House GOP Tax Reform Plan

[jonny5]

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-and-analysis-2016-house-republican-tax-reform-plan/

 

[VanceMack]

It would be sweet to see both sides actually sit down at a table and work on something that could actually get passed that was positive.

 

[jonny5]

It would be sweet to see both sides actually sit down at a table and work on something that could actually get passed that was positive.

Any idea what what would look like? What can they possibly agree on? Dems want to raise taxes, GOP wants to lower them. Where is the middle ground? Do nothing?

 

[Mac77]

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-and-analysis-2016-house-republican-tax-reform-plan/

End the Earned Income Tax credit and subsidies to solar panel owners

 

[VanceMack]

Any idea what what would look like? What can they possibly agree on? Dems want to raise taxes, GOP wants to lower them. Where is the middle ground? Do nothing?

Believe it or not, once upona time, government used to work that way. Now...I agree with you that both sides are so partisan bent that its highly unlikely that things will improve. I just said it would be sweet if it did.

One of the reasons I so despise Gary Johnson is the libertarians had a chance to draw a solid chunk of votes in 2016. Not enough to get elected, but certainly enough to make a difference. Its obvious that with the US so buried in the 2 party bull****, the ONLY solution right now is a viable third party or strong independent politicians that could sway change. Until then, we have what we have. Huzzah.

 

[ttwtt78640]

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-and-analysis-2016-house-republican-tax-reform-plan/

The federal income tax code, which is based on the 16A power to tax income from all sources, should have two numbers - a truly standard deduction (of say the FPL for three or four people) and a taxation rate (of say 20%) applied to any income from all sources over that amount. Basing income taxation on how or upon who it was later spent makes absolutely no sense and yet comprises the bulk of the current federal tax code. The purpose of federal taxation is to generate federal revenue - not to play social engineering games by favoring this flavor of personal spending over that flavor of personal spending.

 

[chuckiechan]

It would be sweet to see both sides actually sit down at a table and work on something that could actually get passed that was positive.

It depends on the midterms. The democrats are either:

A - Held hostage by the loonie left and will lose more seats in 2018
or
B - Expecting a resurgence of support and wins in the house and senate, making the next batch up for re election in 2020 start looking out for #1 instead of the country.

Until this is decided, it will be difficult to get tax reform under Paul Ryan's leadership.

Polls or no polls, MSM or no MSM, the crystal ball the political world relied on is opaque.

 

[jonny5]

Believe it or not, once upona time, government used to work that way. Now...I agree with you that both sides are so partisan bent that its highly unlikely that things will improve. I just said it would be sweet if it did.

One of the reasons I so despise Gary Johnson is the libertarians had a chance to draw a solid chunk of votes in 2016. Not enough to get elected, but certainly enough to make a difference. Its obvious that with the US so buried in the 2 party bull****, the ONLY solution right now is a viable third party or strong independent politicians that could sway change. Until then, we have what we have. Huzzah.

Its not just about partisan bias, but there is a fundamental ideological difference. Republicans view taxes as a burden. Democrats view it as a tool to force social change.

 

[jonny5]

It depends on the midterms. The democrats are either:

A - Held hostage by the loonie left and will lose more seats in 2018
or
B - Expecting a resurgence of support and wins in the house and senate, making the next batch up for re election in 2020 start looking out for #1 instead of the country.

Until this is decided, it will be difficult to get tax reform under Paul Ryan's leadership.

Polls or no polls, MSM or no MSM, the crystal ball the political world relied on is opaque.

I think it would be easy if the GOP could resolves its internal differences, and then ignore the media, the President, the left, and just pass whatever they want to pass. Trump would sign it.

 

[chuckiechan]

I think it would be easy if the GOP could resolves its internal differences, and then ignore the media, the President, the left, and just pass whatever they want to pass. Trump would sign it.

This is why I think Ryan has got to go.

 

[jonny5]

This is why I think Ryan has got to go.

You think he is too sensitive to political pressure? Who would be more bold?

 

[<alt>doxygen]

The federal income tax code, which is based on the 16A power to tax income from all sources, should have two numbers - a truly standard deduction (of say the FPL for three or four people) and a taxation rate (of say 20%) applied to any income from all sources over that amount. Basing income taxation on how or upon who it was later spent makes absolutely no sense and yet comprises the bulk of the current federal tax code. The purpose of federal taxation is to generate federal revenue - not to play social engineering games by favoring this flavor of personal spending over that flavor of personal spending.

That would be fine with me. Favoring one type of income over another is the result of people and entities with large amounts of money lobbying the government to warp the code to favor them - so they can make more money more easily.

 

[jonny5]

That would be fine with me. Favoring one type of income over another is the result of people and entities with large amounts of money lobbying the government to warp the code to favor them - so they can make more money more easily.

Its actually the result of people electing people who respond to 'large amounts of money lobbying the government'.

 

[ttwtt78640]

That would be fine with me. Favoring one type of income over another is the result of people and entities with large amounts of money lobbying the government to warp the code to favor them - so they can make more money more easily.

I am more concerned about treating the same income differently based on how, or upon who, it is later spent. If I buy X at fair market value, keep that X for a period of time and later sell that X at fair market value that, IMHO, is not income - I have gained nothing but the ability (requirement?) to pay taxes such that I no longer possess the funds to buy X at fair market value.

 

[<alt>doxygen]

I am more concerned about treating the same income differently based on how, or upon who, it is later spent. If I buy X at fair market value, keep that X for a period of time and later sell that X at fair market value that, IMHO, is not income - I have gained nothing but the ability (requirement?) to pay taxes such that I no longer possess the funds to buy X at fair market value.

I've been working some whacky hours lately - I'll use that as an excuse... For whatever reason, I'm not sure I'm following you. Can you give me an example transaction sequence to illustrate what you are describing? Basically - examples of "X".

 

[ttwtt78640]

I've been working some whacky hours lately - I'll use that as an excuse... For whatever reason, I'm not sure I'm following you. Can you give me an example transaction sequence to illustrate what you are describing? Basically - examples of "X".

X could be a stock, vehicle or real estate - it does not matter. The concept of a capital gain is that if X is bought for $100 and later sold for $200 then that is treated as added annual income of $100. My point is that if you take (tax) $30 of that income away then one no longer has the funds required to buy another X (or anything else costing $200). Of course the reverse is not true - if I buy an X for $100 and later sell it for $50 (or just give it away) then that (capital loss?) does not reduce my annual "income" by $50 (or $100).

 

[<alt>doxygen]

X could be a stock, vehicle or real estate - it does not matter. The concept of a capital gain is that if X is bought for $100 and later sold for $200 then that is treated as added annual income of $100. My point is that if you take (tax) $30 of that income away then one no longer has the funds required to buy another X (or anything else costing $200). Of course the reverse is not true - if I buy an X for $100 and later sell it for $50 (or just give it away) then that (capital loss?) does not reduce my annual "income" by $50 (or $100).

Okay, I see what you're getting at. In the case of securities, aren't you able to use the 50.00 loss to offset gains elsewhere, potentially reducing your net income by that 50.00?

I remember being able to write off certain assets I purchased for business purposes due to the fact they were seen as depreciating in value, however, I doubt I could get away with writing off the net "loss" in value I would realize if I purchase a new car and sell it 5 months later.

The system is too complex.

 

[ttwtt78640]

Okay, I see what you're getting at. In the case of securities, aren't you able to use the 50.00 loss to offset gains elsewhere, potentially reducing your net income by that 50.00?

I remember being able to write off certain assets I purchased for business purposes due to the fact they were seen as depreciating in value, however, I doubt I could get away with writing off the net "loss" in value I would realize if I purchase a new car and sell it 5 months later.

The system is too complex.

It is not a complex concept to treat a loss on a transaction differently than a gain on that same transaction. Buying something at fair market value and later selling that something at fair market value is a wash no matter what the price difference is - you still have either the X or its current market value.

 

[Absentglare]

It would be sweet to see both sides actually sit down at a table and work on something that could actually get passed that was positive.

The two sides have completely different ideas of what "positive" means.

One side wants to take from the poor and give to the rich. The other side wants to take from the rich and give to the poor.

 

[ttwtt78640]

The two sides have completely different ideas of what "positive" means.

One side wants to take from the poor and give to the rich. The other side wants to take from the rich and give to the poor.

I am on the third side - take nothing from the first $X of income and take 20% of the "excess".

 

[Renae]

It would be sweet to see both sides actually sit down at a table and work on something that could actually get passed that was positive.

The two sides are diametrically opposed at this point. The left believes taxation is fairness and the right see it has a hinderance...

 

[VanceMack]

The two sides are diametrically opposed at this point. The left believes taxation is fairness and the right see it has a hinderance...

Nah...I dont buy that. Anyone claiming the 'left' (especially the leftist politicians) believe that taxes and taxation should be 'fair' ignores the reality that they could easily be paying higher voluntary taxes. No...the left is out there squeezing every dime out of the government, just like the right is.

 

[Renae]

Nah...I dont buy that. Anyone claiming the 'left' (especially the leftist politicians) believe that taxes and taxation should be 'fair' ignores the reality that they could easily be paying higher voluntary taxes. No...the left is out there squeezing every dime out of the government, just like the right is.

You misunderstood, fair meaning they are "making the rich pay their fair share"

 

[Absentglare]

Nah...I dont buy that. Anyone claiming the 'left' (especially the leftist politicians) believe that taxes and taxation should be 'fair' ignores the reality that they could easily be paying higher voluntary taxes. No...the left is out there squeezing every dime out of the government, just like the right is.

The nature of taxes are compulsory. I think you are confusing a donation with an obligation.

 

[VanceMack]

You misunderstood, fair meaning they are "making the rich pay their fair share"

Thats a great slogan, isnt it?