Democrats released their plan to increase taxes if they win majority control of the House and Senate after the 2018 midterm elections. Here are the details of what Americans have to look forward to if that happens.
Increase the top marginal income tax rate from 37 percent to 39.6 percent. This nearly 3 percentage point increase in the top personal rate is not only a hike in the top bracket levy, but it's also a direct tax increase on small and mid-sized businesses. The 30 million companies which are organized as sole proprietorships, partnerships, Subchapter-S corporations, and LLCs pay their business taxes on their owners' 1040 personal tax returns. This would remove the benefits that workers are now seeing as a result of lower rates in their paychecks. Starting February of this year over 90 percent of workers saw higher take home pay. American workers will continue to see those bigger paydays for as long as the tax rates in law remain in effect.
Increase the corporate income tax rate from 21 percent to 25 percent. Up until this year, the United States labored under the highest corporate income tax rate in the developed world. As a result, jobs and capital were fleeing America for countries with lower tax liabilities. Finally, after many years of bipartisan consensus that the U.S. corporate rate had become an impediment to attracting new jobs and investment, Congress cut the rate all the way from 35 to 21 percent. At that rate the United States is still only somewhere near the middle for corporate tax rates for developed nations.
As a result of this change many large companies have announced new factories and jobs would be built in America instead of in other countries. In addition to that many companies are announcing tax cut bonuses, raises, 401(k) match increases, and other benefits that companies are passing along to workers. Presently that amounts to 431 companies and over 4 million workers that have benefited from the tax decrease.
Not content to endanger all that good news, the Democratic tax increase goes on to call for the following:
Bring back the alternative minimum tax (AMT) for 4 million families. Up until this year, middle class families had to calculate their income taxes two different ways, and then pay the higher result. This was due to a provision of the law known as the "alternative minimum tax" or AMT. The new tax law all but repealed the AMT for 99 percent of these families thanks to a higher AMT "standard deduction." Congressional Democrats would bring back the dreaded AMT.
Cut the "death tax" standard deduction in half. For many years between 60 and 70 percent of poll respondents have consistently called for a full repeal of the death tax. The new tax law didn't repeal the death tax, but it doubled the death tax's "standard deduction" from $5.5 million to $11 million. As a result, far fewer family businesses and farms will be subject to the death tax, and many smaller firms can shed the costly insurance, legal, and actuarial costs of avoiding the death tax. Like the top personal rate, the death tax is not something that really affects the rich, who have plenty of resources to avoid the levy. Rather, it hits hardest against small businesses and the middle class. Democrats have never understood this, which is why it's not surprising they want to reduce the death tax's standard deduction back down to what it was before.
The Democrats strategy doesn't make very much sense considering that the new tax cuts are wildly popular with the vast majority of Americans on both sides of the political isle. Instead of figuring out how to raise taxes, Congressional Democrats would do better to work in a bipartisan manner to help the middle class and to make the pro-jobs tax relief into permanent law. The new tax cut is only temporary.
Dems in trouble for midterm election
https://capitalismizawesom.wixsite.com/rightabouteverything/blog/poll-shows-democrats-in-danger-for-midterm-elections.
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