The author of a recent letter, "Wealthy will benefit most from GOP's tax-cut plan," is upset over the apparent lack of fairness over the Republican tax cut. Such arguments are both financially and mathematically flawed.
The proposed cuts are income tax cuts. They are not designed to redistribute wealth, correct perceived social unfairness or create income equity. The writer laments that the cuts are unfairly beneficial to the "upper 20 percent of American families with six-figure incomes."
Here are the facts. The proposed plan offers a 1 percent point-rate reduction in all five tax brackets. This means a greater reduction, by percentage, to those in the lower brackets. The lowest tax rate would drop from 15 to 14 percent, a 6.7 percent reduction. The 28 percent tax bracket would drop to 27, a 3.6 percent reduction.
Rates on six-figure earners drop from 31 to 30 percent, a 3.3 percent reduction; from 36 to 35 percent, a 2.8 percent reduction; and from 38 to 37 percent, a 2.5 percent reduction. The GOP plan also offers relief for all married tax filers by reducing the marriage-tax penalty.
The writer fails to mention that most low-income families pay little or no federal income tax. In fact, those at the bottom levels receive the earned-income tax credit, which is frankly a credit for taxes never paid.
Those opposed to the cut claim that the affluent get most of the tax-cut money. Of course they do. They pay most of the taxes! Would the writer have the moderate-income family receive the average $5,122 tax cut and the upper-income family receive the $367 tax cut? They have a word for such a system. It is called Socialism.
The writer claims saving Social Security and Medicare is the proper way to proceed. The Republicans agree. Their plan uses only 25 percent of the projected surplus for tax cuts. The rest is set aside for shoring up these ailing programs.
I am tired of people bashing those who they perceive as earning more than they deserve. The simple economic fact is that these are the people who make our economy go. They are the business-builders, job-creators, benefit-payers and taxpayers in our capitalist economy, which is the greatest in the world.