Last week, Republicans released the Unified Tax Reform Framework. Shortly thereafter, many outlets and individuals began their analysis of said framework.
Unfortunately, much of what is being said is either unfounded or designed to deliberately mislead you. Considering the complexity of tax reform, we aren’t surprised at the many misconceptions and falsehoods that are surfacing on this topic. After all, our tax reform framework is challenging a 31-year-old status quo in Washington, D.C..
So this is to help set the record straight. Below you will find a handy guide on how to answer four common misconceptions about the Unified Tax Reform Framework.
Feel free to use them in your next political, dinnertime conversation (if you’re into that sort of thing).
Misconception 1: This is just a tax cut for the rich
Not true. Actually, the framework focuses on helping the middle class.
By consolidating our current seven tax brackets into three, many will see their tax burden decrease significantly. For example, most of those in the 15 percent bracket will drop to 12 percent, and most of those in the 10 percent will drop to 0 percent. The elevator goes down at every rate. This benefits many taxpayers, especially those living paycheck to paycheck, particularly because of an enhanced child tax credit and a new $500 tax credit for families caring for non-child dependents.
Additionally, under this framework the standard deduction nearly doubles ($12,000 for individual filers and $24,000 for married filers). This means, plain and simple, that you keep more of your income. For example, if your household brings in an annual salary of $50,000, then the first $24,000 of that income is completely tax-free. The current system only has a standard deduction of a little more than $12,000 for households.
Misconception 2: This plan increases the bottom bracket harming low-income earners
The exact opposite, actually. Like we said above, the elevator goes down at each rate. More people will see a greater share of their income in the 0 percent tax bracket, meaning more of their paycheck will be protected from federal income taxes.
The one question that repeatedly comes to mind is: what are the income levels in each bracket? Well, you need to remember, this is just a framework. The House Ways and Means Committee and the Senate Finance Committee are currently working to turn this framework into a bill. We’ve only completed the first step, now the hard work of actually penning the legislation is underway.
Misconception 3: It only benefits big businesses and large corporations
This framework actually drastically lowers tax rates for Main Street job creators from almost 40 percent to 25 percent. What are Main Street businesses? These are your classic, true-blue American small businesses. Like ma and pa bakeries and family-owned salons.
The framework also provides full expensing for at least five years meaning businesses can write off their purchases and investments in one year (something big bank-rolling corporations don’t need). The little guy businesses, however, can benefit from spreading their tax burden over multiple years.
Small businesses benefiting from the biggest tax cut in 80 years means more investments, more jobs and better wages. The framework provides the tax relief that will result in upward wage pressure, more jobs, and growth in our communities.
Misconception 4: Ridding itemized deductions hurts middle-class families
The elimination of most itemized deductions will have NO impact on the majority of tax-paying families. For the 30 percent of taxpayers who itemize today, the benefits of lower tax rates, enhanced child tax credits, and other reforms will likely outweigh the consolidation of itemized deductions. The plan also retains the deductions for home mortgage interest and charitable contributions – two of the most popular deductions.
This framework is going to help working Americans, hard working Americans. For 31 years, our tax code has grown outrageously complicated and burdensome, especially on the middle class. We’re working to change that.
Despite all the misconceptions surrounding the Unified Framework for Fixing Our Broken Tax Code, the truth remains that this framework is a blueprint for creating new jobs, growing paychecks, and bringing fairer taxes to American workers across our country.
Download a copy of the framework for yourself at FairAndSimple.gop.
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