TAX CUTS SHOULD REWARD THOSE WHO PAY TAXES

As 2017 rushes to an end, political eyes are focused on Washington, D.C. Will the Republican Party, holding the White House with majorities in both the Senate and House, which should’ve already addressed Obamacare and illegal immigration as promised, be able to get its collective act together to pass tax reforms?

On cue, the hectoring on framing the idea of tax reform as giving money to the rich has begun.

Let’s clarify this notion with a simple question: How do you get tax cuts if you don’t pay taxes?

In America, the primary form of taxation by the U.S. Treasury is earned revenue — individual productivity for workers and corporate earnings for large businesses. So, if you’re productive, you pay the government, and it takes those funds and redistributes them for various programs. And, yes, safety net programs are essential; our government requires money to provide key public services. But if U.S. spending is out of control, why not remove the source of addiction — money to spend?

Federal budget figures put the lie to claims the military gets the most benefit from taxes. Spending on Social Security, Medicaid, Medicare and the food stamp program consumes most of the budget, according to data published by National Priorities, a left-leaning think tank nominated for a Nobel Peace Prize in 2014. In fact, those programs consume two-thirds of the budget.

It’s been accurately said by several, including Tennessee Gov. Bill Haslam, that our government is now an insurance program with a military.

With that in mind, here’s a quick explanation of the Trump tax plan.

According to The Washington Post, seven tax brackets are reduced to three, “with the threshold raised at which workers begin to pay taxes.” That sounds like working class help to me. By almost doubling the standard deduction, the overall amount of one’s taxable income is reduced, driving more low-income workers into a zero-tax bracket; in other words, they pay nothing.

So who pays taxes now? The top 1 percent of earners pay almost 39 percent of all federal income taxes, and the top 10 percent of earners pay about 71 percent of all revenues collected on income. So, 1.7 million workers, less than 1 percent of the U.S. population, carry the U.S. tax burden. Or, put differently, 99 percent of American workers pay less than 30 percent of all income taxes, with 37 million workers (or about 45.5 percent of U.S. households) paying no income tax. And don’t forget, jobs are created by those in the higher income brackets.

The president’s tax reform proposal makes it easier for working folks who can’t afford expensive CPAs to do their taxes and keep more of their earnings. And yet, it’s amazing that cutting taxes $11.98 trillion — slicing the U.S. government’s take from American paychecks over 10 years — offends people … but it does.

With the likelihood that spending cuts are ahead, organizations and “causes” that exist largely on federal money are among the most concerned. Others fear a return to welfare programs that require work. And, yes, big businesses, which can afford high-powered CPAs and D.C. lobbyists, will lose deductions or loopholes to hide their money.

U.S. spending in 2000 was $1.8 trillion, in 2008 $2.9 trillion and in 2016 approaching $4 trillion. If the government has your earnings, it will spend them. Nevertheless, it seems logical that only those who pay taxes will get a tax cut.

Americans should be able to work to have the American Dream, not to fund politicians and bloated government programs.

Robin Smith, a former chairwoman of the Tennessee Republican Party, owns Rivers Edge Alliance.