The liberals ignore the truth about tax cuts

My wife called me at work not long after President Trump signed the Republican tax bill into law. She asked me if we would be getting a tax cut or a tax hike. It was an interesting question, and one for which I did not have an answer. There are myriad tax calculators that have popped up since the tax bill debate began. I hadn’t used any of them.

I’m not faulting you if you have. It’s only natural to be curious about how such a massive overhaul will affect you. The question is does that determine your support or opposition to the new law? It shouldn’t.

There’s a fundamental question that needs to be asked. Does our tax system maximize our economy, or is it a drag on economic prosperity? How it affects each of us personally is inconsequential. The answer to that question is this tax law goes a long way in stimulating an economy that has been, until Trump won the presidential election, sluggish. The stimulation since the election has been running on anticipation. That anticipation only takes an economy so far until hope turns to disappointment and the economy falters again.

Now the economy has something concrete to believe in. Companies like AT&T and Comcast immediately announced rank-and-file end-of-the-year bonuses. Other companies launched plans for massive expansion and infusion of cash into the economy.

Try as they may to pit all classes against the rich, marketwatch.com posted graphs that told the true story. The people who would be paying the largest percentage of tax hikes were those making more than $1 million per year. The vast majority of taxpayers, even the rich, would get a tax cut.

Of course, it’s the rich on whom the liberals always concentrate. What these same liberals don’t tell you is the rich pay most of the taxes. They lament the fact that those making $20,000 or less get the smallest tax cut. Most of those people don’t pay taxes at all anyway. Hard to give someone a tax break when they don’t pay taxes. 

What really grinds the gears of the leftists is the corporate tax reduction. That corporate tax is cut from 35 percent to 21 percent. They drone on about the “rich corporations” like they’re some individual fat cat who’s going to skate. Taxes are simply another business expense to a corporation. Cut taxes and you cut expenses. Cut expenses and chances are you’ll see prices go down. Liberals seem to understand this concept when it comes to gasoline costs. They talk about how higher prices at the pump will translate into higher prices at the grocery store. The same principle applies to the high cost of taxes.

But let’s assume the liberals are right and these evil corporations will simply take that tax break and give it to their rich CEOs. Those CEOs will pay taxes on that money at a rate of 37 percent in addition to the corporate rate of 21 percent. Liberals should be happy, but, as we know, they seldom are. And as we’ve seen, corporations are already passing along the windfall to their employees and reinvesting in the company. That should convert even the most ardent skeptic. Only those who are purely political can witness that and remain unswayed.

How does the new GOP tax law affect you personally? Whether you get a direct tax cut or not is inconsequential. What matters is a rising tide lifts all boats. No matter what floats your boat politically this tax cut will be good for us all.

Phil Valentine is the host of the award-winning, nationally syndicated talk radio show, The Phil Valentine Show.

GOP tax plan designed to stimulate voters more than economy

The press is having a field day with something called the Paradise Papers. Maybe you’ve heard of it. It’s a pile of documents released by the International Consortium of Investigative Journalists (ICIJ). They detail the business dealings of celebrities like Bono and the Queen of England, and companies like Apple and Nike. Even U.S. Commerce Secretary Wilbur Ross. They show nothing illegal, really, just how the rich and famous move their money around to avoid paying too much in taxes.

The media are treating this like a scandal when it’s actually a wake-up call. This is why tax reform is so badly needed here in the United States. I’ve regaled you with the stats from the IRS, like the top five percent of wage-earners paying nearly 60 percent of the income tax. The House Republican tax legislation takes some steps in the right direction but it still leaves the basic problem unresolved. They won’t tell you what that is so I will. The rich pay way too much in taxes. They’re the ones who need a tax break, not the middle class.

The middle class now pays somewhere around eight percent of their income in taxes. That’s set to go to around five percent if the House Republicans and President Trump get their way. They always target the middle class for tax cuts because there’s more of them. They just don’t need another tax cut.

If the objective is really to stimulate the economy then you’re going to have to allow the filthy rich to keep more of their money and spend it in the economy. That means the dreaded one-percenters. I know, people don’t like to hear that, but it’s true. The rich are overtaxed and the middle class are under-taxed. The poor and working poor aren’t taxed at all. In fact, most of them get money from the government through the Earned Income Tax Credit that they never paid in.

Why aren’t the folks in Washington telling you this? Because they’re cowards. Cowards and panderers. They don’t really see this as a vehicle to stimulate the economy. They see it as a way to buy votes, not dissimilar from the way the Democrats operate. So, why aren’t the Democrats going for it? Simply because they didn’t think of it first. If this were their idea they’d be all over it.

The only thing that remotely comes close to doing what we need done is lowering the corporate rate from 35 percent to 20 percent. Mark my words, that’s the one thing that will probably not survive intact when the dust settles. It’s too tempting, even for the Republicans, to punish the very corporations that create the jobs.

And then there’s the SALT issue. That stands for state and local taxes. The current GOP plan would severely limit how much high-tax states can deduct those taxes. That’s raised the ire of Republicans and Democrats in high-tax states. Rep. Diane Black, chairman of the House Budget Committee and member of the tax-writing Ways and Means Committee pointed out to me that it’s wrong for the rest of us to subsidize high-tax states. She has a great point. Why is it fair for anyone to claw back some of the taxes they pay their own states through deductions to their federal income tax? The fact that some states tax their people to death is not the fault of the rest of us.

Getting rid of many of the deductions is the right move. Continuing to soak the rich is the wrong move.

Phil Valentine is the host of the award-winning, nationally syndicated talk radio show, The Phil Valentine Show.

The 'gun culture' is not the problem

I continue to cheer on my birth state from the sidelines as the Republicans dismantle liberalism brick by brick.  North Carolina has a Republican governor and a Republican state legislature and state senate.  So far they have taken aim at the state income tax, implementing a flat tax rather than a tiered tax that punished people the more they earned.  They ended teacher tenure in public schools that had historically protected teachers just because they had been on the job longer.  They instituted voter ID which will make elections more honest, despite the insane contention from the left that it will keep minorities from voting.

But a little-noticed law goes into effect this week.  It prohibits law enforcement from destroying unclaimed firearms and guns acquired through one of those silly gun buy-back programs.  Now they’re required to either donate the guns, keep them or sell them to licensed firearms dealers unless the guns are damaged or missing serial numbers.  Heretofore, law enforcement agencies would destroy millions of dollars worth of guns under the guise of keeping the streets safer.  Of course, anyone who has studied the issue knows that it’s not the guns.

Even a new Harvard University study concluded that more guns do not mean more violence.  The study looked at gun ownership worldwide and found that America’s relatively high murder rate along with its relatively high gun ownership rate was an anomaly.  For example, Luxembourg bans handguns but their murder rate is nine times higher than Germany’s where gun ownership is 30,000 times higher.  The Soviet Union managed to strip its citizenry of their guns which continued after the Iron Curtain fell.  By the 1990s their murder rate was three times that of the United States despite their ban on guns.

In fact, the Harvard study found more guns equated to less crime.  Here’s the money quote from the study: “Where firearms are most dense violent crime rates are lowest, and where guns are least dense violent crime rates are highest.”

Of course, that’s common sense for those of us who understand why the founding fathers included the Second Amendment in the Bill of Rights. 

What’s ironic is President Obama signed 23 Executive Actions in the wake of the Newtown, CT shooting and one was a study from the CDC to research the causes and prevention of gun violence.  In the process they blew out of the water many of the preconceived notions of the gun grabbers.

One thing the CDC study found was “unintentional firearm-related deaths have steadily declined during the past century.”  They concluded that less than one percent of all unintentional fatalities today are due to firearms.  So much for the old “having a gun in the house is dangerous” argument.

The president’s own commissioned study also found that guns are used far more for defensive purposes than for murder.  “Defensive use of guns by crime victims is a common occurrence,” they concluded.   “Almost all national survey estimates indicate that defensive gun uses by victims are at least as common as offensive uses by criminals, with estimates of annual uses ranging from about 500,000 to more than 3 million per year, in the context of about 300,000 violent crimes involving firearms in 2008.”  How much press did the study get?  Virtually none.

In North Carolina they understand that simply destroying guns does not solve anything.  Guns turned into a buy-back program are guns that would never have been used in a crime.  The so-called “gun culture” is not the problem.  It’s the “thug culture” that’s the problem.  Until we address that, senseless killings will continue.

Phil Valentine is the host of the award-winning, nationally syndicated talk radio show, The Phil Valentine Show.