Author Topic: Republican Tax Plan  (Read 1875 times)

rightleft22

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Re: Republican Tax Plan
« Reply #100 on: November 30, 2017, 02:44:20 PM »
Dance Seriati Dance

Seriati

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Re: Republican Tax Plan
« Reply #101 on: November 30, 2017, 03:57:28 PM »
Lol, nothing like a substantive rejoinder to get the blood pumping, or I guess in this case the feet moving.

D.W.

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Re: Republican Tax Plan
« Reply #102 on: November 30, 2017, 04:11:41 PM »
It's a perception problem.  Wouldn't it be possible to write the tax code in such a way that allowed them to get deductions for raising wages? 

There is no public trust in trickle-down economics.  Citing it as a sure thing is ridiculous, even if economic theory makes a well reasoned case for it.

If the objective is to help out the middle class "average working American" there are more strait forward ways. 

Even if we get a best case scenario outcome on this, which seems fanciful to most, the optics on it are terrible.  If the PR on this bill was a movie trailer, I think everyone walking out of the theater would be wondering WTF they just watched.  Then we hope that 5-10 years later there will be a cult following of fans and everyone will forget the BS trailer used to lure some in for opening weekend numbers?  :)

Seriati

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Re: Republican Tax Plan
« Reply #103 on: November 30, 2017, 06:16:03 PM »
I don't view cutting the corporate tax rate as "trickle down" economics.  Corporations generally have to do something with the money they take in as profits, heck they actually spend a bunch of money that isn't profit as well.  The goal is to make a good use of that money to pay better wages, and honestly if you've worked for any company, you'd already know raises show up in "boom" years in much larger amounts and with much greater frequency.  When the company is doing well they really do pay more.  I'm not sure you're correct that there are more "straight forward ways" at least when it comes to getting raises to the middle class.  I'm not terrible inclined to support paying more taxes to provide more redistributed benefits either.

The point about optics really bothers me.  It seems like everything these days is decided based on the simplest surface understanding (ie optics).  People vote against their own interests everyday because of "optics."  What we ought to be doing is engaging in education, but I feel like half the time you can't out educate the rate of deliberate mis-education.  I mean here, one could dispute how much a corporate tax benefit benefits workers versus shareholders, but arguing that it doesn't benefit workers?  That's just bad science.

TheDrake

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Re: Republican Tax Plan
« Reply #104 on: November 30, 2017, 06:42:54 PM »
I think it is more interesting to ask "which workers might benefit" and where you're going to make up the shortfall (I don't believe all the missing corporate tax is going to be covered by growth).

Skilled workers benefit more than unskilled workers
Union workers benefit more than non-union
Possibly H1B workers benefit more than citizens (there aren't a bunch of out of work skilled people waiting for more investment.
Workers in an industry that produces exports benefit more

Other than exports, it is unclear to me how cutting corporate taxes would provide any more benefit than cutting personal income tax with respect to existing businesses. It is possible that new businesses may choose to locate in the US based on a tax advantage, but that's going to take a while before it really kicks in which is harder to measure. You'd cut tax, then two years later a business might grow enough to help move the needle. Larger companies looking to expand offices are going to take as long as Amazon to figure it out.

So if your goal is to benefit workers, why not chop out that $150B per year by cutting middle class taxes directly? After all, they'll have to spend that money on something - just like corporations, so that becomes revenue to corporations for the most part, right?

NobleHunter

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Re: Republican Tax Plan
« Reply #105 on: November 30, 2017, 06:46:54 PM »
You could also go after payroll taxes. Since we expect corporations to provide jobs, it makes no sense that we tax them by the number of jobs.

Wayward Son

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Re: Republican Tax Plan
« Reply #106 on: December 05, 2017, 12:55:33 PM »
Because of the sober and careful pace that the Senate went through to write their version of the tax bill, they accidently eliminated all corporate deductions. :)

Quote
Mitch McConnell never subjected his blueprint for restructuring the world’s largest economy to a single hearing. His caucus never invited experts to offer insight into the bill’s implications for housing, health care, higher education, outsourcing, or tax evasion. This haste had an upside for the Senate GOP: It allowed the party to pass deeply unpopular changes to the tax code before the public had time to learn about them.

But approaching major legislation like an Adderall-addled sophomore approaches an overdue term paper came with a minor drawback: It forced the party to pass a tax bill before they had time to read it.

In hindsight, McConnell should have asked for an extension. While Republicans were manically outlining their plans to take from the poor to give to the Trumps, they also, accidentally, nullified all of their corporate donors’ favorite deductions.

This screwup — like most of the tax plan’s oddest features — was born of a math problem. Due to arcane Senate rules, the Trump tax cuts can only add $1.5 trillion to the deficit over the next decade. Last Thursday, the Senate tax bill already cost about that sum, and then McConnell started making expensive promises to his few holdouts....  This left the Senate Majority Leader searching under the tax code’s couch cushions for new sources of revenue.

Eventually, he came upon the corporate alternative minimum tax (AMT). At present, most corporations face a 35 percent (statutory) rate on their income. But by availing themselves of various tax credits and deductions, most companies can get their actual rates down far below that figure. To put a limit on just how far, the corporate AMT prevents companies from paying any less than 20 percent on their profits...

The GOP had originally intended to abolish the AMT. But on Friday, with the clock running out — and money running short — Senate Republicans put the AMT back into their bill. Unfortunately for McConnell, they forgot to lower the AMT after doing so.

This is a big problem. The Senate bill brings the normal corporate rate down to 20 percent — while leaving the alternative minimum rate at … 20 percent. The legislation would still allow corporations to claim a wide variety of tax credits and deductions — it just renders all them completely worthless. Companies can either take no deductions, and pay a 20 percent rate — or take lots of deductions … and pay a 20 percent rate.

With this blunder, Senate Republicans have achieved the unthinkable: They’ve written a giant corporate tax cut that many of their corporate donors do not like.

It actually increases the taxes of some of those corporations. :)

And this is just the first one.  Remember the bad wording in Obamacare that allowed states to opt-out of providing state-run sites to choose insurers?  This bill must be riddled with such errors, although the others will be less blatant and take longer to discover.

Great going, McConnell.  You guys sure know how to run a country. :D

Mynnion

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Re: Republican Tax Plan
« Reply #107 on: December 05, 2017, 02:46:40 PM »
Any thoughts on how the increase in the standard deduction will impact charitable giving?  I have been wondering what if any change in giving patterns will occur when much of the benefit of itemizing is removed.

yossarian22c

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Re: Republican Tax Plan
« Reply #108 on: December 05, 2017, 03:06:40 PM »
Any thoughts on how the increase in the standard deduction will impact charitable giving?  I have been wondering what if any change in giving patterns will occur when much of the benefit of itemizing is removed.

I've wondered this as well, killing/limiting any of the major deductions (mortgage interest or state/local/property taxes) basically nullifies the others as well with the larger standard deduction. It makes filing taxes a little simpler but really impacts a lot of economic decisions. It's worrisome how rushed this bill was and how little public debate there was on it. It will be interesting to see what emerges from the conference committee and if it can still pass both houses. It seems likely that whatever comes out will pass but this is a real dud politically (and I would argue economically) for a tax cut.

Seriati

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Re: Republican Tax Plan
« Reply #109 on: December 05, 2017, 03:31:00 PM »
It may impact some charitable donations, but it's not likely to make a huge difference.  The big charitable deduction people are wealthy enough that they will still be itemizing.  It doesn't take that much for the charitable deduction alone to exceed to exceed the standardized deduction.  It also still works for estate planning.

You're really talking about a fairly narrow range of people, who were getting fairly modest benefits (granted a couple thousand each really adds up), but it's not clear that most of them weren't donating because they supported the causes and the deductions were a secondary interest.  I mean, what are the most common?  Museum memberships?  Goodwill donations?  Friends charity efforts?  Pretty much all things that will continue.

It may impact churches, but I'm not sure that most of their donors are itemizing.

D.W.

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Re: Republican Tax Plan
« Reply #110 on: December 06, 2017, 11:21:51 AM »
Anyone up to speed on the corporate minimum tax?  It sounded like this may be ironed out when the two bills get reconciled.  Was this intentional?  Cut the tax rate but maintain the minimum (which is almost the same as the top now)?

Wayward Son

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Re: Republican Tax Plan
« Reply #111 on: December 07, 2017, 03:45:57 PM »
Here's a lovely bit of news I didn't find out until now.

You may have heard about the increase in the Standard Deduction for everyone.  Going from $6,350 for individual and $12,700 for families to $12,000 and $24,000, respectively.  I've been comforting myself, knowing that no matter what else, at least I'm at least getting that decrease in my taxes.

Not so fast...

They are also eliminating the Personal Exemption of $4,050 per person.  :o

So my small family loses $12,150 in exemptions while only getting $11,300 in an increase in the Standard Deduction.  I'll be paying $850 more in taxes.  >:(

A single person will be paying $1600 less in taxes (not $5,650 less as you'd expect).  A married couple will pay $3,200 less.  But give the couple one child and they only pay $150 less.  A second child means they pay $2,900 more each year (as long as the children are under 17 and gets the additional $1000 in the child tax credit*).  And they get hit with a $3,050 tax increase for each additional child.

The Mormons are going to love this.  ;D

The Los Angeles Times has a good break down on it.  (The article is a couple of months old, but Forbes seems to indicate the changes are still there.)

The bottom line, though, is if you thought the GOP tax cut was going to cut your taxes significantly, look again.  You may be surprised...

*As long as they are not poor, since the Child Tax Credit is limited to up to 15 percent of their income over $3000.
« Last Edit: December 07, 2017, 03:54:52 PM by Wayward Son »

TheDrake

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Re: Republican Tax Plan
« Reply #112 on: December 07, 2017, 04:06:06 PM »
I'm glad we're finally getting rid of the baby subsidy. It never made sense to me why we would create incentives to have a big family, unless it is to prop up social security...  Being facetious, I know this was about "poverty level" and roughly trying to make sure that there wasn't federal income tax on basic subsistence.

I don't see how a $4,050 deduction is turning into a $3,050 tax increase, wayward. It seems that this is an increase in taxable income, not tax. Tax itself would be at the highest rate for the individual filing.


Wayward Son

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Re: Republican Tax Plan
« Reply #113 on: December 07, 2017, 04:23:20 PM »
I am speaking about how much an individual or a family actually pays in taxes.  How that is termed, and how it comes about--as a "tax increase" or whatever--is not my point.  If there is a tax cut and you end up paying more in taxes, it ain't no tax cut to you. ;)

yossarian22c

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Re: Republican Tax Plan
« Reply #114 on: December 07, 2017, 05:02:42 PM »
I am speaking about how much an individual or a family actually pays in taxes.  How that is termed, and how it comes about--as a "tax increase" or whatever--is not my point.  If there is a tax cut and you end up paying more in taxes, it ain't no tax cut to you. ;)

There is a difference in taxable income and taxes paid.

Pete at Home

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Re: Republican Tax Plan
« Reply #115 on: December 08, 2017, 11:52:56 AM »
Ever since the election, I have been fighting the lies, the hyperbole, the sophistry being laid against Trump and the Republicans. I tried to make clear that I was not paying pro-republican so much as anti lies anti hyperbole and anti sophistry. When someone started shooting Congressman on a baseball field, I said that this was because of the awful things being said about Trump, the people were being brainwashed.

But here, Trump and the Republicans have done something everything as bad as all the lies and hyperbole about them has been for months. If someone were to go shooting at them on a field today, I would shrug and say that someone had accepted their declaration of war against the American people. I personally want nothing to do with sedition or violence. I'm looking into leaving the country. Not out of protest not out of lack of love for my country but simply because I want to survive without killing or being part of a killing machine. We're facing an era of violence where neither side is right, like the Spanish Civil War we're Stalin's pawns fought Hitler's pawns. The only way to win is not to play

Pete at Home

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Re: Republican Tax Plan
« Reply #116 on: December 08, 2017, 12:06:06 PM »
Eliminating the child tax benefit, eliminating tax breaks on student loan interest, and trying to cut off any immigration bonus for this with American families... This is the most anti-family regime in IS history