The Kudzu Kronicle

Because not all Southerners are the same

Tag: tax reform

It’s about to get tougher for American charities and the poor

If you’re poor, it’s probably not very reassuring when Speaker Paul Ryan touts the extra $1.50 you’re getting in your paycheck. America is turning on you — demonizing the poor, slashing taxes for the rich and reducing incentives to give to charity. Poverty is about to grow, along with financial inequality.

Nonprofits like the United Way are expecting big declines in their revenue this year, largely due to the tax reform that disincentivizes donations to charity because standard deductions are increased for so many in the bottom 80 percent. Meanwhile, programs for the poor are being slashed, leaving a bigger need for the work of nonprofits, who will have less money to do the work.

Tax reform is not doing much to help the poor, the bottom 20 percent. And that’s a huge problem because the poorest 20 percent of Americans are far more generous than the top 20 percent — and that counts those giant gifts from folks like Bill Gates. The top 20 percent gives only 1.3 percent of its income to charity, while the bottom 20 percent gives at more than double that rate. They don’t have much, and they can’t give much, but they give what they can. They see the problems around them. If they could give more, they would. History shows that if the rich, as a whole, can give less, they will. Continue reading

Let’s try trickle-up economics

I’m going to take President Trump and Republicans at their word that what they really want to do is boost the middle and lower classes with their tax reform plan. Not only that, but I’m going to help them get everything they want. All they have to do is tackle tax reform in two phases.

Because corporations are making record profits and already paying an effective tax rate on average of 21 percent (though some pay less or zero), they likely can wait a moment for tax relief and more breaks. Meanwhile, the wealthy in America are doing better than ever, so they might can wait a moment, as well. Besides, we don’t have to look back very far in our history to find that trickle-down economics does not work. So, let’s try trickle-up economics.

Start tax reform with small businesses instead of corporations and with the bottom 90 percent or so of Americans instead of the top 1 percent. President Reagan famously noted that a rising tide lifts all boats as he pitched trickle-down economics in the ’80s. Unfortunately, it lifted all boats in a small pond. Trickle-up economics relies on an oceanic rising tide to lift a whole lot more boats, from the poor boy’s canoe (or kayak in my case) to the greedy man’s yacht. Continue reading

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