I’ve got good news and bad news for you about the GOP tax plan. The good news is that, under the proposed Republican tax plan, it’s okay for you to get sick. The bad news is that you better not get too sick because they are repealing the medical tax deduction. That deduction allows people who spend more than 10 percent of their income on out-of-pocket health costs to write them off. The cost of a nursing home is probably the most common medical deduction in this category. Nursing home costs can easily run up to tens of thousands of dollars per year and wipe out the savings of elderly residents who are paying out of pocket. The deduction often offsets taxes those Americans would owe on their retirement savings distributions.
Apparently this is how Republicans “help” middle class Americans. Then again, Republicans seem to be quite confused about who middle class American’s are.
In a fact sheet about their new tax plan, House Republicans recently referred to Americans earning $450,000 a year as “low- and middle-income.” That income level would put those taxpayers in the top 0.05 percent of all individual Americans. The median household income in the United States is actually around $59,039.
And I have some good news for small business owners. The tax bill is going to lower your rate to 20%. The bad news is that about 85% of small businesses already pay less than 20%. The “small” businesses that will be helped with this new lower rate are actually multi-million dollar businesses, not the mom and pop businesses most people run. And in an additional effort to “help” middle class Americans House Republicans also are going to remove the deduction of state and local taxes.
And then there is the elimination of the deduction that individual taxpayers receive for moving expenses if they moved more than 50 miles from their current residence. But using Republican wisdom (two words I seldom link together), corporations that move their businesses out of the country can still deduct those expenses. Something tells me that if you follow the money you will find out how this loophole got left in. I guess this would be like bad news/worse news.
Under the static model projecting the impact of this tax “cut”:
- The top 1% would see a 3.3% boost in their after-tax incomes.
- Those in the 90% to 99% income distribution level would actually see a after-tax income decrease.
- And Americans in the 40% to 60% income bracket would see a 0.5% increase.
At this point I’m beginning to feel like I’m pledging to a fraternity in Animal House, bent over and waiting for the paddle to smack. All I can say is “Thank you, may I have another?”
And let’s not forget, all those Republicans who screamed and whined and forecast the end of the world because of the deficit blowing up are now the same ones promoting a plan that will increase the deficit by over $1.5 trillion.
Maybe I’m wrong, but there seems to be a disconnect between House Republicans and reality.
But never fear. This short term suffering by the majority of Americans will soon be a thing of the past. Because the trickle down effect will soon be coming to a neighborhood near you. And if you believe that, I’ve got a used car with some slight flood damage from the recent hurricane to sell you at a good price.
Now I’m not going to compare these Republicans to a used car sales person, mainly because that would be unfair to used car sales people. I’ve been saying for quite a while that millions of Americans support a GOP whose policies are obviously detrimental to their own personal economics, but they don’t want to believe me. And I accept that they have a right to their own opinion. But they don’t have a right to their own facts. And the Republicans are the ones who put out these facts about the tax plan…they don’t deny the numbers I’ve mentioned above.
So the next time you see Kevin Brady at one of his many town halls (yeah…right), be sure you thank him for all of his “help” with tax relief. And maybe ask him about that post card he promised we would use to report our taxes. Or any of his other promises.
One last bit of good news/bad news. The bad news is we have to put up with Brady for another year until the next election. The good news is we have a great opportunity to kick him out of office. Actually, that is not good news. That is great news.