Pondering changing tax codes

While Congress thinks about changing the tax code, I will too. It’s not my forte — nor every politician’s either.

Having three brackets of income rather than seven may sound simpler, but it isn’t really. Either way, the IRS does the math via the tax tables. The real work is arriving at your total taxable income. I haven’t heard much about that, except standard deduction may increase and itemized deductions decrease (for example, nothing allowed for medical costs.)

However, the change from lowest to middle bracket becomes a real thud. When rates go from the current minimum of 10 percent to the new mid-rate of 25 percent, the first dollar you earn over the ledge is “worth” 75 cents. The last buck you made below it was “worth” 90 cents. A couple intermediate levels would cushion the shock.

If the lowest bracket rises to 12 percent, slightly over the present rate, is this decent when those higher up on the ladder all get a cut? But new exemptions and deductions may put many low earners below the level at which taxation even starts. We’ll have to see. Numbers ought not to exist in a vacuum. They should relate to the basic cost of living today in terms of relevant components and realistic cost of each. They need to be standardized and updated.

Did you note the highest personal tax rate would be 35 percent? Corporate tax would be 15 percent. What? Citizens United told us corporations are “artificial persons” and must be treated like real ones. So big corporations should pay 35 percent. You either are or aren’t a “person.” You don’t get to be one only when it benefits you. Fair is fair. Or is it?

This story was originally published May 12, 2017 at 5:12 PM with the headline "Pondering changing tax codes."