President Donald Trump claimed that the average household would save $4,000 from the Republican-sponsored tax plan passed last year. Other pundits claimed that the savings should average approximately $800. I could hardly wait to do my family’s taxes to lay claim to our share of this windfall. Our taxes are simple: my wife and I (in our mid-70s) file married filing jointly. Our income consists of Social Security, other pension income and a bit of interest income.
Some observations: Our social security income increased by the cost of living adjustment last year — a total of $708. However, the taxable portion of social security increased by $2,548 which is 360 percent of the increase. It seems Republicans are playing a bit of give with one hand and take away with the other.
Offsets to income included an increase to the standard deduction of $11,400. However, we lost our personal exemptions from last year that were worth $8,100. Thus the real increase to the standard deduction amounts to $3,100 — just about enough to offset our total increase in real income. Our actual taxes paid were a decrease of $66 from the previous year.
To help pay for this nominal decrease, the Republican plan calls for borrowing $1.5 trillion over the lifetime of the tax act. That is like going to the bank to borrow money to give your kids an allowance.
It doesn’t take a genius to figure out who the real beneficiaries of this tax cut are.
Linwood Gilbert, Turner
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