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Trump Tax Plan Is Out (sorta)

Visbek

Visbek

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NYT:
https://www.nytimes.com/2017/04/26/us/politics/trump-tax-cut-plan.html

Politico:
Trump tax plan heavy on promises, light on details - POLITICO

• 3 tax brackets (10%, 25%, 35%)

• Corporate at 15%, including Trumps businesses (i.e. HUGE tax break for Trump personally)

• Corp taxes will be for all size businesses

• HUGE tax breaks for the rich

• Standard deduction is doubled, $24k for couples

• Almost every itemization is eliminated -- basically everything except charitable donations, mortgage interest, and new child care credit

• Estate tax repealed (see above re wealthy)

• AMT repealed (see above re wealthy, AND a huge tax break for Trump's own family)

• No border tax in this plan

• One-time tax for companies repatriating cash to the US

• "Some" help for child care, via tax credits

• If it can't be shown to be a revenue-neutral cut, then it can only be in effect for 10 years

• Lots of missing details

Although obviously this hasn't been scored yet, it looks like it will be a massive tax cut, which will mean a huge tax shortfall, adding trillions to the deficit over 10 years.

It probably will spark some growth, but it is all but impossible that it will generate enough growth to replace the lost revenues.

Opening gambit? DOA? We'll see soon enough.
 
Well this is what Hillary accused come to pass - he's using a government office to profit from it personally. Anyone who even attempts that should be removed automatically. But if he doesn't manage to pass this, he'll probably resign since profiteering is his only reason to seek the presidency in the first place

If someone who didn't stand to benefit had proposed this, i could critique it in a serious way, but as it stands, it should only be ****ted on

Also, it's light on details because his last proposal to pay for it by gutting everything except a massive hike to already bloated beyond comprehension military was deemed DoA by his own party
 
I love it...Though I assume we'll have to put in some more taxes in the future... it's a good starting point. I think we should start going away from income and corporate taxes...and start with different methods, like a trust fund tax ... or money transfer tax for money transfers out of the country, ... get creative. Income tax, in my opinion, is a poor and inefficient way of doing it.
 
celticwar17 said:
I love it...Though I assume we'll have to put in some more taxes in the future... it's a good starting point. I think we should start going away from income and corporate taxes...and start with different methods, like a trust fund tax ... or money transfer tax for money transfers out of the country, ... get creative. Income tax, in my opinion, is a poor and inefficient way of doing it.
Click to expand...

Why not a tax on company shares and stock prices.
 
Opposite direction of where I think the country needs to go. Working in conjunction with Congress, Obama steadily reduced our deficit from Bush's last budget. Trump's tax cuts will not pass deficit reduction in reconciliation and the proposed tax cuts will balloon our deficit, without generating revenue to match them. Reagan learned that in the 80s and he increased taxes several times, when revenue did not match expectations. The top marginal rate was also 70% then, now it's a fair 39%. I'll also add that revenue as a % of GDP, under Reagan was much lower than previous administrations, showing evidence that Tax Cuts do not boost federal receipts.

Running the typical conservative supply side economics playbook is not the right playcall at this time. Cutting the marginal rate from 90% during JFK, was the right call for that time in history. Today, rampant inequality and gains going to the top, does not call for more tax cuts, it calls for tax hikes, with some tax bennies worked in for the middle class.


Sent from my iPhone using Tapatalk
 
Visbek said:
• If it can't be shown to be a revenue-neutral cut, then it can only be in effect for 10 years
Click to expand...

Talk about slimy.

They'd spend those 10 years saying we just have to wait for all the supply side goodness to fill us with its warmth. And, of course, there's nothing to stop them from amending it and removing that proviison.
 
Mr Person said:
In what form?

I mean, we do have cap gains, so....
Click to expand...

**** it. Let's just tax all income as if they were Cap Gains. We obviously don't need the money. I want my share of the gains being handed to the already-rich.
 
Unitedwestand13 said:
Taxes that directly link to the value of company shares and stocks.

So companies with High value stocks would recieve a tax that varied depending on the number of stocks invested.
Click to expand...

I'm not sure I understand.

We already pay capital gains when we make a profit on a sale. We pay income tax on dividends (though qualified dividends are treated differently). Are you saying you want people to pay a yearly tax simply for owning stock based on its value over the year, even though the owner gets no money other than through dividends and sale at profit?

I hope I'm misunderstanding you (it would be the third time today I've misread a post so....), because that would be just about the worst idea possible. We don't want to dissuade people from investing and we absolutely do not want to dissuade them from saving for retirement.
 
Unitedwestand13 said:
Why not a tax on company shares and stock prices.
Click to expand...

Mr Person said:
In what form?

I mean, we do have cap gains, so....
Click to expand...

Critter7r said:
**** it. Let's just tax all income as if they were Cap Gains. We obviously don't need the money. I want my share of the gains being handed to the already-rich.
Click to expand...

If you want to talk about making sure the rich actually have to pay taxes at the bracket rates rather than an effective rate lower than most middle class people, I'll listen. But I'm not sure what you're saying here.

You literally cannot tax income "like capital gains" because capital gains involve profit from the sale of property, and you most certainly do not "sell" income for profit. You earn income.
 
Mr Person said:
I'm not sure I understand.

We already pay capital gains when we make a profit on a sale. We pay income tax on dividends (though qualified dividends are treated differently). Are you saying you want people to pay a yearly tax simply for owning stock based on its value over the year, even though the owner gets no money other than through dividends and sale at profit?

I hope I'm misunderstanding you (it would be the third time today I've misread a post so....), because that would be just about the worst idea possible. We don't want to dissuade people from investing and we absolutely do not want to dissuade them from saving for retirement.
Click to expand...

It is not a tax on owning stocks. It is a tax on corporations based on the total value of their stock prices.

It is a tax based on the value of a company's stocks.

I am trying to make a tax that directly targets corporations who care more about buying their own stocks to drive up the prices
 
Visbek said:
NYT:
https://www.nytimes.com/2017/04/26/us/politics/trump-tax-cut-plan.html

Politico:
Trump tax plan heavy on promises, light on details - POLITICO

• 3 tax brackets (10%, 25%, 35%)

• Corporate at 15%, including Trumps businesses (i.e. HUGE tax break for Trump personally)

• Corp taxes will be for all size businesses

• HUGE tax breaks for the rich

• Standard deduction is doubled, $24k for couples

• Almost every itemization is eliminated -- basically everything except charitable donations, mortgage interest, and new child care credit

• Estate tax repealed (see above re wealthy)

• AMT repealed (see above re wealthy, AND a huge tax break for Trump's own family)

• No border tax in this plan

• One-time tax for companies repatriating cash to the US

• "Some" help for child care, via tax credits

• If it can't be shown to be a revenue-neutral cut, then it can only be in effect for 10 years

• Lots of missing details

Although obviously this hasn't been scored yet, it looks like it will be a massive tax cut, which will mean a huge tax shortfall, adding trillions to the deficit over 10 years.

It probably will spark some growth, but it is all but impossible that it will generate enough growth to replace the lost revenues.

Opening gambit? DOA? We'll see soon enough.
Click to expand...

Some estimates have this adding over $2.5T to our deficit. Trump MAGA. :doh
 
Mr Person said:
I'm not sure I understand.

We already pay capital gains when we make a profit on a sale. We pay income tax on dividends (though qualified dividends are treated differently). Are you saying you want people to pay a yearly tax simply for owning stock based on its value over the year, even though the owner gets no money other than through dividends and sale at profit?

I hope I'm misunderstanding you (it would be the third time today I've misread a post so....), because that would be just about the worst idea possible. We don't want to dissuade people from investing and we absolutely do not want to dissuade them from saving for retirement.
Click to expand...

Unitedwestand13 said:
It is not a tax on owning stocks. It is a tax on corporations based on the total value of their stock prices.

It is a tax based on the value of a company's stocks.

I am trying to make a tax that directly targets corporations who care more about buying their own stocks to drive up the prices
Click to expand...

Well, hold on. Corporations own varying amounts of their own stocks. This would basically be a disincentive to be a good corporation, because the more you're worth, the more you pay, instead of the more you make, the more you pay. The latter generally encourages some degree of reinvestment, because all sorts of expenses/etc are deductible.

And then there are all sorts of effects I cannot predict - it'd take quite the team of economists - on corporations' own investment strategies.



I mean, if the problem is the corporate tax rate, I think the much better solution would be simply to move to a flat or nearly flat tax rate for corporations, and set it somewhere consistent with other developed nations. Our effective rate happens to be pretty low because we set it at something like 39% but then there are all sorts of means to reduce it. (Last I recall - and I could be wrong - the effective rate in recent years was somewhere around 14-16%).

Or, for example, 13% on worldwide income: U.S. GAO - Corporate Income Tax: Effective Tax Rates Can Differ Significantly from the Statutory Rate

Trump's plan is terrible because it would reduce the nominal rate to 15%, which would basically mean corporations pay nothing and/or get refunds. (I'm no tax lawyer so......)

I would guesstimate that a flat corporate income tax around 16% along with a reasonable repatriation tax on the same lines would be best, but that's not what Trump wants.
 
Winston said:
Opposite direction of where I think the country needs to go. Working in conjunction with Congress, Obama steadily reduced our deficit from Bush's last budget. Trump's tax cuts will not pass deficit reduction in reconciliation and the proposed tax cuts will balloon our deficit, without generating revenue to match them. Reagan learned that in the 80s and he increased taxes several times, when revenue did not match expectations. The top marginal rate was also 70% then, now it's a fair 39%. I'll also add that revenue as a % of GDP, under Reagan was much lower than previous administrations, showing evidence that Tax Cuts do not boost federal receipts.

Running the typical conservative supply side economics playbook is not the right playcall at this time. Cutting the marginal rate from 90% during JFK, was the right call for that time in history. Today, rampant inequality and gains going to the top, does not call for more tax cuts, it calls for tax hikes, with some tax bennies worked in for the middle class.


Sent from my iPhone using Tapatalk
Click to expand...

How much lower was tax revenue as a % of GDP under Reagan? Have you actually looked into that or are you just going off what you read on some blog?
 
Mr Person said:
Well, hold on. Corporations own varying amounts of their own stocks. This would basically be a disincentive to be a good corporation, because the more you're worth, the more you pay, instead of the more you make, the more you pay. The latter generally encourages some degree of reinvestment, because all sorts of expenses/etc are deductible.

And then there are all sorts of effects I cannot predict - it'd take quite the team of economists - on corporations' own investment strategies.



I mean, if the problem is the corporate tax rate, I think the much better solution would be simply to move to a flat or nearly flat tax rate for corporations, and set it somewhere consistent with other developed nations. Our effective rate happens to be pretty low because we set it at something like 39% but then there are all sorts of means to reduce it. (Last I recall - and I could be wrong - the effective rate in recent years was somewhere around 14-16%).

Or, for example, 13% on worldwide income: U.S. GAO - Corporate Income Tax: Effective Tax Rates Can Differ Significantly from the Statutory Rate

Trump's plan is terrible because it would reduce the nominal rate to 15%, which would basically mean corporations pay nothing and/or get refunds. (I'm no tax lawyer so......)

I would guesstimate that a flat corporate income tax around 16% along with a reasonable repatriation tax on the same lines would be best, but that's not what Trump wants.
Click to expand...

I want something that corporations have to pay.
 
“This bill is about creating economic growth and jobs.” that's so funny.

Here I thought it was about reducing the tax rate on the wealthiest, business owners, corporations, and investors, who already have by far the greatest share of the income distribution, and everyone else be damned.

What a grand gift to their ultra-wealthy base...that's all of you guys right?
estate tax gone
alternative minimum tax gone
corporate tax slashed to less than half
tax on the wealthiest bracket dropped 4%, and the bracket includes more people (they need to be lumped in with average people so they can gain more support....)

You guys do realize they claim it's all about economics/jobs, when its actually about them gaining enormous amounts of wealth right?
 
Unitedwestand13 said:
I want something that corporations have to pay.
Click to expand...

lol, they are going to be paying far less in every way, both as the business and as income AND as investment...the holy trinity is here (for the ultra-rich of course).
 
Visbek said:
NYT:
https://www.nytimes.com/2017/04/26/us/politics/trump-tax-cut-plan.html

Politico:
Trump tax plan heavy on promises, light on details - POLITICO

• 3 tax brackets (10%, 25%, 35%)

• Corporate at 15%, including Trumps businesses (i.e. HUGE tax break for Trump personally)

• Corp taxes will be for all size businesses

• HUGE tax breaks for the rich

• Standard deduction is doubled, $24k for couples

• Almost every itemization is eliminated -- basically everything except charitable donations, mortgage interest, and new child care credit

• Estate tax repealed (see above re wealthy)

• AMT repealed (see above re wealthy, AND a huge tax break for Trump's own family)

• No border tax in this plan

• One-time tax for companies repatriating cash to the US

• "Some" help for child care, via tax credits

• If it can't be shown to be a revenue-neutral cut, then it can only be in effect for 10 years

• Lots of missing details

Although obviously this hasn't been scored yet, it looks like it will be a massive tax cut, which will mean a huge tax shortfall, adding trillions to the deficit over 10 years.

It probably will spark some growth, but it is all but impossible that it will generate enough growth to replace the lost revenues.

Opening gambit? DOA? We'll see soon enough.
Click to expand...

And on the ninety sixth day, President Trump declared, "let them eat ****."

I'm happy to see the corporate tax rate drop to 15% IFF they pull all the deductions. Lots of big corporations pay about 15% now with large accounting teams minimizing their tax burden, but lots of smaller companies are forced to pay closer to the full 35%. So i think we've been long overdue to give small businesses a more level playing field in regards to taxation.

The one-time tax seems bizarre and really needs some actual definition along with the "territorial" tax scheme they want to introduce.

I thought they were pulling tax deductions for children but your source suggests keeping the new child care credit, i suppose i'm a bit ignorant of the distinctions here.

The estate tax repeal is just ****ing ridiculous. That is a massive tax cut for the superrich, i don't see any justification for that, whatsoever.
 
Lutherf said:
How much lower was tax revenue as a % of GDP under Reagan? Have you actually looked into that or are you just going off what you read on some blog?
Click to expand...

I've looked into it. Reagan's revenue as a % of GDP wasn't abysmal, because we experienced growth during the 80s. But, it cratered in 83 which is when he passed some tax increases to pick up some slack. I think his revenue hit a low in '83. I understand the economy was in dire straits after Carter, and we needed to reform fiscal policy. But, the tax cuts lead to underperforming revenue and large deficits, that we didn't correct until Clinton's fiscal policy of the 90s. I'll have to do some homework and make a better argument, but off the top of my head, that's my general recollection.

What I'll do is take the Reagan years, revenue as a % of GDP and average them together, then compare that with the historical average as well as compare him against Clinton.


Sent from my iPhone using Tapatalk
 
Mr Person said:
If you want to talk about making sure the rich actually have to pay taxes at the bracket rates rather than an effective rate lower than most middle class people, I'll listen. But I'm not sure what you're saying here.
Click to expand...

that's what I'm saying. either that, or tax my income at Cap Gains rates.

You literally cannot tax income "like capital gains" because capital gains involve profit from the sale of property, and you most certainly do not "sell" income for profit. You earn income.
Click to expand...

Right, but if you tax income and CG at the same rate, then you're "taxing income like CG", no?

Sent from my SM-G360V using Tapatalk
 
Winston said:
I've looked into it. Reagan's revenue as a % of GDP wasn't abysmal, because we experienced growth during the 80s. But, it cratered in 83 which is when he passed some tax increases to pick up some slack. I think his revenue hit a low in '83. I understand the economy was in dire straits after Carter, and we needed to reform fiscal policy. But, the tax cuts lead to underperforming revenue and large deficits, that we didn't correct until Clinton's fiscal policy of the 90s. I'll have to do some homework and make a better argument, but off the top of my head, that's my general recollection.

What I'll do is take the Reagan years, revenue as a % of GDP and average them together, then compare that with the historical average as well as compare him against Clinton.


Sent from my iPhone using Tapatalk
Click to expand...

Reagan's signature tax package passed in 1986, half way through his second term. The reason tax revenue sucked in the first couple of years of the 80's was because nobody had a job. Inflation was in the double digits and the prime was bouncing around 20%. Banks, much like in the mid 2000's, were up to their eyeballs in real estate and everyone saw the plunge coming. In fact, the only reason Reagan was able to get his tax plan through is because the Democrats couldn't even defend their plans any more. They were just looking for someone to pass the mess off to.
 
Lutherf said:
How much lower was tax revenue as a % of GDP under Reagan? Have you actually looked into that or are you just going off what you read on some blog?
Click to expand...

Since 1930:

fredgraph.png



From 1975 to the present:

fredgraph.png


IIRC: Reagan's major tax cut was in 1981. Revenues plunged starting in 1982, though part of that was because of the recession. He increased taxes in 1982 and 1984, and decreased them again in 1986.

Tax revenues didn't really start increasing until 1993... when Clinton increased taxes.

They declined a bit in 2000, but really plummeted in 2001, when the Bush tax cuts kicked in. They increased when the real estate bubble was in full swing, and obviously dropped again when the recession hit.

Those tax increases also don't seem to correlate to massive growth:

fredgraph.png


E.g. Reagan had a terrible start of his term, with a great year in '83 (one year after a mild tax increase and at a time when he was spending big bucks on defense... and running up the deficit), and less stellar growth in the second half. Clinton, who raised taxes slightly, had a pretty good term until the end (Dot Com crash). Bush 43 had slightly less growth; Obama had a terrible start, and mediocre growth, despite leaving the Bush tax cuts in place and only slightly increasing taxes on the wealthy during his term.

Obviously, such crude correlations have their limits, and determining causality isn't easy. I'm sure I can find far more information if you like, but for the most part, it's pretty obvious that tax cuts do not spark enough growth to make up for the lost revenue.
 
Unitedwestand13 said:
Why not a tax on company shares and stock prices.
Click to expand...

I don't think it's a good Idea to tax investing... it's what provides a lot of the economic growth. You need people wanting to take risks with stocks and shares.
 
Unitedwestand13 said:
Taxes that directly link to the value of company shares and stocks.

So companies with High value stocks would recieve a tax that varied depending on the number of stocks invested.
Click to expand...

That would be a very complicated web of tax policy it sounds like.
And it would obviously discourage investment in companies that were valued high.
 
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