Time for the GOP to show their cards

[Robot_Arm]

@adaher

First, you think 47% of Americans are too poor to pay taxes?

Second, math is your friend. If you have two kids, that’s $2000 taken directly off any tax liability you owe right there, if you actually owe any taxes. That’s the child tax credit. Then there are the regular deductions: $3950 for each dependent. So added to the standard deduction, we have no tax liability up to $28,200 already. Then you have the credit, which means that you owe no taxes until your tax liability goes over $2000. That gets you to almost $50,000 before you owe a dime. If you have a mortgage and itemize, you can go even higher before owing anything. Meanwhile. the single renter has tax liability starting at just over $21,000/yr.

Oh, and the child tax credit is refundable, so if a family of four makes $40,000, they actually have negative tax liability.

Okay. Now, if the taxes for those people go up, and the reform is revenue neutral, whose taxes will go down?

[adaher]

Depends on how you do the tax reform, but if you were to eliminate most middle class tax deductions and raise the standard deduction, a lot more poorer workers would be eliminated from the tax rolls, while leaving the middle class families currently paying no tax with a rather small tax bill.

Let’s say that we reduce the lowest tax rate to 8%, as recommended by the President’s Fiscal Commission, while raising the standard deduction to $17,000. The worker making $21,000 who rents and has no kids would now pay no taxes, while the family a family of four with a mortgage making $50,000 now pay something like $350.

The main impact of such a change would probably fall on people who itemize so as to avoid any tax liability in the $75,000-$150,000 range. Those taxpayers who currently avoid tax entirely or pay a very small tax by reducing their taxable income to a small amount would see a tax bill in the thousands. Given that I make $45,000 and pay $2500 in taxes, it’s hard for me to see how that’s unfair.