Richard A. Lindsey, CPA Lindsey & Waldo, LLC – Certified Public Accountants
  • More and More Americans Escape the Tax Roles

    Filed under Informational, Taxes
    Oct 30

    According to the article “Donald Trump’s tax plan would help the poorest Americans” on www.cbsnews.com, the Republican presidential candidate’s tax plan is both “really, really good for Donald Trump” and at the same time “should put more money in the pockets of the poorest Americans.”

    Guess what happens when you take less from both ends of the spectrum…

    That’s right; the ones in the middle get SQUEEZED like a fresh orange at the Florida Welcome Center.

    Assuming, of course, that the plan is revenue neutral and most commentators say that, despite Trump’s claims otherwise, it just isn’t so. Most tax experts say that in order to reduce the revenue collected from the poorest and the richest American, severe tax cuts are required. The conservative Tax Foundation estimates that Trump’s plan would decrease revenues by nearly $12 trillion dollars over the next decade and increase the debt by over $10 trillion.

    So what do the lowest-income Americans pay? Well, if you looked strictly at the standard deduction and exemptions, a single person should start paying taxes when they earn more than $10,300 and double that for a couple. However, when you take into account the benefit many lower-income earners receive from the Earned Income Tax Credit (EITC) and the Child Tax Credit, the basic rule of thumb, according to the Tax Policy Center’s Elaine Maag, is that a family of four doesn’t start owing income taxes until their income is about twice the poverty level.

    Last month, The Tax Policy Center reported that 77.5 million households won’t pay any income tax in 2015 out of a total of 171.3 million.

    That’s 45.3 percent of American households!

    That figure is up roughly five percentage points from the Center’s 2013 estimate of 40.4 percent.

    Maag told CBS News that, under Trump’s plan, “most people could earn more money without owing taxes and not be worse off than under current law since they would still get their refundable EITC and CTC.”

    The downside to such a “generous” plan, according to the article, “is that it comes at a high cost to the U.S. Government.” REALLY? And where do you think the government gets “its” money?

    Americans are generous people, but can we afford for our government to be generous on our behalf? Generous to the American poor, generous to the foreign poor, generous to the rich, generous to our soldiers, generous to those who support us, generous to those who don’t, generous to… everyone?

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