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Thread: House GOP Tax Reform Plan

  1. #311
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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by Mac77 View Post
    In your previous post you referred to gross income

    If you meant net that makes a big difference
    You're confusing me with someone else, and obviously taxes are imposed on net or taxable income, so I'm sure that person just misspoke, and everyone reading knew that, or should have.

    Furthermore, I'm addressing YOUR comment that an income tax leaves corporations with no profits, and being unable to pass the income tax to customers will eventually lead to a zero stock price, and those are just FALSE statements.

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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by Geoist View Post
    Much as there is debate over whether we live in a geocentric system vs. heliocentric system.
    Whatever. Moving on.

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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by JasperL View Post
    You're confusing me with someone else, and obviously taxes are imposed on net or taxable income, so I'm sure that person just misspoke, and everyone reading knew that, or should have.

    Furthermore, I'm addressing YOUR comment that an income tax leaves corporations with no profits, and being unable to pass the income tax to customers will eventually lead to a zero stock price, and those are just FALSE statements.
    I don't think corporate taxes take away from the bottom line of corporations assuming all the other companies in the market pay the same tax

    Because they all just pass the tax along to the consumer

  4. #314
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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by Mac77 View Post
    I don't think corporate taxes take away from the bottom line of corporations assuming all the other companies in the market pay the same tax

    Because they all just pass the tax along to the consumer
    That's the problem - they don't pay the same effective tax rate. I've pointed it out several times now - seen the studies, know the tax rates in an industry range WIDELY. Some aren't even organized as C corporations and so will only pay individual tax, others are part of global conglomerates with many lines of business, some of them allowing for significant tax planning schemes, and some competitors will be foreign companies with higher or lower tax burdens than U.S. companies, etc.

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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by Mac77 View Post
    I don't think corporate taxes take away from the bottom line of corporations assuming all the other companies in the market pay the same tax

    Because they all just pass the tax along to the consumer
    but they DON"T PAY THE SAME TAX:

    Even if they pay the same marginal rate.. the actual AMOUNT of tax will differ depending on how much profit before taxes they make.

    I made 100,000 in profit before taxes and paid 40,000 in tax

    My competitor made 60,000 before taxes and paid 24,000 in tax. Same marginal rate.

    Please explain how they are paying the same tax they can pass on to the consumer. I would have to pass on a greater cost to my customers.. making my products less competitive than my competitors.

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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by Mac77 View Post
    I don't think corporate taxes take away from the bottom line of corporations assuming all the other companies in the market pay the same tax

    Because they all just pass the tax along to the consumer
    Taxes are not passed onto the consumer in the form of higher prices. As proof, General Electric hasn't paid federal income taxes in at least a decade. Are GE's prices to their customer's any less expensive compared to their competition that pays taxes? No.

    David Cay Johnston
    explains:

    Taxes are on profits, and profits are calculated at the end of a tax year by adding up all the revenue and subtracting all the costs. When a product or service is sold the company doesn't really know yet how much profit, if any, it will have at the end of the year, so it doesn't know what the tax will be, so how can it adjust prices? But if a company was able to just raise prices based on anticipation of profits, then the result would be that profits would be higher because of the higher price charged, which means taxes would be even higher, so the company should have raised prices even more, but that means the profit would be even higher, so they have to go back and charge more, but then ... I think you are starting to see how silly this idea of raising prices to cover taxes can get.
    The reality is that a business always charges the most it can charge to maximize revenue and profits. Economist call this the peak of the price demand curve. If they raise prices, demand falls enough to reduce revenues and profits. If they lower prices, demand increases but total revenue falls because of lower pricing.

    Apple charges hundreds of dollars for an iPhone, even though it costs less than $50 to manufacture an iPhone. Demand dictates the price. Does anyone really think Apple would drop the price of iPhones if Apple's taxes were lower? Of course not. If Apple's tax bill was lower, the savings would go to Apple and its shareholders, not consumers.
    "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it." --J.S. Mill

  7. #317
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    Re: House GOP Tax Reform Plan

    Quote Originally Posted by jonny5 View Post
    This is actually a plan theyve had for about a year.

    -reduce tax brackets to 3
    -tax cap gains at ordinary income rate with a 50% exclusion
    -increase standard deduction
    -increase child tax credit
    -eliminate all deductions except mortgage and charity
    -eliminate AMT
    -eliminate estate and gift taxes
    -lower corp taxes

    I think its a step in the right direction, but still too complicated. Multiple brackets, multiple deductions (and others will creep back in), too many credits that will take people off tax rolls all together. Tax Foundation says it will reduce revenue by 2 trillion over 10 years without factoring in stimulus effect. -200 Billion when estimating stimulus effect (higher income tax, lower corp taxes). More jobs, investment, wages, tax savings, though.

    The biggest problem will be political. Liberals will not accept any tax plan that reduces taxes for corporations or the rich, even if it helps everyone else as well, and the economy as a whole. And of course the media will run with the 2 trillion dollar 'cost' as if nothing else is happening.

    https://taxfoundation.org/details-an...x-reform-plan/
    It's got some good and some bad. I like the simplification. I dislike that capital gains, estate, and gifts are still treated differently than ordinary income. All three should be taxed at standard income rates with no special treatment.
    If you build a man a fire, he'll be warm for a day.

    If you set a man on fire, he'll be warm for the rest of his life.

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    Re: House GOP Tax Reform Plan

    " I dislike that capital gains, estate, and gifts are still treated differently than ordinary income. " md #317
    I'm not sure why.

    "It takes $money to make $money."

    A seamstress can't earn a living without a needle & thread.

    An investor uses different tools; usually capital.
    So your formula rewards wealth, thereby punishing the impoverished and the working class.

    Talk to some working class citizens, before you pass judgement on which is more deserving of favorable tax consideration.
    "The next best thing to being clever is being able to quote someone who is." Mary Pettibone Poole

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