I love tax season. The crisp air in the morning. Football season is over and the hope that is baseball season is right around the corner. The Christmas bills are almost paid off. And all New Year’s resolutions have been destroyed.
Doing my taxes is usually fun. I say fun because I am a truly sick person. I enjoy cleaning out my files, throwing out all the stuff I don’t need, and organizing everything to go into TurboTax.
I usually set up our withholding to get a nice little refund. Yes, I know it’s not a good idea to let the feds and state to hold a several-thousand-dollar wad of our cash every year but I hate risking owing.
I think some of our readers feel that way.
However, imagine my glee at getting money back slowly melt away as I fully realize our situation. The promised “huge” and “biggest tax cut ever” promised by President Trump simply did not materialize for us little folks. In fact, we got creamed.
How bad? Try about $8,500 at the first pass in our case. Yep. Instead of getting about $10k back, I am looking at a paltry $1,500. And I know I’m not alone. A friend of mine told me this week that he also lost about $6k.
Wait a minute. Weren’t we told that the middle class would benefit from all of this? I was fully in support of corporate taxes getting cut back significantly to spur economic growth and an expanding economy. I was assuming that the loss in revenue would be covered by this supposed growth and a cut in spending.
Boy, was I wrong. And I wasn’t expecting that I and all my fellow middle class peers would be paying for it.
Jim de Bree wrote a column on this a few months ago warning us of this very thing. I did not take him seriously and largely discounted his sage words. I apologize, Jim. You were right.
The odd thing is, the loss was all on the federal side. State was relatively unchanged. That money-grubbing state of California was not the issue here. We have been damaged by a Washington, D.C., system that, I thought, was looking out for us ordinary middle classers.
Another irony. I am a scrupulously honest person when it comes to taxes. If the IRS comes after me, I have a receipt and an explanation for nearly everything. If anything questionable pops up, I run from it.
Now, I may be looking at “gray” areas that will help me recover from this disaster. Like, I might take a deduction for my dog’s shrink. I’m sure that is a business expense somehow.
Let’s not forget all the charitable donations that I made to Goodwill. I’m positive that the bag of old clothes was worth at least $6,000. That’s replacement cost. In Beverly Hills.
Another area of concern was the “corporate bonus” that we were all going to receive. My company got a massive payout that indeed paid for new equipment and some expanded business. A little also went to hourly employees.
But, exempt and mid-level management employees were mysteriously overlooked. When I asked senior management how we benefitted, I was simply told that we were and not to worry about it. Hmmm.
Many companies initiated big stock buy-back programs that indirectly assisted employee stockholders. It also greatly helped large stockholders who also happened to be many of those same senior level staff.
Wow, what is a good moderate conservative to do?
There are some who have postulated that the new tax code was simply a massive wealth transfer from high-tax blue states to low-tax red states. I didn’t believe it but may be true. Formerly legitimate tax deductions due to fees, taxes and expenses have been eliminated, forcing more of our income to be taxable.
I have to admit that Mr. Trump’s policy decisions have been fairly good. But, this one appears to be a stone-cold stinker. Would I have lost this much money if Hillary was in office? We will never know.
If the Dems really want to make some friends, they need to look at this tax issue. And Republicans need to determine if they are really an ally of the middle class. Because my checkbook is saying something very different.
Steve Lunetta is a resident of Santa Clarita and is wondering just what the GOP was thinking? He can be reached at [email protected].