Will Trump’s tax plan help or hurt the middle class?
Nov 6, 2017, 6:11 AM | Updated: 4:26 pm
The GOP’s tax plan, The Tax Cuts and Jobs Act, reduced the corporate tax rate to 25 percent. (AP)
(AP)
Will President Trump’s proposed tax bill finally be a break for middle-class families, or will it serve only to help the top one percent of Americans grow even wealthier?
Congress member Adam Smith (D-WA) and KIRO Radio’s Dori Monson agree debt is a major crisis faced by the United States, but the two men fall on opposite sides of the issue in their debate about whether the GOP’s new tax bill can be a boost for the economy and the nation’s workers.
Dori’s Seattle tax plan for the homeless crisis
Rep. Smith points out that economic growth isn’t always spurred by lowering taxes.
“In the early 90s, we raised taxes repeatedly,” Smith said. “George H.W. Bush famously raised them after saying, ‘No new taxes.’ Bill Clinton raised them obviously as part of his 1993 budget, and we had the largest economic growth that we’ve had since World War II in the four years that followed all of that.”
The member of Congress added that the lack of economic growth started under George W. Bush’s presidency, following his administration’s decision to cut taxes in 2001 and 2003. This is the world, Smith argued, that former president Barack Obama inherited in 2008 — a nation that faced $30 trillion in unsecured debt.
The GOP’s tax plan, The Tax Cuts and Jobs Act, proposes several changes to the current tax system, including a permanent cut of the corporate tax rate from 35 to 20 percent.
For Smith, this doesn’t necessarily mean a boost for the economy – he argues the effective corporate tax rate has already been below 20 percent thanks to deductions and write-offs – nor does it stand to help revenue.
“The number one biggest concern is that this is going to reduce revenue over the next ten years by $1.5 trillion,” Smith said. “We are $20 trillion in debt, the deficit from 2017 was, ironically, $666 billion, and it is projected to go up. So we are now going to take $1.5 trillion out of that…
“We have never had a greater disparity in wealth. The top one percent … have never had a higher percentage of the money in this country in the history of this country … we think by giving them more, we’re going to grow the economy, and I just don’t agree with that.”
KIRO Radio’s Dori Monson couldn’t disagree more. He argued debt is the biggest crisis facing the U.S., and cutting regulation can give the economy the boost it needs.
“The only way we’re going to get out of (debt) is to grow our way out of it,” Monson said.
And as to whether the bill helps average middle-class workers, it seems that for Monson, every little bit helps. In Seattle, where families are facing huge spikes in car tabs fees and taxes for growing transit development, taking home even just $1,000 is reason enough to look into the bill.
“I see all these things that are just killing families,” Monson said, “from their insurance premiums to their car tabs. And here’s something that says for a $50,000 family, they’ll get $1,300 in tax breaks. And the one time we hear something where the government is going to actually allow people to keep a little more of their money instead of taking it, that’s something I’m really passionate about and something I’m consistent about. And I’m sorry you think I’m playing games with that, but it’s very consistent with my worldview and something I talk about every day on this show.”
Listen to the entire debate embedded above. Or click here.
Update: Tax debate
One item left lingering from Dori and Rep. Smith’s discussion was how many people in Washington actually itemize deductions on their taxes. Smith followed up on Monday with information from the Pew Charitable Trusts that states 30.3 percent of Washington tax payers itemize their deductions.
Smith also tweeted this information for constituents.
Also, all WA residents will now be unable to deduct state & local taxes. Call my office at 202.225.8901 to discuss your questions further
— Rep. Adam Smith (@RepAdamSmith) November 3, 2017
Following this tweet, Dori points out that 24 percent of tax payers itemize their sales taxes in the state. Even though a tax payer may itemize sales tax, Dori argues that the $12,000 to $24,000 standard deduction increase cancels that out.
Listen to Dori and Rep. Smith further dive into the details.
