In one of the richest places in the country, people care about their money. According to the census, Marin has the 17th highest median household income in the country. Unveiled on Sept. 27, the Republican Party has a new tax plan with promises of classic Reaganomic economic boom.
The tax plan would simplify the nine original tax brackets down to three. Almost everyone would see their taxes go down, except for some in the lower and middle classes. The plan would also lower the corporation tax rate from 38 percent to 20 percent and completely eliminate the estate tax.
These tax plans will have a wide range of effects if passed, including for those who work in high school. For those who make under $9,325, they will pay two percent ($186.50) more if the tax plan passes. Republicans want to make these changes in order to boost the economy with increased money circulation back into it.
The theory is that if the government cuts these taxes, everyone will have more money to spend and that the rich will expand their businesses to do better than their competitors. When these businesses expand, the idea is that the money will trickle down in the form of new jobs and better wages to everyday working-class Americans.
AP Economics teacher Laura Hailer said, “I understand the theory, but I don’t think that we’ve seen it work on a large scale.”
A major concern about the tax plan is the loss in government revenue. According to the nonpartisan Tax Policy Center, the plan would cost $2.4 trillion over the next 10 years and $3.2 trillion over the second decade. By the time that current high school students graduate college, according to this analysis, the country’s debt will increase, adding $5.6 trillion.
Social Studies teacher Francie Salle said, “It would balloon the deficit. It doesn’t sound very Republican to me.”
Wilbur Ross, the Commerce Secretary of the White House, claims that the plan would increase annual GDP growth by between 2-3 percent, meaning more jobs and prosperity. At the same time, Goldman Sachs, a multinational banking firm, claims that the tax cuts would instead only boost 0.2 percent GDP growth, not the 2-3 percent promised.
Many statistics claim what will happen nationally but what will happen locally?
“Cutting state deductions would make many people in Marin pay more. Corporations already have tax loopholes and they don’t need to pay less. We have a two-tiered society in Marin and this won’t impact the lower tier.” Hailer said.
This tax plan is the largest proposed change to taxes in 30 years, since Reagan reformed large parts of the economy in the 1980s. Trump is eager to create change after the medicare failures in the last couple months. He, as well as the Republican Party, needs this plan to work in their favor, especially since the 2018 midterms are so soon.
With stiff opposition from many economists, as well as Democrats in Congress, Trump’s fight to reform taxes will consume Washington in the next few months, with Republican congressional leaders suggesting that they may continue the fight into next year.