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Middle-class tax hike

Congress’ nonpartisan Joint Committee on Taxation estimates that by 2027 taxes will be raised for those earning less than $75,000 and taxes will be given away to those earning more than $75,000.

More specifically, federal income taxes will be raised by $2.328 billion for those earning less than $30,000 and $1.103 billion for those earning between $30,000 and $75,000.

A total of $9.057 billion in federal income taxes will be given away to those earning between $75,000 and $500,000 and $7.099 billion to those earning above $500,000.

In short, $16.156 billion per year will be given away to those earning above $75,000 by raising taxes of $3.431 billion to those earning less than $75,000 and borrowing the rest, $12.725 billion, which will be paid by our children and grandchildren.

In addition, a huge amount of taxes will be given away to wealthy stockholders of corporations by dropping the corporate tax rate to 21 percent from 35 percent.

To boost job and income growth, Republican policy has been to cut taxes on the wealthy and Democratic policy to increase taxes on the wealthy.

To examine the outcome of these policies, I examined our 96-year economic history from 1921 to 2016. Data were collected from the Bureau of Labor Statistics and Bureau of Economic Analysis. During this period, both Republicans and Democrats held the presidency for an identical 48 years.

Average per-year jobs created were 735,000 under Republicans and more than twice as many under Democrats.

The average growth rate of the gross national product was 2.18 percent under Republicans and 4 percent, almost double, under Democrats.

The average growth rate of per capita income was .97 percent under Republicans and 3.05 percent under Democrats.

Mukhtar M. Ali, Marco Island

Extend a helping hand

There’s a literal as well as a figurative difference between what is meant by the terms hand up and handout.

Offering a hand up can be defined both microscopically as well as macroscopically
Helping someone get back on his feet after taking a spill is a “hand up.” On a larger scale, helping to restore electrical power, drinking water and shelter to entire communities is a large scale hand up. In both examples, the aid is intended
to allow the recipients to regain functionality and resume their independence.

Handouts are another matter. They have a pejorative connotation often associated
with “giveaways” to lazy or indolent individuals or categories of people who, for whatever reason, refuse to help themselves.

While few would condemn the Red Cross or the Salvation Army or the Federal Emergency Management Agency for providing a hand up aid in times of disaster, many responsible citizens are quick to denigrate programs such as food stamps, Medicaid and other forms of welfare as wasteful. Indeed, they are seen as immoral or sinful in their encouragement of long-term or even lifetime dependence.

We should be careful in this facile and simplistic disregard of those genuinely in need,
lest we find ourselves in their shoes. Catastrophe or bad times can strike us at any time in our lives.

The simple lesson is that we should avoid being overly judgmental and more willing to extend a helping hand when and where it is needed. That hand could be reaching down to us.

Robert P. Sanchez, Naples

Listen more to professionals

The Tax Cuts and Jobs Act of 2017 has brought a host of changes which will impact all of us, one way or another, and we are still finding certain unexpected benefits.

Case in point: raising the estate tax exemption to $11 million per person and $22 million per married couple. We can debate the merit of this all day, but in my mind, it’s a winner because we are likely to see the end of Irv Blackman’s shameless shilling for life insurance. Every single column he has published in this paper touts the wonders of life insurance and how it can overcome this problem or that shortfall.

For those of us with less than $22 million, life insurance is no longer needed and good comprehensive planning can produce outstanding results.

If you have more than $22 million and don’t have an estate plan in place, please make an appointment with a qualified local attorney as soon as possible. If you do have a well-drafted plan in place and you listen to newspaper articles more than your local attorney/CPA/broker, you deserve what you get.

Ted Hudgins, Naples

 

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