I have argued with at least a few people that are acting like this proposed tax plan would be exciting if implement for middle Americans. I just don't see it looking at the numbers.
If you are a normal tax payer already paying all their income tax at the 33% or lower mark which in reality is at least 99% of our households. Then you are very likely to see next to no change in your taxes with slight fluctuations up or down.
The tax brackets for single and married couples are being left virtually untouched with a trivial smoothing of the 10-15% into 12% and 25% left intact. A few higher income households will get dumped straight into 33% bracket instead of 28% but the added cushion of the standard deduction removes most of the impact.
That being said the removal of personal exemptions pretty much negates these benefits for any family with 2 or more kids. While single people and married couples with no kids and no home will see their tax liability drop a few thousand dollars. As others have mentioned head of house hold filers get absolutely shafted for no reason in the plans current state. I believe S Corp filers may get a lot of relief if the new corporate tax will effect them. I am not familiar with S Corp taxation.
I also suspect that the shift of personal exemption value to the standard deduction, which you must give up if you itemize, will remove most people incentive to itemize and hurt families with kids who used to see an advantage from itemizing when owning a home. Since I believe the personal exemptions used to still work even if you itemized. Not sure why no one talks about this but that seems like a huge slap in the face for family home owners, who in theory are supposed to be the priority of conservatives... I would be interested to hear if this is flawed logic and I am misunderstanding what they mean by eliminating personal exemptions.
By an large, assuming the above is all true, this is not tax relief for any working Americans at all, it is a mixed bag of tax hikes and minor relief for people without families which seems totally backwards and odd. It is pretty clear this is just another case of Repubs giving a tax break to the highest income individuals and corporations in an attempt to bolster investment and the economy, while trying to dress it up as something good by making the standard deduction look huge when really they are taking away a more equitable system.
If you are going to go for the Milton Friedman style of above board taxation you may as well eliminate corporate taxes all together and close out loop holes in the tax code allowing high income people to dodge progressive taxes. Then once all income taxes are coming from people as they effectively do anyway, we can reevaluate if some of those tax burdens should be evened out or lowered. I would think at the very least we would want to give an even tax cut to all brackets which this absolutely is not. Even knowing that proportionally the higher earners will net more money saved if given the same percent tax cut. At least that would jive with the statement of being a tax cut for all Americans.
The audacity of how they are selling these cuts is every bit as deceitful as the ACA telling people that their costs wont go up when they knew damn well that some peoples costs would rise especially in groups least deserving of bearing increased cost.
