Dispelling the Five Myths About the Tax Reform Bill

Dec 15, 2017 by

Dispelling the Five Myths About the Tax Reform Bill

By Henry W. Burke

12.15.17

 

The 12.14.17 Heritage Foundation article, “5 Myths About Tax Reform, and Why They’re Wrong,” is very timely with the tax bill slated for a vote before Christmas.  The authors, Adam Michel and Rachel Greszler, thoroughly debunk the common misconceptions about the tax reform package.  I strongly suggest that people read the full Heritage article at:

http://www.heritage.org/taxes/commentary/5-myths-about-tax-reform-and-why-theyre-wrong

 

1.  Myth #1 – This is a tax cut for the rich, and it will raise taxes for everyone else.

The Senate tax bill increases the amount of tax paid by the rich; and 93 % of taxpayers would see a tax cut or no change in 2019.  People making $40,000 to $75,000 a year would experience a 37 % tax cut; people making over $1 million would see a tax cut of only 6 %.

 

2.  Myth #2 – Repealing the Obamacare individual mandate will raise taxes on the poor, raise insurance premiums, and kill 10,000 people a year.

The tax reform measure will likely repeal Obamacare’s individual mandate, saving taxpayers a penalty of $695 to over $10,000.  The claim of killing 10,000 people each year is outrageous; when you consider economic growth and higher wages from tax reform, the tax bill could actually save lives.

 

3.  Myth #3 – Corporations and their rich owners will receive a huge windfall.

Because the burden of corporate income tax falls mostly on workers in the form of lower wages, the lower corporate tax rate will raise worker’s wages.  When governments cut corporate taxes, workers receive almost all of the benefit through higher wages.

 

4.  Myth #4 – Tax reform will be bad for seniors.

The proposed tax reform measure would not change the ways Social Security and investment income are taxed.  Many retirees will benefit from the doubling of the standard deduction. 

 

5.  Myth #5 – Tax reform will not cause the economy to grow, it will add to the debt.

The Heritage Foundation shows the Senate bill could boost the size of the U.S. economy by 3 %; other estimates show 4 % to 5 %.  With new federal revenue of $200 billion, most of the tax cut would be funded.  Clearly Congress must focus on cutting spending in order to lower budget deficits.

 

Lower and middle-income families would receive the largest tax cuts; and they will benefit from business tax reform through higher wages and more job opportunities across America. 

If you want the benefits of true tax reform, contact your Congressman today!

 

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