Republican Tax Plan

[rightleft22]

Dance Seriati Dance

[Seriati]

Lol, nothing like a substantive rejoinder to get the blood pumping, or I guess in this case the feet moving.

[D.W.]

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]

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]

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]

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]

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.

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.

[Mynnion]

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]

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]

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.]

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]

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. 

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. 

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.

[TheDrake]

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]

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]

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]

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]

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

[Seriati]

Interesting follow-up on the international response to the tax bills:

https://www.wsj.com/articles/european-finance-chiefs-hit-out-at-u-s-tax-plans-1513000469

Fairly balanced as well.  Nut shell is that both Europe and China are panicking and preparing tax responses to prevent investment from flocking to the US.  Seems an odd response if you guys are correct and I'm completely wrong.

[yossarian22c]

Interesting follow-up on the international response to the tax bills:

https://www.wsj.com/articles/european-finance-chiefs-hit-out-at-u-s-tax-plans-1513000469

Fairly balanced as well.  Nut shell is that both Europe and China are panicking and preparing tax responses to prevent investment from flocking to the US.  Seems an odd response if you guys are correct and I'm completely wrong.

I don’t think anyone here has argued that the tax cuts aren’t good for businesses and the wealthy. The argument I have been making is that the tax cuts do not benefit the average person (particularly those in blue states). Taxing tuition wavers and eliminating the tax deduction for medical expenses seriously hurts a lot of low income people.

[TheDrake]

Fairly balanced as well.  Nut shell is that both Europe and China are panicking and preparing tax responses to prevent investment from flocking to the US.  Seems an odd response if you guys are correct and I'm completely wrong.

As Yossarian said, GDP and dividends can go up sharply without making a dent in a particular person's hourly wage. Additionally, I made the point a couple of eons ago in this thread that attractive export economics are a big result of reducing corporate tax. That says very little about how different subgroups will fare, or the specific claim that it will "raise wages".

[D.W.]

I read something about this plan driving up the value of the dollar, which in turn hurts exports.  Is this just a minor "won't be as good as you hope" nay-saying?  Or is their any merit to this line of thinking? 

On the wages front, our market is already as competitive and qualified as ever, yet wage growth hasn't reflected this.  As unemployment numbers go down, you would think compensations should go up.  But maybe this is going to be the silver bullet.  Maybe this town trickle down economics will save the day...   

I'm not against making us more attractive from a global perspective, but the sham salesmanship BS on this bill is annoying. 

[Wayward Son]

FiveThirtyEight had an interesting article on the effectiveness of the GOP tax plan to stimulate the economy.

Gary Cohn, director of the National Economic Council and one of the “Big Six” Republicans behind President Trump’s tax rewrite, was on stage at The Wall Street Journal’s annual gathering of business executives in Washington last month defending the plan...

The host from the Journal asked the audience for a show of hands: Who would use the tax windfall to invest more in their companies?...

[T]he response from the impromptu focus group at the Journal event was muted; only a smattering of the assembly’s members indicated they would use the proceeds from a tax cut in a way that would produce a stimulative effect.

“Why aren’t the other hands up?” Cohn asked.

Here’s one answer: Cohn and others in the Trump administration might have oversold the potential benefits of their tax plan. One big reason that the legislation won’t supercharge the economy is that the tax cut isn’t as big as it looks on paper.

The articles goes on to explain:

[T]hanks to a bevy of deductions, few American corporations actually pay 39 or even 35 percent. Estimates vary, but Kent Smetters, the Wharton School professor who runs the Penn Wharton Budget Model, said in an interview that he reckons the average effective rate that U.S. corporations pay is around 22 percent...

The average rate paid by money-making, publicly traded companies at the start of the year was about 26 percent, according to calculations by Aswath Damodaran, a finance professor at New York University’s Stern business school. Most of the rates ranged from about 7 percent for software companies to just under 39 percent for the retail sector.

Therefore, the change in the statutory rate is a crude way to estimate how companies would respond to the proposed tax law: Some industries would see a sizable windfall, others a small gain, and some companies would see no gains at all.

Another complicating factor is that companies that pay the corporate rate account for only about half of total business income. The rest is generated by “pass-through companies,” which tend to be smaller businesses where the owner or owners are taxed at personal rates...

The five biggest banks would have saved more than $11 billion in 2016 if they paid an effective tax rate of 20 percent, which was the rate originally proposed in the bills passed by the House and Senate. That was significantly more than any other group of publicly traded companies would have saved, according to an analysis by S&P Global Market Intelligence.

And it turns out that the banks are an excellent example of why there’s so much skepticism about the Republican tax plan. American corporations have been piling up profits in recent years, yet labor’s share of corporate income has been on a steady decline. There is academic support for the view that reducing corporate taxes could trigger job and wage growth. But in the real world, it seems unlikely that banks would use their tax cut to go on a hiring spree, as they have reduced their headcounts over the past decade. They might instead choose to take those billions and do more lending. Or they might give most of it back to their investors.

Bank of America chief executive officer Brian Moynihan, for one, noted in his letter to shareholders this year that the company had raised its minimum wage to $15 an hour. But his priority clearly was to use profits to repurchase the shares the company issued when it needed money to survive the financial crisis. “We need to continue to reduce the number of shares outstanding,” Moynihan said. “This is essential if we want our stock price to exceed the record highs we have achieved...”

Advocates such as Cohn say individuals will benefit when corporations come back to the United States once the corporate tax rate is more in line with that of the rest of the developed world. “I would like to get the tax rate as low as possible so that businesses want to create jobs here,” he told the Financial Times in August. But even the tax cuts in the GOP bill may do little to help achieve that, as the companies that left are probably already paying rates of around 20 percent.

According to an analysis by the Congressional Budget Office using for data for 2012, the median of the average corporate rate paid in 17 big economies was 20.4 percent.

There is one other factor that hasn't gotten enough attention:  inflation.  With this sudden influx of money into the American economic system, prices may increase greatly, especially if companies decide to invest their windfall in real property rather than in innovation and salaries.

What really worries me right now is how many companies will repurchase stock to raise their "stock price to exceed the record highs we have achieved."  This could create a stock price bubble, which it feels like we are having right now.  (What is the current stock price/company value ration?)

[Crunch]

There is one other factor that hasn't gotten enough attention:  inflation.  With this sudden influx of money into the American economic system, prices may increase greatly, especially if companies decide to invest their windfall in real property rather than in innovation and salaries.

If the vast cash injections of QE1 and QE2 didn't cause inflation, I'm hardly concerned about a corporate tax cut causing it.

What really worries me right now is how many companies will repurchase stock to raise their "stock price to exceed the record highs we have achieved."  This could create a stock price bubble, which it feels like we are having right now.  (What is the current stock price/company value ration?)

This has been happening since QE1 and QE2, that's what a lot of companies did with the money. That's why, while the Obama economy was flat, stock prices continued to go up after the initial shock. None of these companies will want to buy so fast they make the stock unaffordable for their buyback. They'll slowly buy back over a period of years. But, if you think it's a bubble about to burst, you can time it and short stocks and get rich. Kind of a win for you either way they go if you want to take advantage of it - I'm sure those that are in a position to do so, will. Assuming this scenario comes to pass. The beauty of the market is it's self correcting as long as the government doesn't artificially manipulate it.

[Wayward Son]

There is one other factor that hasn't gotten enough attention:  inflation.  With this sudden influx of money into the American economic system, prices may increase greatly, especially if companies decide to invest their windfall in real property rather than in innovation and salaries.

If the vast cash injections of QE1 and QE2 didn't cause inflation, I'm hardly concerned about a corporate tax cut causing it.

As I understand it, QE1 and QE2 occurred during the recession, which is a different environment than today.

What really worries me right now is how many companies will repurchase stock to raise their "stock price to exceed the record highs we have achieved."  This could create a stock price bubble, which it feels like we are having right now.  (What is the current stock price/company value ration?)

This has been happening since QE1 and QE2, that's what a lot of companies did with the money. That's why, while the Obama economy was flat, stock prices continued to go up after the initial shock. None of these companies will want to buy so fast they make the stock unaffordable for their buyback. They'll slowly buy back over a period of years. But, if you think it's a bubble about to burst, you can time it and short stocks and get rich. Kind of a win for you either way they go if you want to take advantage of it - I'm sure those that are in a position to do so, will. Assuming this scenario comes to pass. The beauty of the market is it's self correcting as long as the government doesn't artificially manipulate it.

Yes, and those who can afford to short stocks are doubtlessly counting on it.

But what about all those workers who have their 401Ks invested in stocks?  They probably will be the ones who will suffer the loses.

Which doubtlessly is what some people are counting on.

[Crunch]

There is one other factor that hasn't gotten enough attention:  inflation.  With this sudden influx of money into the American economic system, prices may increase greatly, especially if companies decide to invest their windfall in real property rather than in innovation and salaries.

If the vast cash injections of QE1 and QE2 didn't cause inflation, I'm hardly concerned about a corporate tax cut causing it.

As I understand it, QE1 and QE2 occurred during the recession, which is a different environment than today.

There were actually a total of three QE efforts amounting to about $12.3 trillion and then some total with QE3 ending on October 29, 2014. The recession officially ended in 2012, while QE3 remained in full force. I don’t think the tax cut will put that much capital into play over that length of time.

What really worries me right now is how many companies will repurchase stock to raise their "stock price to exceed the record highs we have achieved."  This could create a stock price bubble, which it feels like we are having right now.  (What is the current stock price/company value ration?)

This has been happening since QE1 and QE2, that's what a lot of companies did with the money. That's why, while the Obama economy was flat, stock prices continued to go up after the initial shock. None of these companies will want to buy so fast they make the stock unaffordable for their buyback. They'll slowly buy back over a period of years. But, if you think it's a bubble about to burst, you can time it and short stocks and get rich. Kind of a win for you either way they go if you want to take advantage of it - I'm sure those that are in a position to do so, will. Assuming this scenario comes to pass. The beauty of the market is it's self correcting as long as the government doesn't artificially manipulate it.

Yes, and those who can afford to short stocks are doubtlessly counting on it.

But what about all those workers who have their 401Ks invested in stocks?  They probably will be the ones who will suffer the loses.

Which doubtlessly is what some people are counting on.

They can rebalance their 401k anytime thry want, choosing funds that manage to the market, even move them into cash positions. I’ve done this with mine several times.

[TheDrake]

But what about all those workers who have their 401Ks invested in stocks?  They probably will be the ones who will suffer the loses.

Anyone who has a 401k has not only access to professional advice, but also has a very limited set of funds to choose from. It's investment-lite. Each fund is stamped with "Growth", "Risk", "Income".

Index funds rarely do poorly over the long run, but even so there are bond funds and other hedges even available to the unsophisticated investor in a restricted 401k.

The vast majority of Americans, however, have little to no savings of any kind. Others, like the saps at Enron, left their retirement undiversified in their own company stock. It is up to them to either invest wisely on their own, or seek advice from someone more knowledgeable. Any CPA can help someone with that, and if you have tens of thousands of dollars in savings, you probably can pay the $150 for them to explain your options.

[Wayward Son]

They can rebalance their 401k anytime thry want, choosing funds that manage to the market, even move them into cash positions. I’ve done this with mine several times.

Sure, Crunch, but how quickly can you do it?

If the stock market suddenly takes a dive, how quickly can you move those funds?  Mine takes a couple of weeks, at a minimum.

Rich individual investors, anticipating a bubble burst, can tell (or simply program) their brokers to sell once the market hits a certain low, getting out before it drops too much.  You, on the other hand (unless your 401K is more responsive than mine), will only get out after most of the drop has occurred.

Until that time, the 401Ks will be buying those stocks that the rich investors are dumping.

So unless you get out now (basically short selling your stock in anticipation of a plunge), you're going to be financing the rich investor's profits.

Which the new tax bill now limits to 23.8% tax rate.

[TheDrake]

So you're good at timing the market on a daily basis, Wayward? All the science I've seen on it suggests that people who leave all their money alone in a broad index fund fare better than the wizardly fund managers. I'm not sure why you think that the guys managing a Vanguard 401K fund are somehow less attuned to market risk than some goofy rich individual investors. Believe me, they have stop losses in there as well as derivatives for protection. The only handicap they have is the inertia of a large fund, getting out of substantial positions poses a market liquidity problem.

Short selling stock is a fantastic way to lose your money, especially if you're timing it to a near term event. Since you said "get out now", I'm assuming that you are not really short selling, but rather just selling.

Most 401k allow for close to daily moves in their mutual funds. I'm not sure why a 401k asset reallocation should take days let alone weeks. Prudential and other bigger boys are practically etrade. If you are filling out a paper form and giving it to HR, your company is doing it wrong.

[Seriati]

Has anyone noticed how much this debate has been influenced by media manipulation?  I was reading today, that in some polls more than half the country is "against" it, and that over a third of the country think their taxes "will go up".  The objective measures indicate that 80% of people are getting a tax cut, and that somewhere around 5% will see an increase. That means that 95% of people are getting either a cut or no material difference, how then do over a third have the view that their taxes are going up?

Pretty much because they've been reading misleading media sources, or even ones that are flat out lying.  CNN has been ultra focused on the sunset clause, as if the idea that someone's taxes will reset at some future date to what they pay now should be seen as a "tax increase" that should be scaring them away from potentially 10 years of cuts. 

Uniformly they undersell the impact of growth that is expected to be generated from lower taxes in all projections of the impact on the debt.  They ignore most research on this point.  They completely ignore the international response, which not only is based on treating such research as fact rather than as theory, but the international projections of "responses" to the situation.  Is global consensus and cutting edge science only relevant in environmental debates (where I note, unlike in this debate, most countries pay lip service to the science but do not set their policies in a manner treating it as fact)?

I'd be interested on thoughts in two scenarios.  First, what if I'm correct, and this delivers tax cuts to 80% of the population, sustained economic growth and raises, what's the impact going to be on national politics and your own view of the situation?

Second, what if you don't think I'm correct, where is this going to go off the rails, how's it going to hurt and who's it going to hurt (particularly interested if you dispute the tax benefit to 80% of the population, what vector you identify for that)?

[TheDrake]

Part of the perception problem is lag and selective propagation of bad news vs good.

The media correctly reported that proposed legislation was going to tax graduate students more. Then grad students and supporters blasted the internet of the terrifying consequences. When it was removed from the final bill, those same people were not as motivated to propagate the good news that it had been pulled out. That's not the only provision that was in there, SALT had been proposed as an elimination rather than a cap, and child tax credit was improved in the final bill.

So, everyone remembers the news they heard that scared them. This is a well known phenomenon called the “loss aversion” principle. And, people don't have up to date information. Part of rushing a bill through is a lack of time to communicate what is in the final legislation, some blame resides in that process for why people have a negative opinion.

I think that people will continue to believe what they want to believe. If they think the cuts were a bad idea, they will find data to explain any upside as independent or they will focus on the people who were on the losing end of the equation - no matter what their numbers versus the winners. Or they will focus on how much bigger the win was for the billionaire class. Or they will talk about how the ensuing tax war has ruined our relations with other countries.

I'm personally rather lukewarm on the bill. I don't see anything in it that I truly hate, my personal tax situation is unlikely to change dramatically, and I doubt there will be any significant near-term impact.

[Seriati]

Here's a perfect example, the lead opinion piece on the NYT https://www.nytimes.com/2017/12/20/opinion/tax-bill-gop-democracy.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region&region=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region.

Unless I'm misreading this, the opinion piece is a giant diatribe arguing that supporting tax cuts means you hate Democracy.  You read that right, letting people keep their money, frustrates the "democratic" goal of redistributing all existing property to the proleteriate, I mean the people, interfering with their right to "vote" to take others property, and hence, Republicans have proven they hate "democracy" by supporting tax cuts.  Pretty much an exercise in linguistic sophistry, propaganda and 1984 style argumentation.

[TheDrake]

You found an opinionated Op-Ed contribution. Congrats.

[NobleHunter]

And manages to miss the key reason why the tax cut bill represent utter contempt for democracy.

[Wayward Son]

It wasn't so much the media's fault that most Americans think they won't get a tax decrease, it's the Republicans' fault.

A more likely factor is that many people don’t understand the bill very well. Compared to other legislation of similar scope, including previous changes to the tax code, this bill moved through Congress at a breakneck pace. That was a political calculation, in two ways: First, Republicans were eager to notch a legislative victory before the end of the year, after a chaotic and frustrating 2017, and they wanted to meet Trump’s deadline for a tax cut before the end of the year. Second, GOP leaders figured that moving the legislation quickly would make it hard for the bill’s opponents to rally against the bill. They’d watched Democrats sink repeated attempts at Obamacare reform, and they recalled their own months-long battle to undermine Obamacare at its inception.

The rush succeeded, defying the widespread conventional wisdom that passing legislation by the end of the year was impossible. But while it solved some political problems, it created others. First, there’s been little time for anyone to understand what’s in the bill, much less how it will affect their own pocketbooks. It’s hard to blame ordinary Americans: Even Republicans involved in the drafting don’t understand it. On Tuesday, HuffPost’s Matt Fuller asked 18 members before he was able to get one to name the brackets in the new bill; House Ways and Means Chair Kevin Brady said he knew them but wouldn’t say what they were. Senator Bob Corker, accused of flipping to support the bill after a provision was added that would personally benefit him, defended himself by saying he hadn’t read the bill. If the people who passed the bill haven’t read it and can’t understand it, it’s no wonder that the public doesn’t either.

Another consequence of the contracted legislative process was that the bill contained, at various times, a range of improbable or politically ill-advised provisions. This included, for example, eliminating the ability to deduct taxes paid to state and local governments, a provision that would have slammed graduate students, and another that would have eliminated a deduction for teachers who purchase classroom supplies. The latter two of these ideas encountered harsh pushback and were ultimately dropped from the final bill, while the final bill opted for a $10,000 cap on the state-and-local tax deduction. The focus on these provisions and others like them hurt the bill’s approval and fostered the impression among various parts of the populace that they might be punished rather than rewarded by the new tax code.

Though Democrats could not stop the bill, their messaging, much maligned in recent months, won the day. They were successfully able to convince the public that the bill was geared toward giving corporations a huge, permanent tax cut, while giving individuals only a temporary one; and that the benefits of the bill would accrue overwhelmingly to wealthy taxpayers. This message had the virtue of being true, and it drowned out the GOP message of a tax cut for nearly everyone, at least in the immediate term. In the NBC/WSJ poll, respondents were correctly able to say that wealthy Americans and corporations would pay lower taxes, but pluralities believed that both their own families and middle-class families in general would actually pay more.

Republicans complained that Nancy Pelosi said that you had to read the completed ACA to know what was in it, and it took months to write that bill, not weeks for this GOP tax bill.  We really had no idea what was in the bill until the final vote.

And it has not simplified taxes at all.  Sure, they almost doubled the standard deduction, but then they eliminated the $4050 personal deduction, which took most, if not all and more, of the standard deduction decrease.  If not for the reduction in the various tax brackets, I would be paying more in taxes in 2018 because of this tax cut.  (As it is, it looks like I might save a couple of thousand in taxes next year, if my understanding of the bill and my calculations are correct.)

If the Republicans wanted the American people to understand this tax bill and how it would have benefitted them, they would have given us time to understand it before voting on it.  But they didn't give us time, so don't blame the media for not reporting correctly on a bill that in flux the entire time and no one understood until it was passed.  Because you can't correctly report on something no one understands.

[Seriati]

Lol, if you didn't know what was in the bill it wasn't because of secrecy.  There have been dozens of write-ups on the provisions, including of the House Bill, the Senate Bill and the Conference Bill.  Almost nothing in the final bill wasn't signaled multiple times and in multiple places.  You know what's been constant through out?  A tax decrease for the majority of citizens.  This is nothing like Obamacare where it was done in secrecy.  Don't fall for spin, if you didn't know the details it isn't because they weren't available, or even because they changed to too fast, it's because you read media sources that didn't want you to know them.

The real issue about why it didn't stay simple has to do with the complete unwillingness of a handful of Democrats to cross the aisle.  5 Democrats being reasonable would have prevented most of the back room horse trading that was required to bring in the last five most unreasonable Republicans.  You can't tell me someone like Joe Manchin voted his constituents best interests

[LetterRip]

Seriati,

Lol, if you didn't know what was in the bill it wasn't because of secrecy.

It was a 1000 page bill with final changes shortly before the Senate vote.  I looked and there wasn't a version online prior to the vote.  There were only vague claims about what was in the bill.  It certainly wasn't available for any reasonable amount of time for public scrutiny.

[TheDrake]

I guess you nailed us. You've totally proven that the only way anybody might respond negatively to this bill is through the malevolent manipulation of the media or willful ignorance. 

[DonaldD]

The real issue about why it didn't stay simple has to do with the complete unwillingness of a handful of Democrats to cross the aisle.  5 Democrats being reasonable would have prevented most of the back room horse trading that was required to bring in the last five most unreasonable Republicans.

This presupposes that the effects of the "back room horse trading" are worse than the fundamentals of the budget proposal, whereas the truth is that the billed is fundamentally flawed, kowtowing as it does to ridiculous electoral promises, and being rationalized only by voodoo economics and even then still leading to massive increases in structural deficits.

[TheDrake]

34. Businesses won't be able to write off sexual harassment settlements.
New Jersey Democratic Senator Bob Menendez's amendment born of the #MeToo moment made it all the way through. Companies can no longer deduct any settlements, payouts or attorney's fees related to sexual harassment if the payments are subject to non-disclosure agreements.

That one I didn't know about. I like it.

[Seriati]

I may have to book mark this thread so you guys can't slip away from the statements you've made.

So let me get this straight.  Notwithstanding that an overwhelming majority of Americans are getting a tax cut or at worst no worse off, you seem to think that they will have taxes rise?

It's "voodoo" economics that the corporate tax rate will help the economy, keep in mind, in less that 12 hours from passage we'd already had almost a billion dollars in bonuses, raises and reinvestments announced.  Nevermind that if you know any one in management of a major company they have been saying the same thing.  Nevermind, that international opinion is uniformly of the view that they will have to respond to stay competitive.  It's all your conclusions that this is some kind of Republican trick?

Lol, by the way, just saw an article on Joe Manchin having to defend his vote in his home state because the law actually benefits virtually everyone there (just like I pointed out yesterday). 

Not sure why you couldn't find accurate information, both the house and senate bills were publically available, as were conference reports.  I had multiple real time updates based on changes (granted some were speculative) but overall the principal concepts as well as the direction and big goals have been in there a really long time.  Maybe the difference is that i was not relying on news sources, but that just proves the point doesn't it?  LR search for "conference reports" on the tax bill.

What am I misunderstanding?  What are you opposed to?  Lower taxes?  Economic growth?

[rightleft22]

I'll gladly repay you Tuesday for a hamburger today – Wimpy
The ground work for the next financial melt down is firmly in place – not to worry though a democrat will be president when that bill will have to be payed.  How shocked we will all be, how could this happen… again...

A fool and his money will soon be parted. Live it up now, get yours now, for gods sakes don’t delay any possible immediate gratification for tomorrow… our children will deal with it.

[Wayward Son]

This is nothing like Obamacare where it was done in secrecy.

Pop quiz, Seriati: how many hearings were held for the Affordable Care Act?  How many months was the process of public discussion and negotiation?

Now, how many hearings were held for this tax cut bill?  How many months was the process of public discussion and negotiation?

Look it up, Seriati, since you've seen to have forgotten them.  Let the numbers speak for themselves.

You are right, this is nothing like the secrecy of the development of Obamacare.  This was done SO much more secretly, there is no comparison.

Republicans don't give a **** about letting people know what they are doing.  They want to get it done before anyone notices or knows what they are doing.  They don't even know what they've done.

And any criticism of Democratic secrecy is obviously pure partisan, hypocritical BS.

[Seriati]

Obamacare secrecy was an issue because it highlighted a big lie by the new administration.  You know the promise to be the most transparent administration in history (lol) and to publish the final text of a bill in advance for the American people to review.  Pretending that this bill is more secret because it moved faster is just ridiculous.  Point out to me the provisions that are in the final bill that were a great big surprise.

Do you trust CNN?  They didn't tell you much of the details, but they still managed to find the time to use the bill to generate a calculator so you could see the impact (and to focus on the future expiration provisions to try and sell you that the tax cut was hurting you).   How did they know enough to be able to produce a mini-app, but not enough to accurately report it?

[TheDrake]

What am I misunderstanding?  What are you opposed to?  Lower taxes?  Economic growth?

For myself, I've stated that I'm lukewarm about this. From a growth side, I'm fearful that many companies will spend the windfall on stock buyback and dividends that will please investors but not materially increase opportunity, with the net impact of increasing savings that will be even easier to pass on to descendants with the raising of estate tax limits.

I'm generally fearful of the higher deficits, but possibly even more fearful that these higher deficits in turn will be used to justify draconian cuts in various government agencies and programs (never military or border patrol of course)

And as far as secrecy goes, remember all the Obamacare townhalls, discussion of death panels and the like? Did I miss a bunch of these inviting feedback about the tax bill? No, because there wouldn't have been time to book the flight and have the discussion before voting.

[Seriati]

TheDrake, and what do you mean by "savings"?  Walk me through it, how are they going to be passed on to another generation?  In mattresses?  Boxes of gold?   How do these savings survive the next 10, 20, 40 years until they are passed on?  Do you think, maybe, that those who recieve them may use them like they do now?  You know, with the majority going into new investments that generate return?

Deficits concern everyone (though not mentioned when the Dems want to spend more), the entire argument though is that its a false claim.  There's almost no uncertainty that the corporate tax cuts are going to result in a non-zero amount of new investment and a non-zero amount of real wage increases.

[Seriati]

As far as townhalls, don't think they are going to be a part of future Republican plans.  The blatant manipulation by activists and the anti-Republican bent of the media makes it far too easy, as demonstrated by this Tax bill, to turn a big chunk of the population against things that expressly to their benefit.  Bad photo-ops are not the same thing as bad policy, but only a fool would continue to try and get a fair treatment from town halls after the way they have been manipulated.

[Crunch]

What are you opposed to?  Lower taxes?  Economic growth?

It’s very hard to get the full measure of this tax reform. It’s always complicated when things run into the 1000+ pages that amend the tens of thousands of pages of the current tax code. Add in the rabid hysteria in the media and the left and it’s impossible to get a straight answer. By the way, anybody see where Rosie O’donnel tried to bribe senators? She should be arrested.

The latest analysis I saw was that 80% of Americans will see a reduced tax burden with middle class taxpayers seeing the biggest benefit, some as much as 20%  - lower classes than that pay little or no federal income taxes so kind of hard to cut but they are set for deductions that will give them a bonus at tax time. Because of the way the tiered system works, by definition a tax cut for lower brackets applies to upper brackets (impossible to change that really) but the top tiers are seeing cuts around 1%.

Given the hysterics from the media and the left, this must be pretty good for America.

[DonaldD]

create schedule for production

It's "voodoo" economics that the corporate tax rate will help the economy, keep in mind, in less that 12 hours from passage we'd already had almost a billion dollars in bonuses, raises and reinvestments announced.  Nevermind that if you know any one in management of a major company they have been saying the same thing.

https://www.washingtonpost.com/news/wonk/wp/2017/11/14/why-arent-the-other-hands-up-a-top-trump-advisers-startling-response-to-ceos-not-doing-what-hed-expect/?utm_term=.f6806b17d245

President Trump's top economic adviser, Gary Cohn, looked out from the stage at a sea of CEOs and top executives in the audience Tuesday for the Wall Street Journal's CEO Council meeting. As Cohn sat comfortably onstage, a Journal editor asked the crowd to raise their hands if their company plans to invest more if the tax reform bill passes.

Very few hands went up.

Cohn looked surprised. “Why aren't the other hands up?” he said.

Do I know these people personally?  No.  But this was a friendly room that came to listen to Cohn, so...

[Seriati]

Lol, that same article has been cited for weeks as if it were proof. Corporate leaders are looking for certainty, they got some and have started to respond.  Of course, those on the left are trying their best to undermine it. Notwithstanding even the great Obama admitted corporate rates were too high, darling Bernie has promised to raise them back when the Dems are back in control. 

Face it, Dems - as a block - voted against the middle class.  There's no way around that other to lie about what they were doing.

[DonaldD]

What seems to be consistently ignored is the other part of the equation.

Yes, in general, lowering taxes will have some beneficial effect on the economy (although some taxes have the effect of reducing rent seeking, so are themselves beneficial to the economy and removing them could in fact be a negative.)

But never has a US tax reduction paid for itself from the perspective of government deficits.  Which brings us to the other side of the equation: deficits.  Long term, who will be most affected by the resulting clawback of services and entitlements?  What other effects might there be (for instance, with the removal of the ACA mandate/penalty)? 

It's pretty clear that the negative effects of this tax plan are not going to be borne by the wealthy.