A December analysis by the Institute on Taxation and Economic Policy of the GOP tax bill (for California residents) estimated that 88 percent of those in the $27,000 to $76,500 income bracket will see a tax cut while 38 percent of those earning over $878,000 will see a tax hike.
A 2 percent tax rate decrease, a doubling of the standard deduction, and an increase in the child tax credit will benefit the lower to middle income groups while the inability to completely deduct state and local taxes and a limit on the mortgage rate deduction will offset the rate decrease for many of the highest income earners, most of whom itemize.
The wealthiest 20 percent collectively pay 80 percent of the total federal income tax, a huge amount. A 2 percent across the board tax cut automatically channels 50 percent or more of the savings in absolute dollars to that small cohort.
Encouraged by the decrease in the corporate tax rate, several large corporations announced plans to expand their operations,increase their minimum wage and send bonus checks to their employees. On balance, the tax bill will strengthen the nation’s economy and benefit most of its citizens. Only liberals obsessed with class envy see America “approaching its darkest hour” because of it.
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Michael Freeman, Sanger