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House GOP releases sweeping tax overhaul plan

Anagram said:
https://www.politico.com/story/2017/11/02/tax-reform-house-gop-plan-244453

...
Overall, it's interesting. I'll have to look at it and read about it a bit more, but just glancing at it, it looks like the vast majority of lower and middle income earners will get a tax cut or stay about the same. House Ways and Means chairman says it'll add only $1.5 trillion to the deficit over ten years, but I'm wondering what type of growth rate he's assuming he'll get. The estimates I've seen before this came out made me think that a plan structured this way would be pretty far above $1.5 trillion.
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Here is an interesting piece that screws those with disabilities:
The bill includes a host of changes that will impact taxpayers in different ways. For instance, it repeals certain tax credits, including a 15 percent credit for individuals age 65 or older or who are retired on disability. Right now, those individuals can claim up to $7,500 for a joint return, $5,000 for a single individual, or $3,750 for a married individual filing a joint return.

The House bill would entirely repeal that tax credit. It would also repeal the adoption tax credit, no longer allow deductions for tax preparation and repeal credits for alimony payments. And deductions for moving expenses would no longer be allowed.

see charts
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The bill also:
Eliminates the medical expense deduction
Repeals the estate tax
Adds limits to the state and local tax deduction
Corporate rates would fall dramatically
Multinational corporations subject to a global minimum tax of 10 percent
A new tax rate for pass-through businesses
 
digsbe said:
Truthfully as the tax system is now this punishes lower tax states as higher tax ones have less income taxes by the feds. Maybe it will incentivise high tax states to lower rates and review spending.
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Those "higher tax states" send more money to the federal government than they receive and the lower tax states receive more money than they send.
 
haymarket said:
They badly need one major reform and that is to STOP discriminating on the SOURCE of income and simply tax all money going into a persons pocket or accounts according to the same schedule. Get rid of the estate tax and simply tax the money as you would income earnings. Get rid of the capital gains tax rates and simply tax it all as you would income earnings.

Does this proposal do either of those?
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So if I buy a stock in 2015 for $1000 (paid for with after tax money) and then sell it in 2017 for $1500 I should pay tax on the $1500?
 
Trippy Trekker said:
Warning! Take notice of a slight Trippy Topic detour...
Doh! 61 years old, born in Miami, raised in Florida... many grins! I'd cede the Pan Handle to Alabama for the Right Price. No matter race, party affiliation, or politics, the rest of the State has my undivided loyalty!

If I had my way, I'd change the Florida State Song to "A Pirate Looks At 40"-

If you have 7 minutes to waste, give this Buffett video a glimpse and a listen.

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I liked the intro story about the friend in the jar on the cash register. Having been in Key West a dozen times over the years - I can visualize just what the place looks like.

Buffett has always been one of those singers that I like the big hits - but so much of it sounds so alike after a while. Of course, my favorite is Springsteen and people say the same thing about his music as well. This song was pretty decent - and I too like the verse about the younger women. But then I guess we all do. ;)

Thanks for the video. :2wave:
 
faithful_servant said:
Estate taxes = the death of family owned farms. Most decent sized farms have a value over $1,000,000, so when Papa dies and leaves the farm to his daughter, she has to pay the taxes on the amount over $1,000,000. All too often that means selling the family farm to a mega-farm corp. because there isn't anyone else with the cash.
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That's covered in Krugman's Lie #2: The estate tax is destroying farmers and truckers

Tales of struggling family farms disbanded because they can’t afford the taxes when the patriarch dies have flourished for decades, despite the absence of any examples. I don’t mean examples are rare: I mean that advocates of estate tax repeal haven’t been able to come up with a single example at least since the late 1970s, when exemption levels were raised to the equivalent of around $2 million in today’s dollars.

Lately Trump has added a new twist, portraying the estate tax as a terrible burden on hard-working truckers. For who among us doesn’t own an $11 million fleet of trucks?
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Lutherf said:
So if I buy a stock in 2015 for $1000 (paid for with after tax money) and then sell it in 2017 for $1500 I should pay tax on the $1500?
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I think he is saying that capital gains should not have a separate rate, for example I think he means that the $500 capital gains on that stock would be added to your overall income.
 
faithful_servant said:
Estate taxes = the death of family owned farms. Most decent sized farms have a value over $1,000,000, so when Papa dies and leaves the farm to his daughter, she has to pay the taxes on the amount over $1,000,000. All too often that means selling the family farm to a mega-farm corp. because there isn't anyone else with the cash.
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As others have said, that's false - the exemption is $5.5 million per person, $11 million per couple.

The GOP plan is a literal dream come true for the plutocrats on estate taxes. Not only does it repeal the estate tax after 2023, but it allows heirs like Paris Hilton to avoid income tax on any appreciated property they inherit. So for example, Bill Gates has a roughly $0.00 basis in his Microsoft stock, and it's worth $84/sh just now. Let's say a son gets $10 billion worth of stock. Well, there is no estate tax due, and if the son sells $1 billion in stock the day after Bill dies, $zero, $0.00, income tax will be due. That $84/share in gain on the date of Bill's death goes poof - never subject to tax.

Compare that to some retiree who invested in Microsoft in the beginning and also has a roughly $0 basis. When she sells stock to pay for healthcare costs or housing, she'll pay capital gains tax on that $84/share gain.

If we want an American aristocracy, you couldn't dream up a tax law that would work better to creating one. It will confer massive tax advantages to the very, very richest among us who will be able to inherit massive fortunes and essentially avoid income tax forever.

I can't see this remaining in the final bill, but if it does, the $billionaire donor class got what they paid for when backing the GOP candidates.
 
holbritter said:
I'm not that happy with it either. The elimination of deducting state income tax will hurt here in NY as well
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I don't know how GOP Congress members, who represent New Yorkers, can vote for this. If they do, NY voters shouldn't vote for them in 2018.
 
haymarket said:
I liked the intro story about the friend in the jar on the cash register. Having been in Key West a dozen times over the years - I can visualize just what the place looks like.

Buffett has always been one of those singers that I like the big hits - but so much of it sounds so alike after a while. Of course, my favorite is Springsteen and people say the same thing about his music as well. This song was pretty decent - and I too like the verse about the younger women. But then I guess we all do. ;)

Thanks for the video. :2wave:
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A little more Trippy Topic Detouring -

I cut my teeth to Bruce as a 16 yr old... with his 1st album... Greetings From Asbury Park... way before he became Nationally recognized. I have an older brother born 1949... same year as Bruce. He asked me how I knew Bruce would become a Star. I figured in a matter of time other people would feel the messages behind the words and songs like I did.
 
JasperL said:
As others have said, that's false - the exemption is $5.5 million per person, $11 million per couple.

The GOP plan is a literal dream come true for the plutocrats on estate taxes. Not only does it repeal the estate tax after 2023, but it allows heirs like Paris Hilton to avoid income tax on any appreciated property they inherit. So for example, Bill Gates has a roughly $0.00 basis in his Microsoft stock, and it's worth $84/sh just now. Let's say a son gets $10 billion worth of stock. Well, there is no estate tax due, and if the son sells $1 billion in stock the day after Bill dies, $zero, $0.00, income tax will be due. That $84/share in gain on the date of Bill's death goes poof - never subject to tax.

Compare that to some retiree who invested in Microsoft in the beginning and also has a roughly $0 basis. When she sells stock to pay for healthcare costs or housing, she'll pay capital gains tax on that $84/share gain.

If we want an American aristocracy, you couldn't dream up a tax law that would work better to creating one. It will confer massive tax advantages to the very, very richest among us who will be able to inherit massive fortunes and essentially avoid income tax forever.

I can't see this remaining in the final bill, but if it does, the $billionaire donor class got what they paid for when backing the GOP candidates.
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Forget about Paris Hilton and Gates, you don't think a family with a name starting with "T" was in mind when crafting this bill? Ivanka, Eric, Baron and Junior, wouldn't have to pay a dime in estate tax. For that, I'd give up the $400,000 a year salary (presuming he didn't renege on that promise.)
 
Anagram said:
https://www.politico.com/story/2017/11/02/tax-reform-house-gop-plan-244453



Among the highlights:


-Standard deduction doubled
-Personal Exemption eliminated
-Most itemized deductions eliminated. Charitable deduction, half the mortgage interest deduction, and up to a $10,000 SALT deduction still there.
-Child tax credit increased to $1,600 from $1,000. And a $300 credit for other qualifying dependents
-39.6% rate staying for top income earners
-25% rate on certain pass-through businesses (with some safeguards to attempt to make sure individuals don't abuse this to reduce their tax rates)
-Corporate rate permanently lowered to 20%.
-Estate tax repealed after 6 years.

Overall, it's interesting. I'll have to look at it and read about it a bit more, but just glancing at it, it looks like the vast majority of lower and middle income earners will get a tax cut or stay about the same. House Ways and Means chairman says it'll add only $1.5 trillion to the deficit over ten years, but I'm wondering what type of growth rate he's assuming he'll get. The estimates I've seen before this came out made me think that a plan structured this way would be pretty far above $1.5 trillion.
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So in order to ensure the tax cut will pay for itself the GOP will need to assume a growth rate? What could go wrong?
 
lurchadams said:
So in order to ensure the tax cut will pay for itself the GOP will need to assume a growth rate? What could go wrong?
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That is how the CBO estimates work, yes. Also, I believe the growth rate that was given the CBO was 3%, not the 5-6% stated by other posters.
 
Lutherf said:
So if I buy a stock in 2015 for $1000 (paid for with after tax money) and then sell it in 2017 for $1500 I should pay tax on the $1500?
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No, and you don't now. The taxable income in your scenario would be $500 (profit), not $1500 (the gross proceeds on sale). You would pay about $100 on current LTCG rules.

While I am a huge believer in low capital gains on investment (direct investment in a business), trading stocks adds no value as it is the capital investment aftermarket. I see no reason that gains for trading stocks should be anything but ordinary income (taxed at earned income rates). So, in my world, your $100 tax would be as high as $198.
 
upsideguy said:
No, and you don't now. The taxable income in your scenario would be $500 (profit), not $1500 (the gross proceeds on sale). You would pay about $100 on current LTCG rules.

While I am a huge believer in low capital gains on investment (direct investment in a business), trading stocks adds no value as it is the capital investment aftermarket. I see no reason that gains for trading stocks should be anything but ordinary income (taxed at earned income rates). So, in my world, your $100 tax would be as high as $198.
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An additional argument is why should people who get up early and go to work have a higher tax-rate than those that have investment money working for them. It's clear that the latter group make the rules.
 
Trippy Trekker said:
A little more Trippy Topic Detouring -

I cut my teeth to Bruce as a 16 yr old... with his 1st album... Greetings From Asbury Park... way before he became Nationally recognized. I have an older brother born 1949... same year as Bruce. He asked me how I knew Bruce would become a Star. I figured in a matter of time other people would feel the messages behind the words and songs like I did.
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Great - those early Bruce albums were the best .... and I too was born the same year your brother was ..... glad you recognized genius in its early form.

btw - whats your favorite Key West place?
 
Lutherf said:
So if I buy a stock in 2015 for $1000 (paid for with after tax money) and then sell it in 2017 for $1500 I should pay tax on the $1500?
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On the profit.
 
faithful_servant said:
Estate taxes = the death of family owned farms. Most decent sized farms have a value over $1,000,000, so when Papa dies and leaves the farm to his daughter, she has to pay the taxes on the amount over $1,000,000. All too often that means selling the family farm to a mega-farm corp. because there isn't anyone else with the cash.
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Try $5.6M for an individual in 2018, with the unused exemption transferrable to the spouse.

https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax

"all too often" should be replaced with 'rarely'. First, less than 1/2 or 1% are subject to the estate tax; most plan effectively for it with insurance products or trusts. Its not hard. This impacts a very few people and the lazy element amongst that group (those that did not plan). Odd that when it comes to estate tax, the Republicans are suddenly concerned about the lazy or those that do not otherwise fend for themselves.

Is the death tax killing American family farms?

Per this article: in 2013, only 20 farms were subject to the estate tax with zero having to sell farm land to the tax.

No, the estate tax isn't killing family farms - Oct. 10, 2017
https://www.washingtonpost.com/news...state-tax-and-farmers/?utm_term=.bfe34db1c1a7

I really wish people would fact check their own impressions before posting. What it does show us is just how many people are ill-informed yet happy to stand on a soap box with their ill-informed positions.
 
faithful_servant said:
Estate taxes = the death of family owned farms. Most decent sized farms have a value over $1,000,000, so when Papa dies and leaves the farm to his daughter, she has to pay the taxes on the amount over $1,000,000. All too often that means selling the family farm to a mega-farm corp. because there isn't anyone else with the cash.
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2002 called and wants its estate tax exemption back.
 
haymarket said:
Great - those early Bruce albums were the best .... and I too was born the same year your brother was ..... glad you recognized genius in its early form.

btw - whats your favorite Key West place?
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Last time I went, New Years Eve 2008, we had five of us sail from Sarasota on a 40' Trimaran. I like staying aboard a boat on anchor, taking a dingy ashore during Winter Season or a Special Event like Fantasy Fest. Split my time along Mallory Square, the Tourist Strip, friend's boats and some time away from tourists.
 
Trippy Trekker said:
Last time I went, New Years Eve 2008, we had five of us sail from Sarasota on a 40' Trimaran. I like staying aboard a boat on anchor, taking a dingy ashore during Winter Season or a Special Event like Fantasy Fest. Split my time along Mallory Square, the Tourist Strip, friend's boats and some time away from tourists.
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So it has been nearly a decade for you. If you go back to Key West I would be interested in your impression as to if things are changing and changing fast. We have gone there about a dozen times over the last 20 years and the last time went - 2 years ago - it seemed like the number of chain stores like CVS was taking over and a lot of the local color was simply vanishing. There used to be next department store on Duvall and now its a CVS - Buffet has a place on the same block.

I am sure the locals feel its been changing for even longer than that and everybody has nostalgia for the way they first found it - but it just seemed to us that a lot of the Key West crazy charm was harder to find.
 
digsbe said:
Truthfully as the tax system is now this punishes lower tax states as higher tax ones have less income taxes by the feds. Maybe it will incentivise high tax states to lower rates and review spending.
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That would be amazing, and I think that is an end goal. But I won't hold my breath. I know people will take more notice since they lose the deduction. We'll be knocking on the Gov's mansion door soon enough. :lol:
 
Trippy Trekker said:
Warning! Take notice of a slight Trippy Topic detour...
Doh! 61 years old, born in Miami, raised in Florida... many grins! I'd cede the Pan Handle to Alabama for the Right Price. No matter race, party affiliation, or politics, the rest of the State has my undivided loyalty!

If I had my way, I'd change the Florida State Song to "A Pirate Looks At 40"-

If you have 7 minutes to waste, give this Buffett video a glimpse and a listen.

Click to expand...


Parrot heads unite!
 
MTAtech said:
An additional argument is why should people who get up early and go to work have a higher tax-rate than those that have investment money working for them. It's clear that the latter group make the rules.
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But didn't they also go to work to get the investment money?
 
holbritter said:
But didn't they also go to work to get the investment money?
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Some did, some didn't (the Paris Hilton crowd), but the question is why income from one source (investments) should enjoy tax advantages (effectively a huge tax subsidy) over income from another source (wages, or rental income or farm income or income from making things like widgets). Why not treat income as income regardless of the source or character, and tax all income at the same rates?
 
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