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The Economist - How the Republican tax bill compares with previous reforms

Lafayette

Lafayette

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Here: How the Republican tax bill compares with previous reforms

Excerpt:
REPUBLICANS like to say that their tax bill, which passed the Senate on December 2nd, is the first tax reform since 1986. President Donald Trump likes to call it the biggest tax cut in history. Mr Trump’s claim is easily disproved (see chart). Yet the comparison with the law of 1986, passed under Ronald Reagan, is more curious. There is no doubt today’s bill, like the older one, contains significant reforms. But the differences between the two efforts stand out more than the similarities. They are not quite mirror images of each other—but they are not far off.

There are three main differences between then and now. First, the centrepiece of today’s bill is a cut in the corporate tax rate, from 35% to 20%. At first glance, this seems comparable to the change to the levy in 1986, when it fell from 46% to—after a brief delay—34%. Yet such was the volume of deductions that the 1986 reform swept away, that it in fact raised average taxes on businesses. Notably, investment incentives were sharply curtailed. Today’s bill expands them, allowing businesses to deduct the full cost of investments in the year they are made (until 2023). Many economists see these investment incentives as a powerful stimulus for the economy.

There are three main differences between then and now. First, the center-piece of today’s bill is a cut in the corporate tax rate, from 35% to 20%. At first glance, this seems comparable to the change to the levy in 1986, when it fell from 46% to—after a brief delay—34%. Yet such was the volume of deductions that the 1986 reform swept away, that it in fact raised average taxes on businesses. Notably, investment incentives were sharply curtailed. Today’s bill expands them, allowing businesses to deduct the full cost of investments in the year they are made (until 2023). Many economists see these investment incentives as a powerful stimulus for the economy. Because the reform of 1986 weakened them, and also raised capital gains taxes, the Tax Foundation, a right-leaning think-tank, reckons it might have reduced economic growth—a remarkable possibility, given the esteem in which it is held.

Today’s bill is sharply regressive, despite the fact that it barely touches the top rate of tax. That is partly because Mr Trump’s priority has been tax cuts for businesses, whose owners tend to be rich. True, the bill curbs some corporate deductions, such as a tax break for manufacturers, and another for debt interest. But these changes do not come close to paying for the size of the tax cut that Republicans propose. A look at the stock-market, which soared as the bill passed the Senate, shows that most businesses can expect to do well.
Click to expand...

When the next crisis looms regarding the National Debt, and it will arrive soon enough, we shall all know who to blame.

The US is living on borrowed time. Enjoy ... !
 
Lafayette said:
Here: How the Republican tax bill compares with previous reforms

Excerpt:


When the next crisis looms regarding the National Debt, and it will arrive soon enough, we shall all know who to blame.

The US is living on borrowed time. Enjoy ... !
Click to expand...

As it will probably have to be a Dem to that handles the next crises, I'm sure Republicans will crow about the debt. The same Republicans that passed the tax bill and the new budget will talk about the importance of fiscal austerity.
 
jdog21 said:
Sounds like we need to reduce subsidies, reduce welfare spending, and entitlements.
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lol. Why do you say that? If we can lower taxes, it must not be real times of war. Let's get rid of our artificial, wars on crime, drugs, and terror; since it Must be Real Times of Peace, if we can lower taxes and not raise them.

In consideration of the monstrous sacrifice in property and blood that each war demands of the people, personal enrichment through a war must be designated as a crime against the people. Therefore, we demand the total confiscation of all war profits.
Click to expand...
 
jdog21 said:
Sounds like we need to reduce subsidies, reduce welfare spending, and entitlements.
Click to expand...

look forward to reading what subsidies, which welfare spending, and what entitlements should be cut and how much for each. until then, i will accept this post as intentionally vague and extremely misinformed
 
Lafayette said:
Here: How the Republican tax bill compares with previous reforms

Excerpt:


When the next crisis looms regarding the National Debt, and it will arrive soon enough, we shall all know who to blame.

The US is living on borrowed time. Enjoy ... !
Click to expand...

In January, 2018, the first and only coplete month under the new Trump tax Plan, the feds collected more taxes than in any other January in history.

Is it possible that your economists were wrong?

Let me re-phrase that:

Is it possible that when reality departs from predictions of dire consequence, the predictions were wrong?

What do you offer as proof to support your call to panic?
 
iliveonramen said:
As it will probably have to be a Dem to that handles the next crises, I'm sure Republicans will crow about the debt. The same Republicans that passed the tax bill and the new budget will talk about the importance of fiscal austerity.
Click to expand...

They are true to form. Have to give them credit for that.

The Replicants refused Obama more funding in 2010 when he had successfully brought down from 10 to around 6% (at the time). They put up as an excuse, The Budget Deficit. What they wanted, however, had nothing to do with the deficit. They wanted high unemployment so he'd lose the election in 2011. Didn't work, did it?

But, that is how they think. They are impervious to both reason and what makes Most Americans better-off.

They just want the muney, muney, muney. And, by now, you'd think they've ripped-off enough. After all, in a country with 14% of its families still living below the Poverty Threshold ($24K per year for a family of four) and a Median Salary of $57.6K, that's just twice and a third more than the poverty-threshold. Who needs billionaires who will leave most of it to their kids.

With multi-billionaires by the thousands, the Income Disparity between the top-and-the-bottom is is colossally unfair. And, in hopes of opening the gates of heaven, some goes to "charity" to lessen the burden of poverty. Had that money been taxed adequately, it could be used to do some real good to diminish poverty PERMANENTLY. (For instance, government provision of free post-secondary education that will give our children the means to cope well with their own families.)

In a nation with no adequate National Healthcare Coverage (worst of developed countries, see here) and no free Post-secondary education as an escape-route for the young there is no escape from poverty ... !
 
code1211 said:
In January, 2018, the first and only coplete month under the new Trump tax Plan, the feds collected more taxes than in any other January in history.

Is it possible that your economists were wrong?

Is it possible that when reality departs from predictions of dire consequence, the predictions were wrong?

What do you offer as proof to support your call to panic?
Click to expand...

You've got a BigMoney affliction that is affecting your foresight.

The money collected from taxation is then re-spent by the government. And where does it go mostly? More than half is allotted to one, and only one, recipient. That of the DoD - see the pie-chart here.

Lotta-good that's doing for rest of us.

Just who do you think you are fooling? The answers are in the numbers, not a reflexive genuflection at the altar of the BigMoney God ... !
 
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iliveonramen said:
As it will probably have to be a Dem to that handles the next crises, I'm sure Republicans will crow about the debt. The same Republicans that passed the tax bill and the new budget will talk about the importance of fiscal austerity.
Click to expand...

And yet, in the real world, under the impacts of the new Trump Tax Cuts, January 2018 saw the highest collection of tax in history for any january and a budget surplus for that month.

Just trying to insert some real world facts into the hyperbole.

https://www.cnsnews.com/news/articl...d-taxes-first-month-under-tax-cut-run-surplus

Despite the monthly surplus of $49,236,000,000, the federal government is still running a deficit of approximately $175,718,000,000 for fiscal year 2018. That is because the government entered the month with a deficit of approximately $224,955,000,000.
​
 
justabubba said:
look forward to reading what subsidies, which welfare spending, and what entitlements should be cut and how much for each. until then, i will accept this post as intentionally vague and extremely misinformed
Click to expand...

Maybe we should just grow revenues to record levels.

You know, like we did in Janaury 2018 under the impacts of the trump Tax Cuts.
 
Lafayette said:
They are true to form. Have to give them credit for that.

The Replicants refused Obama more funding in 2010 when he had successfully brought down from 10 to around 6% (at the time). They put up as an excuse, The Budget Deficit. What they wanted, however, had nothing to do with the deficit. They wanted high unemployment so he'd lose the election in 2011. Didn't work, did it?

But, that is how they think. They are impervious to both reason and what makes Most Americans better-off.

They just want the muney, muney, muney. And, by now, you'd think they've ripped-off enough. After all, in a country with 14% of its families still living below the Poverty Threshold ($24K per year for a family of four) and a Median Salary of $57.6K, that's just twice and a third more than the poverty-threshold. Who needs billionaires who will leave most of it to their kids.

With multi-billionaires by the thousands, the Income Disparity between the top-and-the-bottom is is colossally unfair. And, in hopes of opening the gates of heaven, some goes to "charity" to lessen the burden of poverty. Had that money been taxed adequately, it could be used to do some real good to diminish poverty PERMANENTLY. (For instance, government provision of free post-secondary education that will give our children the means to cope well with their own families.)

In a nation with no adequate National Healthcare Coverage (worst of developed countries, see here) and no free Post-secondary education as an escape-route for the young there is no escape from poverty ... !
Click to expand...

How can 86% not be living in poverty if there is no escape from poverty in the US? France, Italy, Germany, Spain, UK, Portugal, Greece and Belgium also have poverty rates about (or above) that of the US.

https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html
 
justabubba said:
look forward to reading what subsidies, which welfare spending, and what entitlements should be cut and how much for each. until then, i will accept this post as intentionally vague and extremely misinformed
Click to expand...


All of them sounds good to me. Cut them all. Every single one, including SS and Medicare. You wana see prices fall. That will do it.
 
The Republicrats don't give a crap about the national debt, their ballooning deficits, healthcare, the environment, gun violence, and the American people.

They only care about campaign donations and retaining power.
 
Lafayette said:
You've got a BigMoney affliction that is affecting your foresight.

The money collected from taxation is then re-spent by the government. And where does it go mostly? More than half is allotted to one, and only one, recipient. That of the DoD - see the pie-chart here.

Lotta-good that's doing for rest of us.

Just who do you think you are fooling? The answers are in the numbers, not a reflexive genuflection at the altar of the BigMoney God ... !
Click to expand...

And how did that destination of money change due to the Surplus posted AFTER the tax cuts?

Why did you even bring this point up that is completely and entirely unrelated to anything in my post?
 
ttwtt78640 said:
How can 86% not be living in poverty if there is no escape from poverty in the US? France, Italy, Germany, Spain, UK, Portugal, Greece and Belgium also have poverty rates about (or above) that of the US.
Click to expand...

Historically, however, the US poverty-rate has remained constant at around 15%. Europe's presently high poverty-rate was caused by the Great Recession imported from the US.

Far more important is this fact: With the advent of the Information Age we are exiting the Industrial Age. Which means brains are a better quality to possess than brawn to earn a better living.

And, yet, we do nothing in the US to really support that notion. Yes, we have some scholarships and even low-cost loans. But the fact of the matter is that most are graduating from a post-secondary education with a debt of around $35K (from loans for tuition fees).

No lender is going to loan money for a post-secondary degree to someone from a family that will not be able to assume the loan repayments. So governments must do the financing - and in Europe they do. (Which in the long-term is far cheaper than paying the inevitable unemployment support for those who cannot find jobs.)

Here is the status of American educational attainment as obtained by the Census Bureau (here):
Population 25 or over - 212.1M
With high-school degree - 88.4%
Some college or more - 58.9%
Associates degree or more - 42.3%
Bachelors degree or more - 32.5%
Advanced degree - 12%

Any post-secondary degree (vocational, 2- or 4-year or more) is necessary nowadays to get a "good job". Meaning that one has the "qualifications" necessary for the higher-paying jobs. At present, above, that's only 42% of the population.

The other 58% may have a high-school diploma but no further work-training unless they get it from a company skills-program.

We are about at the same level of educational performance as a good number of other countries. (See infographic here.) Which means that in terms of work-qualifications a significant number of the developed world countries have recuperated the US level of educational performance. THAT is our competition.

Which is why I wont stop suggesting that we must get that ratio further up the ladder to assure that Most Americans have a chance to obtain decent educational levels that will provide the incomes necessary to support well a family.

Europe has the same rates as the US, but in Europe the subventions to those below the poverty threshold are greater. As well, don't forget that in Europe healthcare is nationalized and post-secondary education is nearly free. (Which is how, after the devastation of WW2, much of Europe was able to "catch-up" to the US in terms of national educational performance.)

So, two of the most important elements of escape from poverty are minimized in the US. Which is why Hillary accepted Bernie's proposition (which she adopted into her platform) to Federally subsidize post-secondary education of any family earning less than $100K annually (which is two adults working at the median income salary).

And we screwed our poorest children by voting for Donald Dork ...
 
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code1211 said:
And how did that destination of money change due to the Surplus posted AFTER the tax cuts?

Why did you even bring this point up that is completely and entirely unrelated to anything in my post?
Click to expand...

Because it is part of the debate, whether you mentioned "it" or not ...
 
code1211 said:
And yet, in the real world, under the impacts of the new Trump Tax Cuts, January 2018 saw the highest collection of tax in history for any january and a budget surplus for that month.

Just trying to insert some real world facts into the hyperbole.

https://www.cnsnews.com/news/articl...d-taxes-first-month-under-tax-cut-run-surplus

Despite the monthly surplus of $49,236,000,000, the federal government is still running a deficit of approximately $175,718,000,000 for fiscal year 2018. That is because the government entered the month with a deficit of approximately $224,955,000,000.
​
Click to expand...

Good, Labor needs a pay raise to help pay for infrastructure.

A fifteen dollar an hour minimum wage!
 
Lafayette said:
Because it is part of the debate, whether you mentioned "it" or not ...
Click to expand...

Spending money ain't collecting money. This hardly seems necessary to mention.

What I'm talking about is the change in the amount of money collected based on tax policy. AFTER the reduction in the tax rates, tax revenues increased to an all time record high for any January in all of history for any country anywhere.

What that money is spent on is not related to the methods of collecting it.

Filling my bladder pretty much assures that I'll urinate. That's like collecting the tax revenues.

Whose hat I piss on, though, has little to do with how much I drink. It determines only how wet their hat becomes. That's like spending the tax revenues. Pissing it away is NOT an accidental metaphor.

One look at the National Debt that doubles every 8 years lately reveals pretty clearly that the amount collected from our citizens is completely disconnected from the amount spent by our Legislators.
 
danielpalos said:
Good, Labor needs a pay raise to help pay for infrastructure.

A fifteen dollar an hour minimum wage!
Click to expand...

Maybe you could demonstrate how your post has any connection to what I posted.
 
code1211 said:
Spending money ain't collecting money. This hardly seems necessary to mention.

What I'm talking about is the change in the amount of money collected based on tax policy. AFTER the reduction in the tax rates, tax revenues increased to an all time record high for any January in all of history for any country anywhere.

What that money is spent on is not related to the methods of collecting it.

Filling my bladder pretty much assures that I'll urinate. That's like collecting the tax revenues.

Whose hat I piss on, though, has little to do with how much I drink. It determines only how wet their hat becomes. That's like spending the tax revenues. Pissing it away is NOT an accidental metaphor.

One look at the National Debt that doubles every 8 years lately reveals pretty clearly that the amount collected from our citizens is completely disconnected from the amount spent by our Legislators.
Click to expand...

dude; the right wing got elected on a platform of Taxcut Economics.
 
code1211 said:
That thought was wrong.
Click to expand...

And yet, in the real world, under the impacts of the new Trump Tax Cuts, January 2018 saw the highest collection of tax in history for any january and a budget surplus for that month.

Just trying to insert some real world facts into the hyperbole.
Click to expand...

Good, Labor needs a pay raise to help pay for infrastructure.

A fifteen dollar an hour minimum wage!
 
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