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Kevin ClarkeDecember 20, 2017
House Speaker Paul Ryan of Wisconsin leaves the House Chamber after voting on the Republican tax bill on Dec. 19. Republicans muscled the most sweeping rewrite of the nation's tax laws in more than three decades through the House. (AP Photo/Jacquelyn Martin)House Speaker Paul Ryan of Wisconsin leaves the House Chamber after voting on the Republican tax bill on Dec. 19. Republicans muscled the most sweeping rewrite of the nation's tax laws in more than three decades through the House. (AP Photo/Jacquelyn Martin)

Congress has sent the Tax Cut and Jobs Act, a historic and controversial rewiring of the U.S. tax code, to the White House. President Trump will be hosting congressional leaders later today but it was not clear when he will actually sign the T.C.J.A. into law.

This G.O.P.-devised overhaul of U.S. tax laws delivers significant permanent tax cuts to corporations and the wealthiest Americans while offering smaller cuts for middle- and low-income families that are set to expire over the next decade. Under the plan approved today, the $1,000-per-child federal tax credit doubles to $2,000, with up to $1,400 available in I.R.S. refunds for families that owe little or no taxes.

Bishop Frank J. Dewane of Venice, Florida, chair of the U.S. Conference of Catholic Bishops’ Committee on Domestic Justice and Human Development, reiterated the conference’s concerns about the tax plan as the measure made it through a second House vote on Dec. 20. “As the president considers the tax bill before him,” he said, “we ask that he take into account the full consequences of its provisions and work with Congress to remedy them before signing a tax bill into law.”

The president, however, showed little reluctance to celebrate the plan as it now stands, turning to Twitter to hail the outcome of the House vote, his own efforts and the work of G.O.P. allies—including Senate Majority Leader Mitch McConnell of Kentucky, who had drawn the president’s wrath for the Senate’s inability this past summer to dismantle the health care law.

“Our team will go onto many more VICTORIES!” the president tweeted.

The vote was 224-201 and came hours after the Senate’s early-morning passage along party lines. It is the first major overhaul of the nation’s tax laws since 1986.

“We ask that [the president] take into account the full consequences of its provisions and work with Congress to remedy them before signing a tax bill into law.”

In his criticism, Bishop Dewane said the legislation “achieves some laudable things, like doubling the standard deduction, which will help many struggling families avoid tax liability, expanding the use of 529 education plans, and increasing the child tax credit.” But in the end he called the legislation “problematic,” concerned that it will have “dramatic negative consequences, particularly for those most in need.”

Bishop Dewane notes that the plan will eventually raise taxes on those with lower incomes “while simultaneously cutting taxes for the wealthy.” He adds, “The repeal of the personal exemption will cause larger families, including many in the middle class, to be financially worse off.”

The likelihood that the new tax code will quickly contribute to the nation’s ongoing, annual fiscal deficit has also concerned U.S. bishops. They worry that any revenue shortfall created by the tax revision “will be used as a basis to cut programs that help the poor and vulnerable toward stability.”

Bishop Dewane also charged that the plan may produce up to a $13 billion drop in annual charitable giving to nonprofits “that are relied upon to help those struggling on the margins,” diminishing the role of civil society in promoting the common good.

Simone Campbell, S.S.S., executive director of Network Lobby for Catholic Social Justice, did not mince words in deploring the tax overhaul in a statement issued today: “Congress rushed this bill through quickly to reward their wealthy friends and donors claiming it is a Christmas gift for working Americans. This is a lie.

“We know what will happen now that this tax plan is law: the budget shortfall created by outrageous tax cuts for the wealthiest will pressure Republicans in Congress to, once again, balance the budget on the backs of people in poverty. President Trump and Speaker Ryan have already called for cuts to vital life-saving programs like Medicaid, Medicare, Social Security, and food programs.”

Sister Campbell added, “As people of faith, we advocate for reasonable revenue for responsible programs. Responsible programs are lifelines for families and individuals struggling to make ends meet…. Instead of securing the reasonable revenue our nation needs, this bill was written by and for corporate lobbyists and donors full of self-interest with no regard for the common good.”

“This bill was written by and for corporate lobbyists and donors full of self-interest with no regard for the common good,” Sister Simone Campbell said.

In a letter to Congress, Dominican Sister Donna Markham, president and CEO of Catholic Charities USA, wrote: "As you move forward, we urge you to reject efforts to use the deficit created by this bill as a pretext for even greater cuts to programs for low-income communities" and called on Congress to "address the shortcomings in this bill and recommit yourselves to the bipartisan solutions needed to lift people out of poverty."

The leadership of the anti-hunger advocates Bread for the World also expressed displeasure with the House vote this morning. “This tax bill is part of a one-two punch,” said the Rev. David Beckmann, president of Bread for the World. “President Trump and congressional leaders have already announced plans to follow this tax cut, mainly for high-income people, with a big push to cut more than $2 trillion from social programs for low- and middle-income people.”

Mr. Beckmann agreed with the U.S. bishops that the proposal’s additional projected federal deficit of $1.5 trillion to $2.2 trillion will likely be used by Congress as a future rationalization for deep cuts to Medicaid, nutrition assistance “and other crucial programs that keep people out of hunger and poverty.”

“Tax cuts for corporations and high-income people are not the best way to expand job opportunities for low- and middle-income people,” Mr. Beckmann added, alluding to the president’s frequent justification of the tax plan as an assistance to working and middle-class families.

An analysis by the Tax Policy Center of the Brookings and Urban Institutes found that the T.C.J.A. would reduce taxes by about $1,600 per family on average in 2018, with the biggest benefit going to households making between $308,000 and $733,000. The center reports that middle-income taxpayers would pay about $900 less than under current law, about 1.6 percent of after-tax income, while the lowest income households would get an even more modest tax cut compared to current law.

By contrast, the highest-income one percent of households, who earn $733,000 and up, would get an average tax cut of roughly $50,000, or 3.4 percent of their after-tax income. Those in the top 0.1 percent, who make $3.4 million or more next year, would get an average tax cut of about $190,000, or 2.7 percent of their after-tax income.

In his summary of the effects of the bill, Tax Policy Center senior fellow Howard Gleckman wrote: “While the details of the T.C.J.A. have changed throughout the congressional debate, the basic story of the bill has remained the same since it was first introduced in early November. Most households would get a tax cut at first, with the biggest benefits going to those with the highest incomes. After 2025, when nearly all of the bill’s individual income tax provisions are due to expire, only high-income people would get a meaningful tax cut.”

After failing repeatedly to take down the 2010 Affordable Care Act over the summer, Senate Republicans added a measure to the plan approved today that could prove fatal to Obamacare, repealing the requirement that all Americans carry health insurance or face an annual tax penalty. The provision will save the federal government $300 billion in subsidies over the next decade, but could leave as many as 13 million people without health insurance.

The plan also includes an amendment that allows oil drilling in the Arctic National Wildlife Refuge. Other last-minute additions were roundly criticized as barely concealed sops to members of Congress themselves.

The legislation passed largely along party lines in both chambers, with Democrats in both the Senate and House unanimously lining up against it. Eleven of the 12 House Republicans voting against the bill were from the high tax states of California, New Jersey and New York. They cited concerns that constituents would see their overall tax liability rise because of limits on the state and local tax, or SALT, deductions contained in the bill.

The bill caps the SALT deduction at $10,000 and eliminates it altogether in eight years.

“Capping this deduction, which has been part of the U.S. tax code since 1913, will increase taxes and harm the already unaffordable housing market in my district,” Rep. Dan Donovan, a Republican from New York , said in a statement after the Dec. 19 vote.

Making the rounds of morning television news shows today, House Speaker Paul Ryan, a Republican from Wisconsin acknowledged that “nobody knows” if the sweeping tax cuts Congress is enacting will produce enough economic growth to fend off soaring federal deficits. Previously considered a deficit hawk, he suggested it was a risk that Republicans are willing to take. He tells NBC's "Today" show the United States has not had a 3 percent annual growth rate since the Great Recession of 2008.

“What we’re trying to do here is give relief to hard-working families,” Mr. Ryan said. “We need fast economic growth. We need help for people living paycheck to paycheck.”

Before the first House vote, Rep. Nancy Pelosi, the Democratic leader from California, spent several minutes criticizing the tax package, citing Pope Benedict XVI and the U.S. Conference of Catholic Bishops. Standing in front of a poster quoting a letter to Congress from the bishops, Pelosi charged that the bill was an example of “moral obscenity and unrepentant greed.”

“As the U.S. Conference of Catholic Bishops said early on, here it is, ‘This proposal appears to be the first federal income tax modification in American history that will raise income taxes on the working poor while simultaneously providing a large tax cut to the wealthy.’”

The article includes reporting from AP and CNS.

Comments are automatically closed two weeks after an article's initial publication. See our comments policy for more.
JR Cosgrove
7 years ago

Hurrah and Hallelujah, the tax changes have passed.

One source said 95% will receive a tax cut and anyone who says it is bad because it will go up in 10 years is being disingenuous at best. The reason it wasn't made permanent on individuals is that Democrats want peoples's taxes to increase in 10 years. Given Senate rules, the individual taxes can only last for 10 years.

Now we will see what changes on business behavior the tax bill will have. Will they invest? Will they increase dividends? Will foreign business invest in the US because of lower taxes. All will increase jobs and wages if they happen. As Larry Kudlow said, the "proof will be in the pudding." This will be a real test of economic behavior and the Republicans could be wrong. We will see.

Also let's get rid of this mantra that these are tax cuts for the rich. Most of the rich vote for Democrats so anyone who suggests these tax cuts are to appease the rich is spreading a false narrative. Why reward your enemy? Why do the articles in America, continually use this objection?

By the way, I am one who will probably pay more taxes because I live in suburban New York City and have extremely high property taxes. Classroom teachers make nearly $150,000 year in our area and require sky high school taxes to pay for them.

But Hallelujah!!!!!!! Americans and America, the country, will win. Now why cannot America, the magazine, see that and why can't the bishops they invoke see that too?

Gail Sockwell-Thompson
7 years ago

J, given that not one Democrat voted for the bill, your comment is disingenuous at best. Your disdain for the disenfranchised pours from every comment you make. Reading your comments is like watching a bad movie, I would laugh if they wasn’t so pathetically cruel.

JR Cosgrove
7 years ago

Two things

First

J, given that not one Democrat voted for the bill, your comment is disingenuous at best. Your disdain for the disenfranchised pours from every comment you make.

Are you against people doing better financially and having better jobs? It sounds that way. If no then maybe your quarrel should be with the Democrats who did not support the legislation that would benefit workers. Lots of Democratic voters will benefit from this bill. For example,

AT&T said in a press release today that it would give more than 200,000 of its U.S. workers who are union members a special bonus of $1,000.

Fifth Third Bank will pay more than 13,500 employees a bonus and raise the minimum wage of its workforce to $15 an hour after the passage of the Republican tax plan that will cut the bank's corporate tax rate.

Wells Fargo said it would be boosting its minimum wage for employees to $15 an hour, which was prompted by the tax plan. The San Francisco-based bank also said it would target $400 million in donations to community and nonprofit organizations next year.

Comcast announced that they will give $1,000 bonuses to over 100,000 "eligible frontline and non-executive employees" & invest $50 billion over the next five years in infrastructure "based on the passage of tax reform."

Boeing announced an “immediate commitment” to investing an additional $300 million in three areas that will directly benefit their employees:

Sounds like lots of normal Democratic voters are being considered as part of this legislation and its expected secondary and tertiary effects. This is just today.

Second

Reading your comments is like watching a bad movie, I would laugh if they wasn’t so pathetically cruel.

Your use of ad hominems says that I am right. If I was wrong you would be presenting facts not personal disparagement. So essentially you are saying my comments are correct. I appreciate that even if it is sort of back door.

Gail Sockwell-Thompson
7 years ago

J, given that not one Democrat voted for the bill, your comment is disingenuous at best. Your disdain for the disenfranchised pours from every comment you make. Reading your comments is like watching a bad movie, I would laugh if they wasn’t so pathetically cruel.

Dionys Murphy
7 years ago

"One source said 95%" - Many sources make claims that all economists are saying are outright lies. This includes the President and the Congress that supports this bill. They are simply outright lying about what it will do for people. The vast majority of the middle class will see a raise in taxes or little to no benefit.

The mantra that these are tax cuts for the rich is incorrect. They are tax cuts for the rich, for corporations and for those who can afford to take advantage of all the pass through loopholes (the wealthy).
"Classroom teachers make nearly $150,000 year in our area" - You are lying. The average NYC teacher salary is $54,000/yr.

Stuart Meisenzahl
7 years ago

Mr Murphy
Read what Mr. Cosgrove wrote. He said he lives in a suburb of NYC where classroom teachers make nearly $150,000.
You have promptly asserted salary statistics not from Mr Cosgrove's unnamed suburb but rather from NYC itself..
This wouldn't deserve mention except for your gleeful use of your own distortion to label Mr Cosgrove a liar!

Dionys Murphy
6 years 12 months ago

"Read what Mr. Cosgrove wrote. He said he lives in a suburb of NYC where classroom teachers make nearly $150,000." - Then the burden of proof is in his court. It's unlikely, given that the average salary in NYC. I lived in the wealthiest part of NY, highest taxes where teachers were paid at the very high end and they didn't make anything close to this number he's asserting. If the average is $54,000, the assertion that the "classroom teachers make nearly $150,000" is either an intentional lie or a misrepresentation of reality. We will await his proof that the classroom teachers make that amount, even though anyone who has teachers for family knows this is a impossibility often spread by right-wingers who continue to lie, lie, lie and hope that they can just get away with their delusional lies.

Dionys Murphy
6 years 12 months ago

In fact, here you go. LIAR:
"Suburban communities have the highest salary rates at all levels of experience, with a median rate of $55,706 for new teachers with a Master's degree, rising to a median rate of $98,788 for teachers with a Master's plus 20 years of experience, a 77% increase."

Stuart Meisenzahl
6 years 12 months ago

Mr. Murphy
Nine hours before your above post, Mr. Cosgrove had already provided you with the information you subsequently demanded he produce for the Westchester NY County Area (see below). I suggest you start checking some of the Official New York State websites for teachers pay ranges and pension benefits before you continue to so freely use the word "liar". Teachers salaries in NY vary widely with Mr Cisgrove's area being among the very highest.

JR Cosgrove
7 years ago

Many sources make claims

It was the Washington Post, a well noted pro-Republican/pro-Trump publication. They published charts where one could enter salaries and deductions and number of children and the change in taxes appeared. Are you calling the Washington Post liars? Actually you may have a good claim there since the Washington Post has been caught in a lot of fake news stories.

They are simply outright lying about what it will do for people.

It would be interesting to know where you get your information. It seems not to be based on accurate reports. But the real truth will be in the paychecks of the person affected when they will see the tax changes for their level of income, marital status and number of dependents. This will happen around February.

"Classroom teachers make nearly $150,000 year in our area" - You are lying

Let's take a typical middle class school district in Westchester, Harrison NY. The median teacher salary is $114,000 and a teacher with 25 years experience makes over $130,000. This does not include benefits which are medical and retirement which adds over 20% to their salary. Such a person is in their late 40's and by retirement will make over $150,000 just in salary. Their pension will be based on their retirement level salary.

Take Scarsdale which is on the upper end of the pay and the median salary is $135,000 not including benefits. This median salary includes beginning teachers. The top end just for a salary of a teacher is over $150,000 not including benefits.

Next is Yonkers which is on the low end socio-economically. Their median salary is $119,000. I know a teacher there who makes $132,000 and is in his late 40's. Again not including benefits.

Are you calling published information from the state of New York, lies?

Also I know some other local teachers who have told me how much they make.

Chuck Kotlarz
6 years 12 months ago

As I recall, Mr. Cosgrove’s Westchester County several years back had the seventh highest median income in the U.S. Westchester county's median property tax ranked number one in 2013 at $13,000.

JOSEPH D'ANNA
7 years ago

For seven years Lying Paul Ryan also said that he had a great replacement for the ACA. Based on the totality of Republican policies, including human rights, the environment, the welfare of the American people and world peace, Ryan is not a Christian or a Catholic. Indeed the use of the terms "Christian Republican" or "Republican Christian" is an oxymoron.

Vincent Gaglione
7 years ago

The effects of the tax legislation won’t be known for several years. Most reputable economists consider the predictions of a booming national economy extravagant over the long term. The companies offering year-end bonuses to their workers in support of the legislation apparently are not offering salary increases, which Republican legislators claim would be an outcome.

What cannot be contradicted by the supporters of the tax legislation are the stated comments of the Speaker of the House Ryan and other Republicans that there will definitely be an effort to reduce spending on Medicare, Social Security and Medicaid. In fact, in the proposed annual budget passed by the House, such cuts are indicated as well.

The question to be asked is how, if the funding of PERMANENT tax relief to corporations and the wealthy can be passed without offsets, the PERMANENT funding of social safety net programs must not be funded without such offsets?

Finally, I got a real kick out of reading the complaints about local teacher salaries here in Westchester, NY. In a state in which teaching credentials and standards require a master’s degree and continual ongoing training, the salaries are far below what most individuals in hedge funds, investment banks, and the self-employed earn without such requirements. And bonuses are prohibited! If the judgment is that only producers of wealth should be compensated well, then teachers, librarians, professors, artists, etc. know where we stand in this Republican world. And if the critics really believe the old canard that “those who can’t do, teach,” I’d gladly subsidize their salaries for a week in the New York City classrooms where I taught, assuming they could meet the credentials to do the job. While the classroom conditions in some Westchester districts might be far different from my own experiences (for which most citizens gladly get well taxed), the work that the teachers do is not recompensed at the level which they contribute to the children or the property values of the communities in which they work!

JR Cosgrove
7 years ago

Mr. Gaglione

A couple comments.

Who complained about teachers salaries. I certainly didn't. My daughter taught in Westchester for several years and now teaches elsewhere. But I'm glad you confirmed what I said but didn't see you telling Mr. Murphy that he should not have called me a liar.

Second, some corporations did raise salaries. So you should correct your comment and apologize for misrepresenting things.

It was only day zero so what would one expect so quickly. However, several corporations did respond almost immediately. Let's wait and see. It may not be as successful as Republicans say it will be but it could be. The proof will be in the pudding.

Vincent Gaglione
6 years 12 months ago

Mr. Cosgrove,

You wrote: "Classroom teachers make nearly $150,000 year in our area and require sky high school taxes to pay for them. " Usually the attachment of those two facts, one with the adjective "sky high" and without the remark "which I gladly pay and support," implies criticism in this age of anti-tax sentiment. You'll have to be more clear the next time you write such.

I haven't read of a single company that raised salaries on the heels of the signing of the tax legislation. Name what you know. No need for an apology on my part. I don't claim omniscience on any topic. And I have my own cynical opinions why AT&T and Wells Fargo gave bonuses on the heels of the signing. Anyone reading newspapers knows why they probably did it for the purposes of ingratiation with the administration!

As you say the proof will be in the pudding. For my part the pudding seemingly has little firmness and is very goopy. But we'll see, won't we?

JR Cosgrove
6 years 12 months ago

I used the term "sky high" to illustrate a point. Suburban New York City teacher salaries are the highest public teaching salaries on the planet by far and Westchester county has the highest. They are the highest of the high or "sky high." And because of this Westchester county has the highest property taxes in the United States. People in these areas would be most affected by the limit on local tax deductions.

I did indicate I was willing to pay higher taxes so most of the rest of the United States can get a better deal.

I listed two companies that raised wages. Maybe you still haven't read what I wrote. Two companies raised their minimum wages that they will pay and anyone involved in compensation knows that this will put upward pressure on other wages.

By the way I did notice that you did not respond even once to Mr Murphy calling me a liar. And you know that I am correct. But I appreciate that you validated what I claimed by not disputing it. I doubt Mr. Murphy understands that.

As an addendum, I do think teachers salaries in New York are too generous and it is causing problems, especially paying for pensions. Why don't you explain for Mr. Murphy what a typical retired teacher from a Westchester school district gets paid each year. There are over 3,000 retired teachers in New York that are paid over $100,000 a year in retirement pay plus they do not pay for health benefits or pay NY state taxes. The expenses for just these 3,000 individuals is over $354 million. Each of these individual's retirement pay is on line and available to anyone who looks.

There are over 550 public educators in New York that have higher salaries than cabinet secretaries in the federal government. That is they make more than $200,000 a year (not including benefits). These are not teachers but superintendents and principles.

While parts of New York are a little more expensive than the rest of the US, it is not that more expensive to live here except for the taxes which make up a significant part of one's expenses. A big Mac and a Wendy's Grilled Chicken cost about the same here as in Florida. My son who lives in San Francisco was amazed at how lower the super market prices were in mid Westchester compared to where he lives in California. It is the local taxes that are "sky high" here.

If this sounds like I am complaining, so be it. I have lived here for over 30 years and am just pointing out the obvious. I have seen no indication that the public school teaching in Westchester is any better than many other places in the US.

Here is something I will complain about. In the last 15 years several hundred tenured teachers have lost their jobs due to budget restrictions. A tenured teacher cannot be fired except for really extraordinary circumstances but can be eliminated if their position is eliminated. Thousands of teacher positions in New York have been eliminated because of these budget restrictions and class sizes were increased as a result. If the teachers took a 10% cut from their sky high salaries, all these positions could have been funded and not eliminated. But they voted for their own higher salaries and screwed their colleagues lower down on the totem pole, usually junior teachers and this affected the students who were now in larger classes.

Vincent Gaglione
6 years 12 months ago

Mr. Cosgrove,

I presume that you lived so long in a Westchester community where there were "sky high" school taxes because they advantaged you or your progeny in some form or another. Perhaps now your circumstances have changed and your opinions on the cost of living have changed as well. That is your prerogative. However, I reassert my original opinion, the use of the term "sky high" implies discontent with the tax situation.

I read your concerns about the layoffs of tenured teaching staff with equal discontent. However, from what I read and know of local communities in Westchester, the layoffs are either the result of insufficient economic planning by educational administrations or decisions to reverse curriculum and instruction initiatives. In communities where housing values are directly affected by the quality of school systems, a fact of Westchester life which I presume that you took advantage of, it seems to me that the taxpayers should be more willing to up their ante to avoid the layoffs. Having reaped the advantages, there should be some responsibility to maintain those advantages to others and not skip out ahead on the deal.

Again, just my opinions about which you probably disagree.

Vincent Gaglione
6 years 12 months ago

Mr. Cosgrove,

OOPS, my PS: a sincere merry Christmas and may we all share the peace of Christ!

JR Cosgrove
6 years 12 months ago

Mr. Gaglione,

I presume that you lived so long in a Westchester community where there were "sky high" school taxes because they advantaged you or your progeny in some form or another.

I cannot think of one advantage. If anything they impeded my family. But I rarely thought about it one way or the other. I only brought it up because we live in an area where many will be paying higher taxes because of the new tax legislation, which I applaud. I will probably be one of those paying higher taxes. I will have to wait to see the actual calculations sometime in early 2019.

My children went to Catholic schools so we never took advantage of public schools in Westchester. The closest I got to one is that I attended a night session by a local broker at White Plains HS on how to buy a house. I have seen the fruit of many public schools through knowing teachers and the children who attended them. The teachers were varied with some very good people to some I would never want near my children. As I have said, I have seen nothing special as a result of the highest teaching salaries on the planet. But have learned how the teachers unions have managed to get these sky high salaries. A good friend was a teacher in a local elementary school. I have sat at dinner several times with her and her colleagues listening to them talk about their life experiences as teachers. My daughter was a teacher in Westchester till she had to teach elsewhere after her children were born. I have two other good friends who teach or have taught in Westchester public schools.

We live here not because of anything attractive about Westchester but because it was an easy commute to Grand Central near where our jobs were. We now own a small business that could be anywhere in the US. I continue to live here because of family and other personal reasons but not because of anything local government provides. I cannot think of anything positive the higher proprty taxes provides that keeps us here or has given us over the years. If I was going to rank Westchester amongst the various places I am familiar with, it would be near the bottom. My life here has been a positive one but it is fatuous to say it had anything to do with what the local government especially what the sky high school taxes have provided.

This is a silly discussion which started when I pointed out that I lived in one of small areas that will be hit negatively by the new tax legislation. But if anything I have not complained about this but applauded what has been done for the country by this legislation. It is a much better Christmas for everyone even those who will be paying much higher taxes, the dreaded rich. They hopefully, will get a better country as their present.

Merry Christmas and enjoy your holidays.

Michael Barberi
6 years 12 months ago

I have not seen any accurate, comprehensive and balanced analysis of this tax law. All I read and hear are a lot of hyperbole and specious assertions.

Let's take a family making more than $733,000 a year. The author argues that they will get a tax cut of 3.4% of after tax income...full stop. However, people making more than $733,000 often live in very expensive houses. Did the author take into consideration that fact that SALT will be limited to $10,000? Hence, while the highest tax rate will be 37%, or a 2.6% reduction from the current 39.6%, people making more than $733,000 will lose most of their SALT deductions. For example, in many areas of New Jersey, a person making more than $733,000 may well live in a house with an assessed valuation of $2,000,000 and will pay about $45,000 in property taxes alone, not to mention state taxes. In Texas, this person will pay about $38,000 in property taxes and in Ohio $28,000.

There are a lot of details that need to be taken into consideration before one can draw conclusions. The fact is that effective February 2018 most people will see an increase in their pay checks because of lower withholding rates. The average middle class tax payer in the U.S. filing jointly will see a reduction of about $2,000 in their 2018 Federal taxes.

I would have liked to see higher tax rates on families making more than $750,000 and those making more than $5 million with greater tax benefits for the middle class. Nevertheless, I believe this overall tax law is a good one, but not perfect.

Charles Erlinger
6 years 12 months ago

In the economic and financial forecasting models that I have used or was exposed to in my working years, the assumption inputs were always more determinative of the quantitative outcome than were the historical data. And, in any case, the resultant outcomes were always only of mild interest if all they did was to calculate the probabilistic confidence interval of a future trend line. What everybody always wanted to forecast was a change in the trend, in timing, direction and magnitude. Here demographics, not tax rates, seemed to be more useful. Also, those were the days before behavioral economics was as developed as it is now. But I doubt that the incorporation of behavioral economics factors into forecasting models change the nature of the problem to the extent that assumptions are much less determinative.

Claims by politicians about the behavioral impacts of tax law changes tend simply to be assertions based on previously held ideology, having only a very distant relationship to the scientific aspects of economics, to the extent that there are such aspects. They are the products of economism, not economics, in my opinion, and the likelihood of unintended consequences is as great as the likelihood of intended ones,

Stuart Meisenzahl
6 years 12 months ago

Bishop Dewane is concerned that charitable giving will suffer a loss of $13 billion because of the tax bill. Especially since NGO charities provide so much to the social safety net .
If you check out where these numbers and concerns originated look to an NPR interview of United Way CEO Brian Gallagher on December 3, 2017. Mr Gallagher postulates that because the doubling of the Standard Deduction to $24,000 is so good that more people will elect to use it rather than itemize deductions. And without the incentive to itemize charitable contributions will drop.
Now there is an ethical conundrum :the tax cut is so good for the Middle Class that it is bad for charities!
I guess I am puzzled as to why this is a valid argument in an essay whose thesis is that the Tax Bill is not good for the Middle Class. It actually argues on this point that the tax bill is too good to the Middle Class!.

By the way Mr. Gallagher expands on the need for the NGO Charities because: ..." the services...[delivered by] the non profits are much more efficient than government services". An interesting observation from the inside.

Further the entire argument that the tax bill is bad for the Middle Class because the individual cuts expire in 2025 is just absurd. The argument is that a taxpayer should not get a @ $2,000 +/- per year benefit for seven or eight years because it will stop. Really, a taxpayer should not get some @$16,000 +/-because it won't be more? (The numbers used are examples)
As to the expiration itself: I would like every Democratic Senator who would not vote in 2025 to extend the those cuts to raise their hand. Seeing none, I think you can be assured the cuts will be extended just as the expiring Bush tax cuts were extended by the Democrats in 2010

It should also be noted that ALL the individual tax cuts, including for the "rich" expire. This article leaves intentionally leaves the impression that only the Middle Class cuts expire! Even the increase in the estate tax limits reverts to current rates. Only the Corporate cuts do not expire.

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Previously serving as Pope Benedict XVI’s private secretary and later as prefect of the Papal Household, Archbishop Georg Gänswein was sent home to Germany by Pope Francis in June 2023—“a decision that had to be digested,” he said.
OSV NewsDecember 18, 2024
A Homily for the Fourth Sunday of Advent, by Father Terrance Klein
Terrance KleinDecember 18, 2024