Chartered Financial Consultant


Am I hysterical about the new tax law?

Not at all. What is “hysterical” squared or cubed or quadrupled? I’m closer to one of those.

Blame Congressional REPUBLICANS and our __________________ (fill in the blank) President. They did this hurriedly, without proper debate or public transparency or bipartisan support or thorough analysis.

1040_IRSHere are some of my thoughts:

  • These tax cuts are primarily for The Wealthy* and big corporations (aka The Wealthy). Temporary tax cuts for the rest of us will look good at first, then will phase out. The tax cuts are being financed by borrowing, adding to the deficit.
  • This is not tax simplification. You don’t simplify the tax code with a 500+ page bill loaded with the special interest perks** inserted by the irresponsible REPUBLICAN Senators to buy their votes for the largest tax law change since 1986. There are plenty of the phase-ins, phase-outs, and income limitations that make the tax code complicated. Don’t expect a postcard tax form in the foreseeable future.
  • The doubling of the standard deduction seems to simplify things, but this will have a major unintended consequence. Why not just get rid of all personal deductions, lower tax rates and really simplify the tax law.
  • Because of the higher standard deduction, charitable contributions (though still deductible), are less likely to provide tax benefits to the donors. People who receive NO tax benefits are less likely to contribute to churches and non-profits***.
  • Depending on what your deductions are, it could raise or lower your taxes. If you live in California, it’s likely to be a tax increase since state income taxes, property taxes and home mortgage interest will be limited. If your home mortgage is paid off and you bought your home decades ago, you may benefit from the larger standard deduction.
  • What comes next? Confusion. It’s already happening with people pre-paying their property taxes. When there is a major tax law change, even one that simplifies the Tax Code, it makes things unpredictable.
  • REPUBLICANS are true hypocrites. They will become fiscal conservatives again as soon as this bill passes. The hidden goal, I believe, is to cut or eliminate government programs, including Medicare and Social Security.
  • Members of Congress are already discussing how to PAY for the Tax Cuts for The Wealthy. In all likelihood, it will be by cutting social programs that benefit the lower and middle classes. Expect further budget cuts for the agencies that help protect Americans: FEMA, EPA, NASA, and FDA.
  • It is unlikely to create jobs. This is “trickle-down” economics. It didn’t work under Reagan. That is a myth; look it up. The most likely use for large corporation’s tax reductions is to buy back their stock or acquire competitors rather than create new jobs. There is a concerning trend toward privatization. Companies that aren’t traded on the stock exchanges can be more secretive and less accountable.
  • Finally, this law eliminates the ACA/Obamacare individual mandate. Without this, Obamacare as we know it is in serious jeopardy. Even though REPUBLICANS didn’t have the votes to repeal the ACA in several direct votes, they succeeded this time by hiding it in a “tax cut” bill. What cowards.

This is a shameful, irresponsible piece of legislation that is full of mysterious provisions whose consequences could be dire.

OK. Time to calm down. For those who want to read more, here are some links that provide more information.


Bob Dreizler

Bob Dreizler