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The Maryland Taxpayers Association Report

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About Tax Cuts from MARYLAND TAXPAYERS ASSOCIATION

            Finally, tax cuts are the center of attention.  An outline of the President’s proposal has been presented.  Now we await the details.

            When citizens get to keep more of their money, our economy thrives and government  receives more revenue.   Individual imagination creates new young companies no one ever expected.  These improve our lives and grow jobs. 

Small businesses are the biggest creators of jobs.  In the last ten years, small businesses have been under assault.  Regulations have acted like a noose around good old American ingenuity. 

In order to maintain profits, large companies have sought more H1B visas.  These have kept salaries lower and left Americans without jobs.  Nearly 50 of our largest corporations have moved headquarters to foreign countries in order to escape the highest  corporate income taxes in the world.  More than 300 corporations are holding $2 trillion or more in profits overseas so as not to be double taxed by the US after having already paid taxes abroad. 

All of this nonsense has been well known for too many years only to have been ignored until now. 

Will significant across-the –board tax cuts actually happen?  The details have yet to be divulged.  It appears that corporations will get a 20% tax rate, about half of what they have now.  As for reinvesting overseas profits, it looks like there will be an initial small tax.  Why?  Americans deserve to get the full benefit.  Foreign companies don’t pay a tax to invest their money here.  Instead, their investments are welcomed.

Individual tax rates are being projected at 35%, 25% and 12%.  Further, the standard deduction will be increased to $24,000 for married couples and $12,000 for singles.  It appears there are be no personal exemptions in the proposal, but parents will benefit from child tax credits.  For itemized deductions, there is discussion of eliminating state tax deductions, but keeping mortgage interest and charitable deductions. 

As for the 35% rate, why?  It appears that the Congress wants the cuts to be revenue neutral.  Also, if the budget is not cut enough, it may affect the cuts.  This is very worrisome.  President Trump and Republicans seem to be caving to the Democrat idea that the “rich” are not taxed enough.  .  Further, what income levels are considered “rich”?  

This idea about the “rich” derives from Karl Marx.  Everyone should get equal pay, but humans won’t work equally or even harder for no extra rewards.  The problem with this is that Utopian ideas have always ignored human incentives.  Humans are not robots.  The first colonists, like the Pilgrims and Jamestown settlement, failed and had to revise their ways of working because fewer and fewer colonists were willing to work leaving too few to provide adequate food and shelter for all.  Goods and property are not free, they are the rewards of hard work.

With each of the preceding big cuts, the regulatory structure has been much smaller than currently.  To President Trump’s credit, he has repealed many rules by executive order, but there are many more to go.

Government always spends more than budgeted.   Acquiescing to the idea of a need to be revenue neutral and Congressional timidity about budget cuts is beyond stupid.  The U.S. needs very bold tax cuts to foster major economic growth.  Questions about the size of the proposed tax cuts have been expressed in many places.

Dee Hodges

Tax plan must be big enough to stimulate economy

Sept. 27, 2017, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement on the latest tax plan offered by President Donald Trump and the GOP Congress:

“Ronald Reagan’s signature 1981 tax cut amounted to 2.89 percent of GDP over the four years post-enactment, with simulative shockwaves being felt through the economy for decades. The unfortunate fact is that our nation’s economy today has been stuck in neutral for more than a decade, not growing above 4 percent since 2000 and not above 3 percent since 2005. 3 percent GDP growth is now considered a fantasy when not too long ago it was the bare baseline expectation for U.S. growth. To get out of this permanent, stagnant, new normal of slow growth, flat wages and increasing economic despair, Congress needs to be bold in passing as large of a net tax cut as possible. Now is not the time for the tepid or weak of heart. Our nation’s economy needs to grow, and the government needs to consume a smaller proportion of our overall wealth.

“The outline…of the tax plan appears to be the bare minimum economic stimulation needed for expanded job growth, higher wages and bringing the 9 million 16 to 64 year olds who would otherwise be a part of the labor force back into the economy. While we recognize that the devil is in the details, the GOP Congress and President Trump are taking a step in the right direction with the tax plan that has been outlined. Of particular importance is the lowering of the corporate tax rate which will make it profitable for businesses to bring and create middle class jobs in the U.S. What’s more, the simplification of the individual tax code along with doubling the standard deduction will be a boon for the average American taxpayer.”

Membership in MTA is $25.  Contributions are always appreciated and can be sent to Maryland Taxpayers Association, 9613-C Harford Road, #527, Parkville, MD 21234.

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