Monday, March 4, 2019

Visiting Column #10 -- What the Tax Cut Pays For

I have now done my taxes for 2018.

OK, I didn't do them myself; we have an accountant prepare them since I am a sole-proprietorship business, as a private consultant to a small number of defense contractors.  When the tax law is overhauled, you're better off ensuring that the law is being followed, especially when the IRS has already audited you once.

But inasmuch as I used to do taxes when my best girl and I owned a tax-processing business a few decades back, I always go over my return after it is prepared.  So I like to think I am astute enough to take a hard look at the changes in tax laws over the years.  In particular, I looked at the difference between what my household's income and expenses were this year under the new tax law, vs. what they would have been under the law for tax year 2017.

Well, surprise, surprise.  Had I had the same figures the previous year -- and for the record, I pretty much did -- I would have paid well over $4,000 more if President Trump had not pushed through the reform in the tax law.  In other words, had Hillary Clinton been elected, my family would have been demonstrably $4,000 poorer, and that money would have been in the hands of a rapacious Congress that would have spent it on a host of things I disagree with.

I suppose that, as a proportion of income, I am in line with most filing Americans, certainly those who are independent business types, in the improvement in my tax posture vs. the old law.  But interestingly, I wanted to put my benefit in perspective.

You see, as I wrote a number of times a few years back (including here, the most fun piece), I am still recovering from what Obamacare did to my family.  As you will read if you follow the link, we were quite comfortable with the health insurance policy we had up through 2014, when the worst aspects of Obamacare kicked in.

We were quite healthy, and therefore had a fairly low-priced, high-deductible policy that had worked well for us.  Since I did not have employer coverage (being independent), I had to go find my own policy, and did indeed obtain a family policy that worked.  In 2014, the premium was $550 a month, and it covered a 63-year-old couple.  Just as we wanted it.

In 2015, however, we were not so lucky.  Obamacare, passed a few years earlier, had finally kicked in, the Jonathan Grubers of the world having helped Obama ram through a lapdog Congress the notion that people were too stupid to decide what coverage was appropriate.

Where we had the plan we wanted in 2014, that policy was now illegal for our insurance company to offer in 2015.  We could only buy one of three offered in Fairfax County, Virginia, where we lived.  That was it.  The least expensive of the three was $1,090 per month for the two of us, that high partially because we now had to pay for coverage we neither wanted nor needed -- even Gruber would have to admit that a pair of 64-year-olds didn't need maternity coverage, and certainly not pediatric dentistry, given that at that time our younger child was 34.

But we had to pay for both, and between that extra, useless coverage and the lack of competition in our county, we had to pay through the nose until mercifully we turned 65 in 2016 and could switch to the coverage of Medicare -- which we had been already paying on since 1974, but had not yet received any benefit previously.

In just that year and a half, my wife and I paid about $9,200 more, because of the Obamacare law, than we would have had the law never been passed.  And here is the real crime in all this -- that $9,200 didn't go to the Government.  Nope -- every penny of that additional cost to my family went to the insurance company, Aetna, Inc., which happily sold me a policy for thousands more than I needed or wanted.

In case you were wondering who privately was thrilled when Obamacare was passed, you can start in Hartford, where the suits in the insurance industry was doing cartwheels.

So tax cuts.  OK, the way I look at it is this: The government cost me $9,200 in medical insurance premiums I should never have had to have paid, by passing a law that now, with the individual mandate gone, is probably unconstitutional.  I want that money back.

And now, with a different president in office and some shiny new tax laws in place that actually encourage businesses to grow and expand, and carry the economy even beyond the heights that President Trump has already brought it, well, it's my turn.  As long as Congress doesn't mess around with the tax law, somewhere around May of 2020 I will have broken even, and the tax law will have paid me back for what Obamacare took from me.

Needless to say, my individual case is being replicated nationwide.  Thank God.

Copyright 2019 by Robert Sutton
Like what you read here?  There are over 1,000 posts from Bob at, and after four years of writing a new one daily, he still posts thoughts once in a while as "visiting columns", no longer the "prolific essayist" he was through 2018, but still around.  Appearance, advertising, sponsorship and interview inquiries cheerfully welcomed at or on Twitter at @rmosutton

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