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Edited by Coastal Elite:
12/20/2017 3:06:36 PM
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Most Americans will see a tax cut, thanks to lower base rates, a doubled standard deduction (which ~70% of households take), and a child tax credit that is higher and more refundable. These cuts all expire in 2025, but Republicans are assuming Democrats will extend them so they're not responsible for increasing everyone's taxes. Wealthy people in high-tax and high-home-value areas (see: coastal elites) may end up paying more, because their deductions for state and local taxes and mortgage interest are capped.
Anyway, those things are not the most important parts of the bill IMO. This bill is a business tax cut that also happens to have some other things thrown in. The bet is that cutting taxes for corporations and other businesses will lead to massive investment in America, and thus hiring and wage growth. This is obviously the subject of some controversy.
Apart from that, cutting the individual mandate is a really big deal. As is the way that Republicans plan to pay for this bill, which is by cutting welfare programs-- which is how the poor really end up getting hurt.
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Edited by TranscendentSalt: 12/20/2017 12:34:22 PMSo you're telling me the bulk of this plan depends on the [i]generosity[/i] of corporations and businesses?
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Generosity? No. Self interest? Yes.
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Depends how you would go about self-interest. Company executives could simply pocket the money saved or use it to benefit the company as a whole. Either one is a win for the executives but the former is a loss of possible growth for the company as a whole. It's ultimately their decision what to do with it.
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Well yes lol, but that's not how the supporters of this bill would put it. They believe businesses will increase wages and hiring not out of generosity, but out of a need to increase their value and competitiveness.
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Wouldn't increasing wages only increase competitiveness in the job market to get the higher paying job? I don't see how increasing wages increases the value of a company.
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The argument that corporate tax cuts lead to wage increases goes like this: 1. Tax cuts increase a company's after-tax return on investment. 2. Because of this, they invest more than they would if their taxes were higher 3. Worker productivity increases as they use those investments in better tools and whatever 4. Workers who are more productive earn more money So I guess I phrased my reply wrong, in that companies are not looking to increase wages just because they feel like it, but that it is a "natural" effect of increased investment as a result of tax cuts. And companies that are more productive *should* be more competitive and valuable to shareholders.
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Thanks for clarifying! [spoiler]Sorry if I came off a bit condescending.[/spoiler]
