Why the Trump tax cuts are flopping

April 19, 2018

Bill Mead of Houston is glad the tax cuts signed by President Trump last year lowered the corporate tax rate, aligning it more with rates in other nations. But the naval architect, 71, still feels the cuts were far too generous to the wealthy. “I don’t know why they need it,” he says. “They’re just going to use it to overpay for something they could have anyway. They all need to sit down at the club and think about this. They could make the country better by paying a little more.” Overall, Mead—a Republican—disapproves of the new tax law. So do a lot of other Americans. In the latest Gallup poll, 48% of respondents said they disapprove of the tax cuts, while just 39% approve–which seems surprising, given that the cuts have boosted take-home pay for roughly two-thirds of workers. Republicans in Washington are so dismayed by the tax law’s unpopularity that they’re considering another round of tax cuts, although passage seems unlikely. Yahoo Finance conducted its own flash poll on April 18 to figure out why, exactly, Americans don’t like the tax cuts. We found three basic reasons: People think the tax cuts favor the wealthy over the middle and working class. They’re suspicious that tax cuts for businesses are permanent but tax cuts for individuals are temporary. And they think it’s irresponsible to finance the tax cuts with debt that future workers will have to shoulder.

“It bothers me, because I have children and grandchildren and I wonder how this is going to affect them,” a database architect who lives in the Pacific Northwest told Yahoo Finance. His income is in the top 3%, he says, and his after-tax pay rose by about 5% this year due to the tax cuts. His daughter earns far less than he does, however, and she has seen little gain. “I got a huge benefit,” he says, “but my daughter, who makes about one-eighth what I make, saw a negligible increase in pay. We should have had a tax cut targeted at the class that’s really hurting.” The data architect is an Independent. Respondents are also concerned about the $1.8 trillion in new debt the US government will have to issue over the next decade, to make up for federal revenue lost to the tax cuts. “This was adding fuel to a fire already burning fine,” says Mike, a Wisconsin investment adviser. “We should be running, at worst, a break-even budget right now and stacking some dry powder. It was just a classic case of borrowing from the future at the stupidest possible time.” Mike is a Republican.

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Common Sense 1 said:

https://www.cbsnews.com/news/how-much-will-the-tax-cuts-raise-your-take-home-pay/

How much will the tax cuts raise your take-home pay?

The tax cuts for individuals in the new law President Donald Trump signed in December are the result of lower individual tax brackets, which raise the amount of income that's taxed at the new lower rates. The standard deduction that's claimed by about 75 percent of taxpayers is also doubled (but the old personal exemptions are eliminated).

Most workers will see an increase in take-home pay when employers adopt new payroll withholding tables that reduce the federal tax withheld from workers' pay. Here's how that works, how you can find out how much your take-home pay could increase and when you can expect to see that bump.

Take-home pay for a person claiming single status and one withholding allowance, with gross annual income of $50,000 paid biweekly, would increase by about $55 per pay period, or approximately $1,440 per year.

For a person claiming single status and one withholding allowance, with gross annual income of $75,000 paid biweekly, net take home pay would increase by about $84 per pay period, or approximately $2,190 per year.

For a worker claiming married status and two withholding allowances, with gross annual income of $75,000 paid biweekly, net take home pay would increase by about $61 per pay period, or approximately $1,590 per year.

For a worker claiming married status and two withholding allowances, with gross annual income of $100,000 paid biweekly, net take home pay would increase by about $107 per pay period, or approximately $2,777 per year.

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Lutherf said:

While all that is true and accurate I believe that the OP's take on this new tax law is that people are generally upset that it doesn't punish the wealthy enough. For a Progressive to truly appreciate a tax plan it must impose a greater burden on those of financial means than the previous cut did. Ideally (for social progressives), all tax cuts would come from confiscating the assets of people deemed to be "greedy capitalists". That would make America happy.

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Common Sense 1 said:

Here's a list of S&P 500 companies, citing the tax-cut as a motivation, that have announced "bonus" payouts to workers. (The list does not include companies that are giving pay raises or 401(k) boosts.

https://www.usatoday.com/story/money/2018/01/26/did-your-company-pay-you-bonus-tax-savings-check-list/1065291001/

Alaska Airlines

Bonus: $1,000

Employees getting bonus: 19,000

American Airlines

Bonus: $1,000

Employees getting bonus: 130,000

Apple

Bonus: $2,500 in company stock

Employees getting bonus: most of 138,126 employees worldwide

AT&T

Bonus: $1,000

Employees getting bonus: 200,000

Bank of America

Bonus: $1,000

Employees getting bonus: 145,000

BB&T

Bonus: $1,200

Employees getting bonus: 27,000

Citizens Financial

Bonus: $1,000

Employees getting bonus: 12,500

Comcast

Bonus: $1,000

Employees getting bonus: 100,000

Comerica

Bonus: $1,000

Employees getting bonus: 4,500

Discover Financial Services

Bonus: $1,000

Employees getting bonus: 15,000

FedEx

Bonus: NA

Employees getting bonus: NA

Fifth Third Bank

Bonus: $1,000

Employees getting bonus: 13,500

Hartford Financial Services

Bonus: $1,000

Employees getting bonus: 9,500

Home Depot

Bonus: $200 to $1,000

Employees getting bonus: Vast majority of 40,000

Kansas City Southern

Bonus: $1,000

Employees getting bonus: 6,485

Navient

Bonus: $1,000

Employees getting bonus: 6,566

PNC Financial Services Group

Bonus: $1,000

Employees getting bonus: 47,500

Royal Caribbean

Bonus: Company stock equivalent to 5% of pay

Employees getting bonus: 66,000

Southwest Airlines

Bonus: $1,000

Employees getting bonus: 55,000

Starbucks

Bonus: $500 to $2,000 in company stock

Employees getting bonus: 150,000

Thermo Fisher Scientific

Bonus: $500

Employees getting bonus: N/A

Travelers Companies

Bonus: $1,000

Employees getting bonus: 14,000

Total System Services

Bonus: $1,000

Employees getting bonus: 11,500

U.S. Bancorp

Bonus: $1,000

Employees getting bonus: 60,000

Verizon

Bonus: 25 shares of company stock for part-time workers

50 shares of company stock for full-time workers

Based on Feb. 1 closing stock price

Employees getting bonus: 153,000

Walmart

Bonus: $1,000

Employees getting bonus: 40,000

Walt Disney

Bonus: $1,000

Employees getting bonus:125,000

Waste Management

Bonus: $2,000

Employees getting bonus: 34,000

Zions Bancorp

Bonus: $1,000

Employees getting bonus: 80% of workforce

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Lutherf said:

While all that is true and accurate I believe that the OP's take on this new tax law is that people are generally upset that it doesn't punish the wealthy enough. For a Progressive to truly appreciate a tax plan it must impose a greater burden on those of financial means than the previous cut did. Ideally (for social progressives), all tax cuts would come from confiscating the assets of people deemed to be "greedy capitalists". That would make America happy.

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Common Sense 1 said:

Here's a list of S&P 500 companies, citing the tax-cut as a motivation, that have announced "bonus" payouts to workers. (The list does not include companies that are giving pay raises or 401(k) boosts.

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late said:

This is a good article about the tax cuts.
https://www.nytimes.com/2018/02/01/business/economy/trump-tax-cuts-economy.html

Health care premiums are going to go up due to the tax cut bill. The middle class tax cuts are temporary. From where I sit, the cost of living seems to be going up.

I smell trouble, but then I tend to be pessimistic about the economy. But I think there are a couple things that will be true. Trickle down is supposed to boost productive investment, when Reagan did tax cuts, a lot of that money wound up in the financial sector, not the productive economy.

The article says it's too soon to tell. But this looks like another increase in the income inequality that is degrading the economy. and the country.

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ElChupacabra said:

The thing is though the cuts expire for most Americans while the cuts for the top earners do not. While the initial bonuses given by some companies made for good publicity, it ends up being a one time prize unless the continued benefits companies reap from tax cuts are passed on. As for "greedy capitalists", it's in the nature of business to maximize profits but when that also includes using government to steer policies in that direction via subsidies etc. is that acceptable in your opinion?

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ElChupacabra said:

The thing is though the cuts expire for most Americans while the cuts for the top earners do not. While the initial bonuses given by some companies made for good publicity, it ends up being a one time prize unless the continued benefits companies reap from tax cuts are passed on. As for "greedy capitalists", it's in the nature of business to maximize profits but when that also includes using government to steer policies in that direction via subsidies etc. is that acceptable in your opinion?

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Common Sense 1 said:

Here's a list of S&P 500 companies, citing the tax-cut as a motivation, that have announced "bonus" payouts to workers.
American Airlines
Bonus: $1,000
AT&T
Bonus: $1,000

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late said:

This is a good article about the tax cuts.
https://www.nytimes.com/2018/02/01/business/economy/trump-tax-cuts-economy.html

Health care premiums are going to go up due to the tax cut bill. The middle class tax cuts are temporary. From where I sit, the cost of living seems to be going up.

I smell trouble, but then I tend to be pessimistic about the economy. But I think there are a couple things that will be true. Trickle down is supposed to boost productive investment, when Reagan did tax cuts, a lot of that money wound up in the financial sector, not the productive economy.

The article says it's too soon to tell. But this looks like another increase in the income inequality that is degrading the economy. and the country.

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Rogue Valley said:

What's this? $1,000 dollars? Is this supposed to buy the votes of Independents?

You gotta be kidding me. That's not even a nice TV or a trip to Disneyland.

Why would anybody want this GOP pittance when their children and grandchildren are going to be saddled with an immense GOP debt and deficit?

The wealthy like Trump get millions in tax savings ... and Americans are supposed to be happy with their lump of coal?

If Americans are smart, they'll save whatever they can now to help them deal with the crippling Trump recession that's barreling down the line.

I can't believe you even post such simpleton crap. Check that, I do believe it.

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Lutherf said:

Every tax bill we have ever had has been temporary. Every November congress has to decide whether to extend this provision or that provision. They always tie extending certain provisions to additional spending. This bill is nothing new in that respect. What is new in this bill is that for the first time in a long time it has focused on economic improvement rather than social welfare. The provisions which benefit small business owners could well serve to drive the economy like we haven't seen in decades.

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KLATTU said:

I'm sorry to break it to you, but people dodn't care about whether their children or grandchildren are saddled with debt.

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Rogue Valley said:

Why the Trump tax cuts are flopping

It will be a disaster for the Middle Class and poor. This is what happens when political ideologues pretend to be economic and taxation polymath's.

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jimbo said:

The thing is, there is no such thing as a permanent law. These tax cuts expire in 8+ years, and may or may not be increased or decreased at any time in the interim. So too the corporate tax. It's only permanent until it's changed.

2025 is two election cycles away. Enjoy it while it lasts.

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KLATTU said:

How does this tax cut hurt poor people?

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KLATTU said:

How does this tax cut hurt poor people?

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jimbo said:

Poor people pay no taxes.

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Lutherf said:

While all that is true and accurate I believe that the OP's take on this new tax law is that people are generally upset that it doesn't punish the wealthy enough. For a Progressive to truly appreciate a tax plan it must impose a greater burden on those of financial means than the previous cut did. Ideally (for social progressives), all tax cuts would come from confiscating the assets of people deemed to be "greedy capitalists". That would make America happy.

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Chomsky said:

That's a crock, if I ever heard it! :doh

The personal cuts are temporary and will soon expire, and the corporate cuts DO NOT expire - no matter how you try to sleight your hand with semantics. You know very well the complaint here.

Pretzel logic like you just used is EXACTLY why much of the country despises this tax bill and those that created it & tried to sell it to the public! Do you really believe we all lack intelligence to the level of falling for this type of wordplay?

"It's xistancpermanent until changed"! :lamo

That's quite the argument, my friend! :doh

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