Author Topic: Tax Bill  (Read 309 times)

Offline Baiter

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Tax Bill
« on: November 29, 2017, 12:48:08 AM »
Some articles about details on the new Tax Bill.  IMO it's ok for taxes to go up for everyone if it resulted in surplus revenue to go toward the deficit... but it's obviously not.  But still, taxes will go up for most households, go down for the wealthy and corporations, and $1T will be added to our deficit.

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“The entire architecture of the bill is built around a permanent corporate tax cut, and everything else is meant to fit around that,” Jacob Leibenluft, a former Obama White House economist who is now at the left-leaning Center on Budget and Policy Priorities, told me.

(Several other tax experts, liberal and conservative, generally agreed with that assessment.)

Everything else — the provisions for the “forgotten men and women of our country” — could be bartered.

To comply with the Senate’s “budget reconciliation” rules, the tax bill would repeal Obamacare’s individual mandate, which would lead to higher insurance premiums and an estimated 13 million fewer Americans having health coverage. To fix the deficit problem within their own party, they have decided to make the individual tax cuts begin to expire in 2025.

Almost every independent evaluation of the House and Senate plans has found a $1 trillion tax cut for corporations and changes to the individual tax code that would benefit wealthier Americans while leading to millions of middle-class and lower-income people paying higher taxes than they do now.

This is not the populism that was promised.

https://www.vox.com/policy-and-politics/2017/11/28/16705420/senate-tax-bill-donald-trump


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WINNERS
— Wealthy individuals and their heirs win big. The hottest class-warfare debate around the tax overhaul legislation involves the inheritance tax on multimillion-dollar estates. Democrats wave the legislation's targeting of the tax as a red flag in the face of Republicans, as proof that they're out to benefit wealthy donors. The House bill initially doubles the limits — to $11 million for individuals and $22 million for couples — on how much money in the estate can be exempted from the inheritance tax, then repeals it entirely after 2023. The Senate version also doubles the limits but doesn't repeal the tax.
Then there's the alternative minimum tax, a levy aimed at ensuring that higher-earning people pay at least some tax. It disappears in both bills.
And the House measure cuts tax rates for many of the millions of "pass-through" businesses big and small — including partnerships and specially organized corporations — whose profits are taxed at the owners' personal income rate. That's potential cha-ching for Trump's far-flung property empire and the holdings of his daughter Ivanka and her husband, Jared Kushner. The Senate bill lets pass-through owners deduct some of the earnings and then pay at their personal income rate on the remainder.
— Corporations win all around, with a tax rate slashed from 35 percent to 20 percent in both bills — though they'd have to wait a year for it under the Senate measure. Trump and the administration view it as an untouchable centerpiece of the legislation.
— U.S. oil companies with foreign operations would pay reduced taxes under the Senate bill on their income from sales of oil and natural gas abroad.
— Beer, wine and liquor producers would reap tax reductions under the Senate measure.
— Companies that provide management services like maintenance for aircraft get an updated win. The Senate bill clarifies that under current law, the management companies would be exempt from paying taxes on payments they receive from owners of private jets as well as from commercial airlines. That was a request from Ohio Sens. Rob Portman, a Republican, and Sherrod Brown, a Democrat, whose state is home to NetJets, a big aircraft management company.
Portman voted for the overall bill. Brown opposed it.
__
LOSERS
— An estimated 13 million Americans could lose health insurance coverage under the Senate bill, which would repeal the "Obamacare" requirement that everyone in the U.S. have health insurance. The projection comes from the nonpartisan Congressional Budget Office. Eliminating the fines is expected to mean fewer people would obtain federally subsidized health policies.
— People living in high-tax states would be hit by repeal of federal deductions for state and local taxes under the Senate bill, and partial repeal under the House measure. That result of a compromise allows the deduction for up to $10,000 in property taxes.
— Many families making less than $30,000 a year would face tax increases starting in 2021 under the Senate bill, according to Congress' nonpartisan Joint Committee on Taxation. By 2027, families earning less than $75,000 would see their tax bills rise while those making more would enjoy reductions, the analysts find. The individual income-tax reductions in the Senate bill would end in 2026.

http://www.apnewsarchive.com/2017/The-ultra-wealthy-do-very-well-under-a-major-Republican-tax-bill-moving-in-the-Senate-as-they-do-under-legislation-passed-this-week-by-the-House/id-5c08120cd4204f1ebcb55669648f825d


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Republicans had a decade at least to come up with a comprehensive tax reform plan that achieves their goals without raising taxes on the middle class. They failed.

By 2027, poor and middle-class people will see their taxes go up across the board. People making between $10,000 and $20,000 a year, the working poor, will see their income go down by 1.5 percent. Millionaires will see their income go up by 0.4 percent

Even before major individual tax provisions expire at the end of 2025, the bill raises taxes on a significant share of people. In 2018, economist Ernie Tedeschi estimates that 11 percent of taxpayers will be paying more. The bill’s tweaks to tax brackets, doubling of the standard deduction, elimination of personal exemptions, and expansion of the child tax credit interact in sometimes unpredictable ways. Some families win, but others lose. Even in the early years, it’s not an across-the-board tax cut.

https://www.vox.com/policy-and-politics/2017/11/17/16667068/republican-tax-plan-gop-mess



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Jubilant Trump voters on Thursday celebrated the prospect of a gigantic tax cut that will benefit everyone but them.
Across the country, Trump supporters were overjoyed that, after months of gridlock and wrangling, the man they voted for was about to make Americans other than them wildly richer.
“President Trump has taken a lot of hits from the fake-news media, but he stood his ground,” Carol Foyler, a Trump voter in Ohio, said. “Today he honored his pledge to the American people, except for me and anybody I know.”
Harland Dorrinson, a Trump supporter from Kentucky, agreed. “When I cast my vote last November, I said to myself, ‘I sure hope this means that people with a thousand times more money than I have get even more money,’ ” he said. “Promise kept.”
Tracy Klugian, a Trump voter from Minnesota, said that tax cuts for everyone but him are an important step toward making America great again. “Look at the stock market—it’s been going through the roof,” Klugian, who has no money in the stock market, said.
But some Trump supporters, like Calvin Denoit, of Texas, were more muted. “Tax cuts that completely exclude me and my family are a good start,” he said. “But, until President Trump eliminates all environmental and safety regulations for corporations that I have zero stake in, I won’t be satisfied.”
https://www.newyorker.com/humor/borowitz-report/trump-voters-celebrate-massive-tax-cut-for-everyone-but-them
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Offline Yosho

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Re: Tax Bill
« Reply #1 on: November 29, 2017, 01:24:34 AM »
So 2 articles from Progressive outlet VOX, 1 satire piece from the New Yorker, and an article of proposal highlights from the AP.  We don't know what'll be in the final tax reform law, but of the items in the AP article, what do you see as the pros and cons or intent of the items listed?

Offline dug

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Re: Tax Bill
« Reply #2 on: November 29, 2017, 08:54:49 AM »
Some articles about details on the new Tax Bill.  IMO it's ok for taxes to go up for everyone if it resulted in surplus revenue to go toward the deficit... but it's obviously not.  But still, taxes will go up for most households, go down for the wealthy and corporations, and $1T will be added to our deficit.

I've posted on this topic many times and couldn't seen to find a previous post to link so here is the reader's digest version. 

I think most Americans would be good with paying higher taxes in the short-term to pay down the debt, but the fact is no matter how much money Washington takes in they will always spend more.  Period.  This year is a record for the most money collected by the government, but we still have gigantic deficits.   So I would think any reasonable person would say "Why should I give my money to them to pay down the debt when all they will do is spend it and then some."

They regularly talk a good game about how spending matters, but to them it doesn't matter, and it is an issue of both parties.  If it mattered something could have been done but instead what you get is "No Democrat-Controlled Congress Has Balanced Federal Budget in 40 Years; No Republican President Has Balanced Federal Budget in 50 Years" (the article is 7 years old so it's actually a bit worse now.)
https://www.cnsnews.com/news/article/no-democrat-controlled-congress-has-balanced-federal-budget-40-years-no-republican

So now everyone can post for their team and give justifications for why we are where we are, but ultimately Washington doesn't give a damn about your money, and why would they when everyone defends their spending and keeps voting them in to office. 
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Offline Baiter

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Re: Tax Bill
« Reply #3 on: November 29, 2017, 10:01:51 PM »
So 2 articles from Progressive outlet VOX, 1 satire piece from the New Yorker, and an article of proposal highlights from the AP.  We don't know what'll be in the final tax reform law, but of the items in the AP article, what do you see as the pros and cons or intent of the items listed?

What we do know is that this version of the bill passed the House, and has passed the procedural vote in the Senate.  We also know that what has been proposed is beneficial only to the most wealthy and does nothing to help the deficit.  It's all in Congress' own report https://www.jct.gov/publications.html?func=startdown&id=5040), which correlates with all those articles. 

It's unfortunately being marketed by Trump as giving "the American people a big, beautiful Christmas present-a massive tax cut that lets Americans keep more of their HARD-EARNED MONEY!" when the facts state otherwise.  To add to this exaggeration, they are debating whether to add provisions to automatically increase taxes if the anticipated growth goals are not met... which themselves are usually exaggerated in order to try to make this look better than the $1T it will add to the deficit, so the middle class and the poor may get screwed even further.  It's a travesty of fiscal responsibility, in the name of what, I don't know.
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Offline dug

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Re: Tax Bill
« Reply #4 on: November 29, 2017, 10:31:02 PM »
Let me try this again in very simple terms.  We don't have a tax problem in this country: the government is taking record amounts of money from the citizens  https://www.cnsnews.com/news/article/terence-p-jeffrey/1084840000000-taxes-set-record-through-january-feds-still-run-deficit

The deficit is a result of spending too much money. 

If congress could control spending we would be flush with cash but they never will because the answer is always to take more of your money.   

Estimated budget for 2017
Total Receipts: $3.21 T
Total Outlays: $3.65 T

If they cut about 12.5% of the budget it would be balanced, but when was that ever offered as an option?  Or perhaps even cut 6% this year and another 6% the next year?   I know, that is just crazy, I mean how could the federal government ever survive radical cuts like that?  Sure, federal spending is almost double what it was in the late 90's, so taking 12.5% from a 100% increase is completely insane. 
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Offline Yosho

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Re: Tax Bill
« Reply #5 on: November 30, 2017, 01:33:30 AM »
The problem is entitlements hold the budget hostage.  Unless we deal with their restructuring, we'll never get a balanced budget or get control of the debt.  I think that's politically impossible and won't happen before it's too late to matter.


Offline dug

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Re: Tax Bill
« Reply #6 on: November 30, 2017, 09:00:19 AM »
Fair point, the budget is about 2/3rds mandatory spending.  That being said when they were voting on the Bush prescription drug plan and Obamacare did it matter about the long-term mandatory spending?  Sure it was debated but ultimately it's not their money and it gives them more power to buy votes so why would they care. 

The point is still the same even though it is rigged towards mandatory spending - we still spend too much money.  Even if we just capped and/or froze all spending to limit outflow of funds and overtime inflow would catch up through economic growth and inflation.  So they can say we aren't cutting anything, but we are only going to spend this year what we spent last year. 

Let's not forget too about the money spent on interest.  Because they can't balance the budget we are spending almost the same amount on interest each year as the current budget deficit.  I've posted about this before because we are going to be in a world of hurt if interest rates ever go up because interest payments on debt could become the largest line item in the budget (not hard to do when you have 14 trillion in debt.)  Again, why do they care when they know the taxpayer is there to bail them out.

https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/


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Offline Chris

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Re: Tax Bill
« Reply #7 on: December 01, 2017, 09:28:31 AM »
I think it's great if corporations and the wealthy pay fewer taxes, if the middle class pay fewer taxes, and everyone else too, but I also think taxes and the deficit should go hand-in-hand, as tax cuts directly affect the deficit.

Increasing the deficit to give out tax breaks is irresponsible. If we're going to spend more money, we have to increase our revenue and at least try to balance the budget. If US citizens started seeing the result of their representatives' budget decisions on their taxes every year, I think we would start to see some very immediate progress with the national debt. Due to our de-coupling of the two, citizens are left apathetic or ignorant of the consequences.

So while I'd love for everyone to pay fewer taxes, we don't deserve tax cuts. Either we vote for representatives who drastically reduce the budget, or we pay out of pocket each year to balance the budget. Honestly, I think it should be a constitutional amendment; tying taxes directly to yearly spending.

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Re: Tax Bill
« Reply #8 on: December 01, 2017, 09:54:39 AM »
At the end of the day, I would be willing to bet the majority of voters could care less about the deficit.  They care about what is in their paycheck.  We are the poster-child country of living beyond our means, the land of credit and debt.  How many ads do you see or hear every day about "I owed 15K in back taxes or credit card debt, and a call to 800-xxx-xxxx reduced my debt to $43!!!"  Dug is correct, we need to reduce spending.  And the simple rule applies:  Receipts vs. Expenses-  If you reduce all sources of income tax (middle class, wealthy, big cuts to business, etc), and don't reduce spending, you will not be reducing your debt any time soon.
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Offline Baiter

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Re: Tax Bill
« Reply #9 on: December 02, 2017, 01:21:32 AM »
The problem is entitlements hold the budget hostage.  Unless we deal with their restructuring, we'll never get a balanced budget or get control of the debt.  I think that's politically impossible and won't happen before it's too late to matter.

Entitlements were in fact cut in the latest budget.  What you forgot to point out is that all budget cuts were simply shifted into increased military spending, which has questionable added value to the economy. 

What has been proven to boost the economy is getting more money into the middle class, or the poor, largely because they spend all of their money.  What has not been proven to boost the economy is any of this year's fiscal proposals or actions: increased military spending, corporate tax cuts, cutting the estate tax, cutting teacher write-offs, capping mortgage deductions, cutting deductibility of state and local taxes, increasing taxes on the poor/middle class, cutting Medicare. 
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Offline mcluvin

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Re: Tax Bill
« Reply #10 on: December 03, 2017, 11:55:06 AM »
Entitlements were in fact cut in the latest budget.  What you forgot to point out is that all budget cuts were simply shifted into increased military spending, which has questionable added value to the economy. 

What has been proven to boost the economy is getting more money into the middle class, or the poor, largely because they spend all of their money.  What has not been proven to boost the economy is any of this year's fiscal proposals or actions: increased military spending, corporate tax cuts, cutting the estate tax, cutting teacher write-offs, capping mortgage deductions, cutting deductibility of state and local taxes, increasing taxes on the poor/middle class, cutting Medicare.


Here you go, and from a Republican no less....

http://www.history.com/this-day-in-history/eisenhower-warns-of-military-industrial-complex

Offline Baiter

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Re: Tax Bill
« Reply #11 on: December 03, 2017, 09:12:17 PM »
This exemplifies our current leadership:

Quote
GOP Senator says it’s hard to fund $14 billion children’s health care program — then advocates for $1 trillion tax cut

https://www.vox.com/2017/12/3/16730496/orrin-hatch-chip-tax-bill

He's right, but by that logic there's no money for any particular program considering we run deficit spending....and the latest Senate tax bill will add an additional $1.5T additional deficit to our current levels.  I think our experiment in having a businessman at the helm has proven that it doesn't help our monetary issues...Washington is full of fiscal liberals, every last one of them.  Would Ross Perot have done the same?
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Offline Yosho

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Re: Tax Bill
« Reply #12 on: December 04, 2017, 08:40:51 PM »
Military spending is broken and needs a new model, but just the interest payments on the debt alone amount to 1/3rd to 1/2 of our current military spending, and the interest rates have been kept radically/artificially low during the last 10 years.  2008 had an interest payment of $253B while this year is $266B despite the actual debt more than doubling (from $10B to $21B).  Once interest rates go up, we're screwed.



Online ratsflif

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Re: Tax Bill
« Reply #13 on: December 06, 2017, 05:32:21 PM »
Military spending is broken and needs a new model, but just the interest payments on the debt alone amount to 1/3rd to 1/2 of our current military spending, and the interest rates have been kept radically/artificially low during the last 10 years.  2008 had an interest payment of $253B while this year is $266B despite the actual debt more than doubling (from $10B to $21B).  Once interest rates go up, we're screwed.

Need to check your B's and T's
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Offline Yosho

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Re: Tax Bill
« Reply #14 on: December 08, 2017, 01:13:52 AM »
Oops - good catch.  $10T to $21T.  Wow, that's hard to write.  I wish it was 'only' Bs and not Ts.