Big question answered: About those Trump tax cuts

Published: 5/9/2019 12:15:23 AM

(Last week, we asked readers this question: “Did you benefit from the Trump tax cuts?” Here are the responses we received.)

Do your tax homework

Did you benefit from the recent tax cuts? I didn’t do as well as I wished for, but I know why. If you didn’t benefit, then don’t get angry. Get analytical. Sure, it may take a little time, but don’t you want to protect your money and save yourself from unanticipated results?

The answer that explains your disappointment may rest with you. All you saw and heard were the words “tax cuts” and you didn’t read the fine print. You assumed it would apply to you. Maybe it did, and maybe it didn’t. Yes, the rates were cut. But the rate and the bottom-line effect on you could be quite different. Two unusual changes took place, in the standard deductions and personal exemptions. These are numbers that were applied to your gross taxable income and your ultimate tax liability. But look hard at what happened to personal exemptions.

Run your estimated numbers for 2019: your income, your interest and dividends earned, your adjustments to income (all those items that used to appear on Page 1 of the old filing form). Then apply your eligible deductions to that number. Use the tax tables or formula to find your tax. Then, the most important step of all is to see what withholdings you have designated. Of course, if your withholding total does not measure up to your estimated income and the related tax, you will owe money next April. The smart taxpayer will increase the withholding amounts.

Psychologically speaking, most people would prefer to get a refund – however small – than pay money during the frenzied period of filing your forms or applying for an extension. So, if you were disappointed or puzzled this year, you can do something about it. Learn from 2018. Analyze your own situation, your own finances. Find out if you are not withholding enough in order to meet the April 2020 deadlines. You still have time to adjust your withholdings for the rest of this year. And next time, read the fine print, not just the headlines.

ELIZABETH HOADLEY

Concord

(The writer is a former economics teacher at Concord High School.)

The price of tax cuts

In the long run, few will benefit from the tax cut. Did I benefit from the 2018 tax cut? No.

But the more important question is whether, in the long run, will the United States benefit from those tax cuts? The answer is still no.

As the federal debt grows, the accompanying cost of serving that debt will suck funds from programs and projects. The list includes: infrastructure, education, health care, the environment and the national park system.

Tax cuts coupled with increased military spending during the Reagan administration spurred a recession that featured high interest rates and high unemployment. Bush II tried a similar ploy. Remember the Great Recession? Yes, cut taxes and start a war (that we’re still fighting almost two decades later). How did that work out?

As a result of Trump’s tax cuts, the nation will suffer. Most individuals will end up shouldering the cost – directly or indirectly – because less federal support for the environment will translate into polluted water and grungy air; decaying roads and bridges; fewer opportunities for affordable yet excellent education; and less access to preventative health care.

ANN DAVIS

Wilmot




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