- middle-class is not defined, but generally seems to be a family making around $50K
- we will be able to file our taxes on a postcard
- anyone who takes advantage of deductions, 'loopholes' and benefits in the tax code is 'sophisticated' (yay me!)
- big businesses are the 'people' who are complaining the most about the plan, so it must be good
- if you're living paycheck to paycheck, which would happen 52 or 26 or 24 or 12 times a year, depending on your pay cycle, all of your woes will be gone when you get your $1,182 average refund the following spring.
But it's typically a higher income person because of the way the Obamacare tax increase worked on that. You have to make a pretty good amount of money before you can even enjoy the ability to use that tax deduction.According to the IRS anyone can deduct a whole host of medical expenses as long as those expenses are greater than 10% of the adjusted gross income for the year, the expenses are not already covered under insurance, and a bit of other fine print. Here's partial listing of the 'higher income person" expenses that are currently deductible:
- payments to doctors, dentists, surgeons, and other providers, including non-traditional practitioners
- payments for inpatient medical care, in hospitals or residential nursing homes
- insulin and drugs requiring a prescription
- dentures, glasses, contact lenses, hearing aids, wheelchairs, crutches and more
- transportation to receive medical care, such as ambulances, and even costs associated with going to get care in your personal vehicle.
The interview then turned to history. As in, "history shows us that Congress will do the right thing when given the chance." The question pertained to having the people tax cuts expire, or sunset, before the end of the ten year deal. This was done, Inskeep noted, to prevent too much damage to the deficit, and it requires a future Congress to continue the cuts or that $1,182 would be lost.
Here's the history lesson from Ryan.
Well, first of all history, if it's any guide Congress doesn't have a big tax increase on middle-income families. This was because of the Senate budget rules, which obviously we're not big fans of here in the House. But I'd also like to attest to the fact that this is going to produce economic growth. The Tax Foundation, a non-partisan think tank, showed that because of the tax relief in this bill and the pro-growth provisions in this bill, particularly for businesses to expense and hire and build more factories in America that will lead to about a trillion dollars in additional revenue because of faster economic growth...
Grow the economy means we can get out of this stagnant economic malaise we've been in with 1 to 2 percent growth, get ourselves up above 3 percent growth like we used to be. You get that kind of economic growth which is clearly possible, and we think this helps us do that, then people can get wage increases. We have living standards go up. You have more jobs being created here that pay better. You have faster economic growth and you get more revenue as a result of that.And then Inskeep asked the question that all people who are not elected officials have been asking.After pointing out that there are conflicting studies on the tax plan, some supporting Ryan's take on things, some that don't.
We don't want to go back and forth with studies, but you do know that is is possible that businesses will take their tax savings and simply give it to stockholders in the form of dividends, or simply hold onto it in cash or buy back stock. What if they do? Does it matter to you?That IS the real question, right? What if they don't do the right thing with their new-found wealth? And what about the companies that pay nothing, or pay next to nothing now - why aren't they papering the country with new factories, new investment, new jobs and higher wages? Again, Ryan's answer was enlightening. What if the corporations don't do the right thing?
That's still not an excuse not to put American businesses on a more level playing field with the rest of the world. Here's the dirty truth of the matter. We live in a global economy whether we like it or not.So -- the fact that we're tossing this gigantic, even bigly bone to corporations, knowing that they might just continue to act the way they do today - that's no reason not to do it. Sheesh, Inskeep - what on earth are you smoking? Ryan didn't actually go that far, but he did go this far:
So what is happening in America is American businesses are leaving, going to other countries, building factories in other countries and foreign companies are buying American companies. This is costing us jobs. It's costing us economic growth. It's removing headquarters from our communities, which - there goes the United Way campaign, there go the jobs. And so, I don't think any of these arguments hold a candle to the fact that we better get competitive with the way we tax our businesses so we can make an incentive to keep businesses in America.He cites a conversation he had with a major corporate executive.
Let me just give you one more thing. I talked to the head of Intel, one of the biggest companies in America. They make all the microprocessors in your computers for the most part. They have 50,000 employees in America, factories spread across this country. They ran the numbers. They would save in taxes alone, over a 10-year period per factory, $2 billion in taxes if they just moved to another country. If they just go relocate to another country.
So our current tax code today rewards and incentivizes businesses to move money, capital, manufacturing, employees overseas. We want to reverse that trend so that we can keep businesses in America, jobs in America, expansion in America And that's why I'd say all these arguments about why we shouldn't be doing corporate rate reductions, I think they pale in comparison to the fact that if we don't do this, we'll see more of this ugly trend continue.According to this Marketwatch article, Intel's effective tax rate over the past five reported quarters, including state and local income taxes? Just 22%.
There was more on business incentives (100% write offs for factories and equipment instead of having to depreciate the costs over multiple years, for example) and about the cash that's offshore that can't be brought back (as if the current tax code refuses to allow businesses to bring that money home) and about how this won't increase the deficit because the growth is going to be so great (I thought he was going to say #winning at some point, but he didn't).
The bottom line is, Republicans somehow feel that the sun, stars and moon are going to miraculously align in such a way that
(a) companies are going to build factories in America, paying dramatically higher wages and dramatically better benefits to their American workers than they do overseas, at the same time keeping their prices low enough that they are competitive with foreign companies in their same market, and
(b) that people's wages over across the board -- not just the for the people working in the new factories, but all of the wages paid to all of our American workers -- are going to rise much more than they have during this stretch of massive corporate profits, so that no one will be living paycheck-to-paycheck any more, and
(c) that Americans are going to suddenly decide that it's great to pay more money for the products they need, want, and use.Do we really think all of that is going to happen with an additional $1,182 in a person's pocket, and a limited 'real' decrease in corporate taxes?
Well, all that matters is that Speaker Ryan and his colleagues in the House think so. And the Senate agrees, because very early this morning, they passed their tax plan, which will allegedly accomplish the same thing. Now, the two parties will have to sober up and figure out a way to reconcile the two bills and drop something on the president's desk so we get our big fat beautiful tax cuts for Christmas.
One more bit of Ryan's interview to come.