Letter to the editor: Tax truths
To the editor:
Democrats are making hyperbolic negative responses to the new tax law. Here are some facts.
Taxpayers who do not itemize will get a tax cut. This group, which represents over 70 percent of taxpayers, will benefit from a higher standard deduction, a lower tax rate and a doubled child tax credit. Moreover, the working poor with no tax liability will benefit because the maximum refundable portion of the child tax credit has increased. (For the most part, tax increases will be limited to wealthy people with expensive homes living in high tax states like New York and California.) Due to Senate rules, these tax cuts will expire in eight years. However, even if Democrats control the government in 2026, I believe that they will extend the tax cuts for the middle class and working poor.
Regarding business taxes, the economy has surged in anticipation of the new tax law. The Dow Jones is up 35 percent since Trump was elected, thereby boosting 401(k) plans and fortifying defined-benefit pension plans. Unemployment has dropped from 4.7 percent to 4.1 percent. GDP growth is over 3 percent, doubling the 2016 rate. Some Democrats actually argue that business tax cuts do not benefit average Americans. Political bias has not only affected the judgment of these Democrats, but has also affected the judgment of distinguished liberal economists. The day after Trump’s election and in response to Dow Jones futures dropping overnight, Professor Paul Krugman stated that markets are plunging and may “never” recover. “Never” lasted one day.