easier to
tread on the backs of the weakest and poorest.
No doubt, Jesus is proud.
