Hillary Payback or Tax Reform?

It looks like everyone got what they voted for in tax reform.

It’s pretty clear who the big winners and losers are. Each individual will probably have to do some calculating to be absolutely certain, but the broad groups of winners & losers are pretty clear right now.

Tax Reform isn’t Valhalla. We did not just die and go to heaven. For every tax cut, there is a tax increase somewhere to make up for the lost revenue. That’s how the process works. If you are a large global corporation with more than 100 shareholders and no individual owner to answer to, you won the lottery. You are the big winner. That much is certain. That is where the bulk of the tax savings go. OK. That’s what they said they were trying to do, and they did it. For everyone else, broad groups will win and broad groups will lose. And those are pretty clear right now.

But here’s a pattern that has escaped notice.

Losers:
High income earners with expensive homes and dependent children living in high tax states will be losers under tax reform. As will professionals such as equity bankers & physicians at all income levels wherever they live. Both groups will pay more tax under tax reform. But here’s where the pattern begins to show up. According to the demographics, those are the Hillary voters. When they voted for Hillary; they voted for tax increases; and they got tax increases.

Winners:
The winners on tax reform will be low income families in low tax states. In fact, I believe, low income people even in high tax states will be winners. Hmmm. Does that describe Trump voters? I think it does. Those people voted for tax cuts when they voted for Trump. And they got tax cuts. That formula works even for people who live right next door to each other; one voted for tax hikes and one voted for tax cuts; they both got what they voted for.

The big losers on tax reform are Hillary voters who are really winners because they voted for tax increases and got what they voted for. Everyone got what they voted for. Probably coincidence.

But balancing the budget in the same week?

Now here’s the real kicker. In the same week tax reform was passed, Trump manipulated our friends in the UN into voting in favor of ending their own US foreign aid, which will go a long way toward balancing the Federal budget. Thank you UN.

Trump gave people what they voted for and balanced the budget in a single week. Is that even possible? No other President from Washington to Lincoln to FDR ever had a week like that.

There is one hurdle left.

Who has the gonads to cut off 90% of foreign aid? Probably not Trump. The press would rake him over the coals. But Nikki Haley definitely does. Did you see her glaring at UN voters as they voted on the Jerusalem issue?  In addition, she followed up the vote by inviting all the nay voters to a party. She is looking for a fight and she is getting in their faces. Nikki Haley will cut them off in a minute, and she won’t give a diddle what the press thinks.

These people are serious. I’m going to keep my head down and stay the hell out of both their ways. But I am enjoying the show. As the Chinese proverb says, ‘May you live in interesting times.’

PS. I will be a loser. But after applying my own off-the-shelf tax strategy, I will be a winner. There is a solution to every problem.  Want to solve your tax problems? Give us a call.