A Personal view of the Republican Tax Plan

My wife came home from work yesterday and asked, “Ok Mr Attorney, how is this new tax plan going to affect us, you and me? Real money?”

My answer was “Well, our biggest tax problem last year was getting hit with the Alternative Minimum Tax (AMT), hard, and the new tax plan moves the range for AMT so high we don’t need to worry about it. We still have one child on our return, so we will get bit more child credit. The changes the Senate made to the awful House version moved the state/local tax exemption high enough to not impact our credit for Santa Barbara property taxes on our house, since we have paid it down below the personal home cap of $750,000. We have medical insurance from your job, so we won’t immediately feel the pain of the impacts of the tax bill that many in the country will feel on their medical insurance bill. All in all, we are a bit better under the new tax bill.”

My wife smiled and said “Good, I was worried about everything I heard.”

Then I continued, “HOWEVER, my greatest concern looking forward is that I still feel that a government debt crisis, both in the US and worldwide, will cause a massive financial failure in 2020 to 2022 and beyond. This tax bill worsens the potential that the US Deficit and government debt system will add to the world debt problem. The tax plan pulls the revenues out of the system without paying any of the bills. I have no reason to believe the lofty guesses they are making about the economic impact of the Tax Plan; they are talking smoke and mirrors. AND, the proposed Defense spending shows the Republicans cannot see the way to significant cuts in spending. The proposed defense and debt service budgets outweigh any possible cuts in other government departments that Republicans could make. And, what is worse, the Republicans have set themselves up for a fall in 2018 elections since most people are not in our tax bracket and will hurt from this tax bill, so you could have a Democratic Congress facing a Trump White House in the years I worry about preparing to stop the debt crisis (2019-2020). No chance a Democratic Congress and a Trump presidency will effectively deal with debt and spending. So, the long range prognostication of the Republican Tax Plan is chaos. … you asked.”

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