An Insider's View on Republican Tax Revisions: Do They Serve the Average American Household?
As an experienced contributor to both state and federal tax reforms, it is clear that Republican tax revisions often fall short in benefiting the average American household.
The standard deduction and child tax credit are exciting improvements. Doubling the standard deduction and increasing the child tax credit for dependents under 17 years old sounds promising. However, for many households, these changes will render itemizing unnecessary, simplifying their tax process and potentially eliminating tax preparation fees. But these benefits may be overshadowed by state and local tax increases, negating the savings from federal relief.
Tax Loopholes and Their Impact
The current tax code is ripe with loopholes, especially for higher incomes. These loopholes can be exploited in various ways. For instance, self-employed individuals like myself, who started with entrepreneurial ventures, have leveraged such loopholes to offset income. For instance, the cost of a computer used for business purposes can now be claimed as a tax deduction, along with relevant software training classes.
The proposed tax code also includes loopholes for higher incomes. While I do not worry about millionaires paying their fair share, it is important to address the existing loopholes. One straightforward way could be to significantly increase the income thresholds at which Social Security contributions are made. This would level the playing field for all income brackets.
Historical Perspective on Tax Cuts
Throughout my forty years of experience, it has been clear that Republican tax cuts often result in increased state and local taxes, effectively eroding the benefits for the average American. A prime example is the story my wife shared. She was so efficient that she could take on the duties of her departing coworker, saving the company $30,000 annually. However, her salary barely increased. On the other hand, even as a hardworking and meticulous employee, I never earned an extra dime despite consistently outperforming multiple employees and making fewer mistakes.
The fundamental issue remains: greed has never changed since the dawn of mankind. Wealthy business owners hold significant power and can dictate the terms, leaving blue-collar workers powerless to negotiate equitable compensation or benefits.
Conclusion
In conclusion, the Republican tax revisions, while designed to provide relief, have often failed to deliver meaningful benefits to the average American household. Instead, they have led to inequitable outcomes where state and local taxes increase, negating the federal savings. It is crucial to address these issues comprehensively and ensure that tax policies benefit all income levels equitably.