The release of the tax reform plan by the Republicans in the U.S. House of Representatives has caused the Washington spin machine to go into overdrive. For taxpayers there is much to like, including across-the-board tax rate reductions, doubling of the standard deduction and significant tax simplification. But progressive politicians and pundits predict the end of western civilization if the plan becomes law.
So as California citizen taxpayers listen to the hyperventilating coming from the nation’s political elites, what should they believe? Here’s our take:
It is important to remember that the proposed tax reform package is just that: Proposed. It is not the final product and will undoubtedly be amended substantially by the U.S. Senate. It is unclear whether tax reform will even be enacted this year although Republicans and President Trump have stated they would like it passed by Thanksgiving. That is a very ambitious goal.
Second, when hearing shrill criticism from progressives — which includes about 90 percent of the mainstream media — understand that they are still suffering from TDS (Trump Derangement Syndrome). Even though this tax reform proposal will be a legislative act originating and enacted by Congress, the effort is closely associated with President Trump and, therefore, no matter how beneficial it might be, knee-jerk attacks will be unrelenting.
Third, anything Democrats say about tax reform should be viewed with suspicion. Immediately after it was introduced, Democrats in Congress claimed that it would raise taxes on the middle class. For example, California’s own senator, Kamala Harris, sent a Tweet on October 27th saying, “On average, middle class families earning less than $86,000 would see a tax increase under the Republican ‘tax reform’ plan.” This claim was so false that even the Washington Post gave it a “Pinocchio” award, as they did to three other Democrats who made similar claims. Progressives, don’t forget, want higher taxes and are emotionally invested in stopping anything from Republicans and especially President Trump.
Much of the caterwauling coming from the left is from politicians in liberal states with high tax burdens. That’s because one particular element of tax reform on the table has the potential to disadvantage some taxpayers, especially high-wealth individuals, from the loss of the state and local tax deduction.
Democrats’ complaints about the loss of the SALT deduction achieve new heights in hypocrisy. Since when did blue-state politicians care about middle-class taxpayers, especially here in California? Gov. Jerry Brown’s statement that the tax cut plan “transfers income from individuals and families to large and powerful corporate structures” was unsupported by any analysis. It was as if he were reading off an MSNBC teleprompter.
In responding to Gov. Brown, Congressman Darrell Issa exposed Emperor Jerry as having no clothes: “It seemed only fitting to take this opportunity to highlight your expertise on — as your letter states — ‘horrible ideas’ on tax policy. I recognize the role of the state and local tax deduction to reduce the tax burden on many Californians, but let’s be clear: it has only become of such importance as a direct result of the tremendous weight that your misguided policies have put on California taxpayers.”
Bingo. The extent to which some Californians might pay more to the IRS is a direct result of the state’s highest-in-the-nation tax burden, brought to us by tax-and-spend Democrats.
In theory, the potential loss of the SALT deduction would finally compel progressives in California to rethink our high tax policies. But this is California. Our political elites would probably find some way, no matter how foolish, to use federal tax reform as an excuse to raise taxes yet again.
– Jon Coupal, president of the Howard Jarvis Taxpayers Association