The Sage Publication is the student news site of Sage Creek High School in Carlsbad, CA

The Sage

The Sage Publication is the student news site of Sage Creek High School in Carlsbad, CA

The Sage

The Sage Publication is the student news site of Sage Creek High School in Carlsbad, CA

The Sage

Trump’s New Tax Plan Benefits the Rich

Trump+discusses+his+new+tax+plan+with+leaders+in+Washington+D.C.
Photo taken from whitehouse.gov
Trump discusses his new tax plan with leaders in Washington D.C.

Over the last three administrations, taxes have been controversial and divisive in this country. The new tax plan from the Trump administration is better than expected, but still hurts the poor and benefits the rich.

As students at Sage Creek many of us are not concerned with the logistics of big political issues like taxes and foreign policy because these issues are tough to digest and don’t fit the standard of media that we are used to consuming. But, students now are realizing the value in being aware of the world around us.

Taxes really aren’t the most exciting topic— but as stated before, they’re incredibly important and will impact many students as Sage Creek in the near future.

Taxes are broken down in three different categories: federal taxes, state taxes and local taxes. Within each of these categories are separate taxes themselves. For example, federal income tax is the tax on your yearly earnings as an adult. State taxes are similar to federal taxes, except the money is given to the state specifically. Lastly, local taxes focus on property tax and some taxation on your earnings. All of these taxes are very similar in how they work but all of the money is going to separate entities.

The amount of tax you have to pay, or the percentage of tax taken federally from your annual income, progresses the more money you make per year. Currently, with the Obama tax plan, there are seven different brackets, meaning seven different taxes one may have to pay. At the moment those look like this:

Income Tax

More than $418,400 — 39.6%

$416,700 to $418,400 — 35%

$191,650 to $416,700 — 33%

$91,900 to $191,650 — 28%

$37,950 to $91,900 — 25%

$9,325 to $37,950 — 15%

$0 to$9,325 — 10%

President Donald Trump is looking to simplify the seven tax brackets in place and reduce them to three. Trump’s plan doesn’t specify any income thresholds, but based on the numbers given in the current standing plan it should look something like this:

More than $418,400 — 35%

$416,700 to $418,400 — 35%

$191,650 to $416,700 — 35%

$91,900 to $191,650 — 25%

$37,950 to $91,900 — 25%

$9,325 to $37,950 — 12%

$0 to $9,325 — 12%

Simplifying income taxes for essentially everyone in America has done things like reduce taxation on the wealthy and the middle class, but has caused a small climb for those living in incredibly low-income families to moderately low income families.

Living in Carlsbad, many of the kids that go to Sage Creek will benefit from the implementation of this tax plan, and it should be simpler for young adults like us to understand the logistics.

Besides the point of education for students at Sage Creek, there are other political points that should be addressed. Trump has followed through on promises that even Democrats can agree on. The economy is a hot button issue with political parties, as many Democratic principles are based off the the regulation of the economy in the United States.

Trump promised to reduce taxes for the middle class and tax the wealthy, and he did that, for the most part. For the audience that Trump appeals to, mostly middle class Americans, he did that perfectly. But, as we can see from the numbers above, he reduced taxes quite heavily for people like him who claim to make about “10 BILLION DOLLARS” a year.

The tax brackets provided above are not set in stone, and could change when the Senate and the House of Representatives both propose their own tax plans. But, essentially this new tax plan will benefit the rich and middle class and increase taxes for the poor.

Taxing the poor just makes the poor poorer, correct? Then why increase taxes on people who most likely cannot pay while keeping other tax bracket percentages the same? There is a give and take to taxation, and it is obvious that it is not entirely equal.

View Comments (4)

Comments (4)

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  • D

    DonaldDec 3, 2017 at 10:34 pm

    I have a simple question to those who support tax cuts: How did the tax cuts in Kansas go? Did it help the state?

    Reply
  • J

    Jeff KleinNov 14, 2017 at 11:14 pm

    Actually, the plan as written will benefit the poor or lower wage earners by utilizing a higher standard deduction and child tax credits. This may be a little technical for this forum, however, this specific group does not itemize on their tax returns and their income falls below a threshold of where they get phased out of credits such as the child tax credit. They should fare well under the plan.

    As for the very wealthy, they should fare well too. There is a proposal to eliminate the alternative minimum tax (AMT) which is a tax in place to make sure wealthier people pay in a certain percentage. The AMT recalculates regular tax by excluding certain tax preference items which people who itemize claim. However, the biggest benefit proposed for the very wealthy is the elimination of the estate tax.

    Now for the middle to upper middle class which is probably most of Carlsbad, there could be a negative impact. A couple of the proposals are to eliminate state and local taxes as well as limit the mortgage interest deduction to loan amounts up to $500,000. People earning $150,000 to $400,000 typically are home owners who pay quite a bit in state taxes (CA is a high tax state) as well as good size property tax payment. These same people will typically have a mortgage larger than $500,000 as well. This group does not utilize the standard deduction and could lose a significant amount of their itemized deductions. The lower tax rate may not make up for the loss of these deductions

    Reply
  • J

    Jake NipperNov 13, 2017 at 11:48 pm

    Carlie,
    While I may not lean any particular direction on the tax reform issue, there are a few things I’d like to mention.
    The top tax bracket will not change in the value of the amount taxed, it will remain at the same value of 39.6% as far as I’m aware. The only difference is, the cutoff for the highest bracket is now a million dollars or more instead of the 400-whatever thousand dollar cutoff it used to be. The amount of people this impacts is so small that it’s essentially negligible.

    The biggest issue here that isn’t being addressed is the tax cut for corporations, which is unfathomably massive. It is proposed to go from 35% to 20%, which is an extreme change, especially considering how much money flows through the largest corporations in a fiscal year. This is supposed to encourage the corporations to do business domestically instead of outsourcing their business to the third world which could in turn net the government even more tax revenue, but if it doesn’t get more business on our soil as intended, there will be a deficit in tax revenue. I wish you would have touched on this, as it is the major facet of the tax plan. I don’t know which of the two effects it will have on our nation if it’s implemented, but it’s something that should really be considered.

    Reply
  • D

    Darius RahmanianNov 13, 2017 at 5:54 pm

    I don’t know anyone around here other than part time high school workers who would be affected by this. I pay taxes and 12 percent doesn’t really bother me. The tax plan seems to even out a lot more than it does with the previous ones. One of President Trump’s big pushes is to bring back American Jobs to the American People, and companies won’t do it if they are having a lot of their money being taken away. Not only this, Carlsbad is a significantly high area that you could call rich and upper middle class. So if anything you should be happy that when you hopefully get that six figure salary job after attending 4-8 years in College that you can spend that money instead of it being completely re purposed for the usage of the state. With this extra money, go make it your job as a high earning citizen and help the under privileged or homeless by donating money or participating at events .

    I really do hate this mentality that all “rich people are bad.” For heavens sake, many of us going off to college where our parents are going have to pay fat sums of cash while we work our butts off. Not everyone has the opportunity and we are the lucky ones who have such a great community and school to support us. So when you do get that 200,000 dollar degree, go do something with it rather than just being just another cog in the status quo. Also the rich should not have to pay for your college which you should work hard for.

    Reply