A Republican touting the much-criticized tax bill recently told viewers to go to fairandsimple.gop to see the truth about it.
So I did.
The bill has three goals:
More Jobs. The bill will “make America the jobs magnet of the world.”
Bigger Paychecks. “Americans’ taxes are too high, so we are lowering individual tax rates for low- and middle-income Americans.”
- No mention is made of “high-income” or “obscenely-high-income” Americans — yet they will get by far the biggest reductions. You might get a thousand bucks, they might get a hundred thousand or a million. Is that adequately disclosed on the website?
- And, by the way? Why are “Americans’ taxes too high?” Is it because we’re running a surplus, collecting more than we need? (No, we’ve already run up $20 trillion in accumulated deficits and will now, thanks to this tax cut, be growing that debt faster than the economy as a whole, just as Reagan, Bush, and Bush did.) Is it because our infrastructure is in such awesome shape we can now cut back on maintaining it? (No, it’s in truly rotten shape — we desperately need to spend more.) Is it because we pay more than workers in other countries? (No, according to this, our workers pay a lower rate than those in Belgium, Austria, Germany, Hungary, Italy, France, Finland, Czech Republic, Sweden, Slovenia, Portugal, Slovak Republic, Spain, Greece, Estonia, Turkey, Luxembourg, Norway, Denmark, Holland, Poland, Iceland, or Japan.)
Fairer Taxes. The bill will “make filing taxes so easy that you can use a form as simple as a postcard.”
- First off, what does that have to do with fairness? Is it fair to give the lion’s share of the tax cut to people and corporations who don’t need it . . . and to do so at the expense of millions of lower-income Americans who will either lose their health insurance or see premiums increase? And at the expense of a higher National Debt whose consequences will hurt average Americans disproportionately?
- But since the postcard aspect of this is what Republicans seem to mean by “fairer” — no, people will not be filing on postcards. Start with the “simplification” of the child tax credit, as per this 1,100-word explanation in Forbes. In part:
. . . Under tax reform, part of the Child Tax Credit remains nonrefundable but the “old” Additional Child Tax Credit, which was refundable, has essentially been merged into the new credit. I know that sounds confusing but what it means is that the Child Tax Credit is just one credit worth up to $2,000 per child and includes a refundable piece of up to $1,400 per child. To be clear, the $1,400 refundable piece is included as part of the $2,000 Child Tax Credit and is not an additional credit (unlike before).
A refundable credit means that you can take advantage of the credit even if you do not owe any tax. Unlike with a nonrefundable credit, if you don’t have any tax liability, the “extra” credit is not lost but is instead refunded to you. To claim the refundable portion, you must have earned income (generally, wages, salary, tips, and net earnings from self-employment). For purposes of the new Child Tax Credit, the refundable portion is equal to 15% of your earned income which exceeds $4,500 up to the maximum credit.
. . . If you have three or more qualifying children, you can use an alternative formula to determine the refundable portion. Under the alternative formula, the refundable portion is equal to the amount by which your Social Security taxes (those taken out of your wages or paid out as self-employment taxes) exceed your earned income credit (sometimes called EIC or EITC).
I know that this tax reform was supposed to be about simplification, but not when it comes to the Child Tax Credit. In order to claim the credit, you must file a federal form 1040, federal form 1040A, or a federal form 1040NR. You cannot claim the child tax credit using form 1040-EZ.
The main thing, of course: HAVE A WONDERFUL NEW YEAR.
Quote of the Day
Very few American investors buy any stock for the sake of something which is going to happen more than six months hence, even though its probability is exceedingly high; and it is out of taking advantage of this psychological peculiarity of theirs that most money is made.~John Maynard Keynes
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