Who got a tax cut and refund this April 15? If you look closely at the entire 2017 tax law, you'll find that the vast majority of dollars are going to high-income families. Yes, Congress threw the …
Who got a tax cut and refund this April 15? If you look closely at the entire 2017 tax law, you'll find that the vast majority of dollars are going to high-income families. Yes, Congress threw the middle class a bone with greater deductions and reduced rates (and by the way, tax refunds are not the only way to track the new law, as many have complained). But, other new deductions are only for the affluent. For example, a 20 percent deduction using the new Qualified Business Income deduction phases out at $315,000 for a couple filing jointly. Clearly an affluent couple get a handsome check in the mail. Also, remember that the reduced rates apply to everyone, but the affluent will see those new rates applied to a much larger pot of money to begin with. It's all in the math.
Now you may say, "But the poor got a tax cut, so they're doing better!" But here's the hidden side effect: The money that's not going to the U.S. Treasury because of all the money the rich saved means government budget deficits are ballooning. According to Bloomberg News, for February of this year, the U.S. government spent a record $234 billion more than it earned, in one month! That's more than the government of Switzerland spends in the entire year. So, how does this affect the poor? It's simple. Budget cuts for the 2020 budget proposals are already in the news. A huge reduction in services is in the pipeline: Medicare, Medicaid, food stamps, student loans, Special Olympics and on and on. Who needs the support services so they can do better at educating their kids, get job training and have a safety net? Not the folks who got the majority of these tax cuts.
I'm issuing a Tax Cut Bounce-Back Challenge to affluent people in this community. My accountant (yep, I need and can afford one) has calculated how much my wife and I benefited from the 2017 tax law and removed any proportional changes. In other words, we'll keep/pay any tax money if my business earns less/more money, respectively. But we will donate the vast majority of our tax-cut benefit to local nonprofits and schools. The rest we will put toward agricultural infrastructure projects on our permaculture demonstration site where we live, grow food and teach.
On July 8, 2003, the rock band Pearl Jam was past closing time at a long concert. In order to pay the police and security overtime, singer Eddie Vedder said, "We're gonna continue and it's gonna cost us $14,000. But we're gonna continue, because you've made us rich… and we still don't agree with the tax cut and we're givin' the money back to the people and we're gonna keep playin' and we're gonna continue." That's the spirit I'm asking for here in Taos. I challenge those of us lucky enough to get big tax cuts to "give the money back to the people" in this community whom we love so much, to the people who need it most.
Mike Musialowski tutors students in math and science and is active in agriculture and sustainability nonprofit organizations.
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