Jim Houser, owner of Hawthorne Auto Clinic, hosted a Town Hall with Congressman Earl Blumenauer and Senator Ron Wyden last month to speak with local business people about President Trump’s Tax Cuts and Jobs Act (TCJA) that went into effect last year.
The short form that cuts individual income tax rates, doubles the standard deduction and eliminates personal exemptions. The top individual tax rate drops to thirty-seven percent.
The TCJA cut the corporate tax rate from thirty-five percent to twenty-one percent beginning in 2018. The corporate cuts are permanent, while individual changes expire at the end of 2025.
According to Senator Wyden and Congressman Blumenauer, the Act makes the US progressive income tax more regressive. Tax rates are lowered for everyone, but they are lowered the most for the highest-income taxpayers.
Several business people and one tax preparer spoke about the changes TCJA has had on them.
Joan, a mother of two and owner of a hair salon in Montavilla, was shocked when she ended up owing $2,735 more than the previous year without a huge change in earnings.
Another school teacher, whose partner also teaches said his taxes went up $2500 when generally they receive a $400 or $500 refund.
Wyden summarized that many people rely upon their tax return as a kind of enforced savings, but some middle income wage earners will not be seeing that this year.
The tax consultant said that some filers have noticed a tax increase, while others did not. It was too early in the tax season to tell. She said people will benefit a little but the TCJA definitely gives a “boatload” to the already wealthy. Her fears are that the country will end up paying the price in the long run.
Both Wyden and Blumenauer are opposed to this new Act. The idea of supply-side or trickle-down economics that began in the 1980s says what’s good for the wealthy will trickle down to everyone in the society, but it has not shown to be true.
Senator Wyden had been at the table with Big Pharma in Washington D.C. for five days before this town meeting. “They expect to receive millions in tax cut with no plans to lower the rates on the pharmaceuticals,” he said. Congressman Blumenauer
For these two politicians, whose intention is to do what is best for the long term economic growth of the country and the people, tax laws like this one are out dated. The previous century’s motto that “greed is good,” does not pencil out in this day and age. NT