The Republicans have now passed a bill claiming to provide meaningful reform to the tax code.
As with any legislation, this bill creates winners and losers.
However, unlike most legislation in a democratic society, it will reward a select few at the expense of the majority.
While the press has admirably criticized this ill-conceived plan, there are a few provisions that have received minimal coverage, but have tremendous adverse consequences for many of us in future.
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The first is the elimination of personal exemptions. Under current tax law, individuals have a personal exemption of $4,050.
For a family of five, this represents an increase in the income subject to taxation by $20,250, which more than offsets the increase in the standard deduction.
That family, under current law, could deduct $33,750 from their gross income in 2018 (assuming they do not itemize). But if they had itemized deductions in excess of $13,000, the disparity gets worse.
The second overlooked provision is the increase in the bottom rate from 10 percent to 12 percent.
This means many people outside of top tier income earners will face a real tax increase.
If the hypothetical family of five has an income of $50,000, they would have a taxable income of $16,250 and would pay a tax of $1,625. Under the new bill, they would have a taxable income of $25,600 and pay a tax of $3,840.
Another provision in the reform bill essentially repeals the Johnson Act, and effectively turns tax-exempt churches into campaign tools for aspiring candidates. This will help Bible-belt Republicans (clearly an intended result).
Meanwhile, one of the strongest economies in the country is that of California, notorious for its high taxation. Perhaps low taxes are not the panacea that Republicans want us to believe they are.
David A. Silk,