Archive for April, 2017

What does a real tax cut mean for Americans?

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Today is the day that we hear of the tax cuts envisioned by President Trump.   For months, the former business icon touted the benefits of reducing taxes.   He has used both JFK and Ronald Reagan as examples of what a tax cut can do for an economy.

Never before in history has there been a better chance to make America great again.   With 2 trillion dollars sitting on the sidelines overseas, no sensible business leader would think of bringing that cash back to America with a 35% repatriation cost.   But what if that cost were to drop to 6.5%, as some in Congress are urging.

What about our corporate income tax rate of 35%, the highest in the world?   Is there any wonder that America isn’t luring companies and jobs to our homeland.   What if that rate were to drop from the highest in the world to 15%, which is among the lowest?

Many on the left and in the mainstream media are saying that this is a tax cut for millionaires.   Let me tell you a story about a lady who owns a company and makes about eighty thousand dollars per year.   Her corporate income tax is done on a Schedule C and attached to her 1040 tax return.  You know, the tax return you, I and millions of other working Americans fill out.    This is how MOST corporations and LLC’s are run.   Most are owned by sole proprietors.   Most do their business income on their personal taxes. When the government seizes a disproportionate amount of this income it penalizes families who are struggling to simply get by.

The first thing that needs done is a reduction of the corporate tax rate to 15%.    I’d prefer to see 12%, as they have in Ireland, but 15% is a decent start.   We also need to reduce the number of tax brackets.   While I would prefer to see a total elimination of income tax with the FairTax being used in its place, the reality is that isn’t going to happen.   So how about we cap income tax at 25%.   There is no reason on God’s green earth that the government is deserving of anything more than that.   The next tax bracket should be 10%.  The lowest bracket should be zero.

The untold dirty secret in America is that we are over taxed.   In many states with exorbitant taxes such as California, NY, Massachusetts, Ohio and Connecticut, it is not uncommon that people pay nearly sixty percent of their income in the form of some type of tax; federal, state, local, property, utility, RITA, sales or other.   This is simply unfair.   After all, we are a nation that, until 1913, didn’t even have an income tax!

So now we come to what is fair and how should it be funded.   Fair is simple.   A straightforward reduction of corporate and personal tax rates as outlined above.   The highest rate will be reserved for individuals making over $1 million per year.   The second tier will be those making over $250,000 per year and those making less pay no federal income tax.  As it stands now, the top 20% of wage earners now pay 80% of all federal income taxes anyway.

How is the deficit made up?  Quite simply, we start running America like a business.   If a government agency is adding to the deficit, then eliminate it.   There are any number of federal agencies that are outmoded, outdated or just not needed any longer.   Others could be outsourced to a more efficient and accountable private sector.

We need to stop giving benefits to illegal aliens to the tune of more than 100 billion per year in free education, healthcare, welfare and funding  to sanctuary cities.   Wouldn’t it be better to divert that funding to we, the people?

We could stop paying for other nation’s military and military education.   In 2014, that figure was $35.4 billion dollars.   Let’s bring that money home, too.

Then there is the $2 trillion dollars waiting to be repatriated to our nation.   When this money comes back, we will regain our status as the biggest economy on earth.  We will see economic growth and wage reductions never before witnessed in history.

This activity will generate much more in tax revenues than we are seeing today, albeit at a much lower rate.   Factories will expand, R&D will lead us to new innovation that will transform the way we live.   Jobs will be created in record numbers.  Prosperity will trickle down from top to bottom, with everyone living a better life.

What we know is that tax cuts work.   JFK, a Democrat, and Reagan, a Republican, both proved it.   For sure, many on the left are afraid of this approach with the mistaken belief that they need an underclass to ensure re-election.  This is simply not true.   People, by and large, are very smart.   They look at candidates and if one candidate is going to lift them up and the other wants to keep them down, they will, when properly educated and informed, make a decision for a better life.

This shouldn’t be a partisan issue, it should be an American issue.   We can fix so many ills in our society by simply lifting the masses just as a rising tide lifts all boats.   When people are working they have self esteem.   There is emphasis on improving schools and the money to do it.   There is less crime and fewer broken homes.   Cities like Chicago, Baltimore and Detroit could see a twenty first century renaissance.   This is the vision for America that can truly make us great again.

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Christopher Tidball is an executive claims consultant, author and speaker.  He is a former executive for a large multi-national corporation and has written many books including Kicked to the Curb: 20 Essential Rules For Coming Out On Top When Your Life Has Been Turned Upside Down and the recent thriller Swoop & Squat.  To learn more please visit http://www.christidball.com or email at chris@christidball.com

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April 26, 2017 at 8:12 am Leave a comment


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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at chris@christidball.com

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