Friday, March 29, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, November 17, 2017
Understanding the Congressional tax bill
By Keli'i Akina PhD @ 9:16 PM :: 3639 Views :: Taxes

Understanding the Congressional tax bill

From Grassroot Institute, November 17, 2017

There’s a lot of news out there about the tax bills before the Congress, and nearly all of it is confusing.

Call it a symptom of our increasingly partisan media culture or a reflection of political infighting, but it does make it frustrating for those of us who are interested in knowing what’s actually in the bill and how it could affect our lives.

Fortunately, the national Tax Foundation has analyzed the Senate Tax Cuts and Jobs Act and presented a state-by-state analysis of its impact. Unsurprisingly (and contrary to the reports you may have gleaned on social media), the bill is neither a ploy to let the wealthy destroy the poor, nor is it a panacea for all economic woes. But there is some good news.

Using its Taxes and Growth Model — which includes analysis of the impact the proposed tax changes would have on jobs, federal revenue, wages, cost of capital, distribution of income, and the economy in general — the Foundation estimates that the Senate bill would lead to a 3.7 percent increase in gross domestic product (GDP), a 2.9 percent increase in wages, and an additional 925,000 full-time-equivalent jobs.

Overall, the Senate bill is expected to create sufficient economic growth to lead to an additional $1.26 trillion in federal revenues, which would reduce the cost of the plan, making it more revenue neutral.

When it comes to its effect on individual income, changes would come as soon as next year.

The bottom four quintiles of taxpayers (the 80 percent) would have after-tax income increase from 1.1 percent to 1.9 percent.

The top 1 percent would see the largest increase on a static basis, particularly in the first year, when a lower corporate income tax and lower pass-through tax rate would cause after-tax income to rise for that group by 7.5 percent. The impact would level off by the time all economic effects of the tax plan have phased in, so that by 2027 taxpayers across the board would see an after-tax income increase of about 4.4 percent.

What does this mean in dollars and cents for Hawaii?

Basically, its impact on middle-class families here could be significant. We in Hawaii cannot hope to gain as many jobs as some other states, but the national Tax Foundation estimates the Senate plan would bring Hawaii approximately 4,143 full-time-equivalent jobs.

Even better, the estimated gain in after-tax income for a middle-income family here would be $3,174, which, as any middle-income family in Hawaii could tell you, is nothing to sneeze at, even with our state’s terribly high cost of living.

If only cutting marginal tax rates, simplifying the tax code and boosting the economy could become a local trend!

After all, there are plenty of things on the state level that could be cut, simplified or reformed.

Perhaps the state Legislature could take action to boost Hawaii’s job and income numbers even more.

E hana kakou (Let’s work together!),

Keli'i Akina, Ph.D.

President/CEO

Related: Republican Tax Cut Plan Would Give $3174 to Average Hawaii Household

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT