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Trump's Tax Plan

Discussion in 'Politics Forum (Local/National/World)' started by searcher, Sep 27, 2017.



  1. southfork

    southfork Mother Lode Found Mother Lode

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    There will be no tax reform, nor aca repeal and probably no wall
     
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  2. edsl48

    edsl48 Silver Member Silver Miner

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    Speaking of handouts how about that earned income credit where people not only pay no taxes they get money back that they didnt pay in. Then, for welfare purposes, that EIC isn't counted meaning its just more free money for the FSA types. What amazes me is that the people are generally too stupid to realize why they are getting the EIC and spend their days bitching how the Government is holding them down
     
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  3. Alton

    Alton Gold Member Gold Chaser

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    Gotta help fund antifa and blm.
     
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  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Untangling US Tax System
    VOA News



    Published on Sep 29, 2017
    Nearly all U.S. taxpayers say American tax law, which runs tens of thousands of pages, is an incredibly complicated, annoying mess. And there is no agreement on how to fix the problem. Republicans recently outlined a new effort they say will be clearer, fairer and helpful to the economy. Critics say the Republican plan would cut taxes for the rich and increase the U.S. debt. VOA's Jim Randle looks at how the system is supposed to work, and what critics say is wrong.
    Originally published at - https://www.voanews.com/a/us-taxes-ex...
     
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  5. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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  6. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    And taxing capital limits the incentive to invest
     
  7. Usury

    Usury Gold Chaser Platinum Bling

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    Yep...and ain't it conveniently funny that all the accountants and tax preparers and the ones crying fowl. I suppose if taxes become simple then they're out of work. So what do you expect them to say? I work in the mortgage business and stopped telling people YEARS ago that a mortgage is good for your taxes because of interest deduction. Reason? I figured out that most of the lower income folks under $50k aren't paying taxes anyway so it doesn't help and the higher income folks over $80-100k get screwed by limited deductions and AMT. it's all a scam. Make it simple, equal and move on.
     
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  8. Oldmansmith

    Oldmansmith Midas Member Midas Member

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    Not paying taxes? Oh that's right the 12.4 percent I give the goobermint at gunpoint for somebody else's social insecurity is a "contribution."

    Income isn't the only tax those making under 50k pay.
     
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  9. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Still in the talking stage. Be interesting to see how it'll change and what new bills will be attached to it before it's voted on.
     
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  10. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Lobbyists See a Billion-Dollar Boon in Tax Rewrite’s Lack of Detail
    [​IMG]
    The New York Times

    By KENNETH P. VOGEL
    53 mins ago


    WASHINGTON — The sweeping tax rewrite unveiled by President Trump and Republican lawmakers this past week leaves many of the details to Congress, but two sentences in the nine-page framework have Washington lobbyists salivating over a payday that some industry experts predict could top $1 billion.

    Tucked away on Page 8, the sentences refer vaguely to plans to repeal or roll back “numerous” exclusions and deductions, and to “modernize” tax rules affecting specific industries “to ensure that the tax code better reflects economic reality and that such rules provide little opportunity for tax avoidance.”

    That language has prompted concerns among a wide range of businesses and industries about the prospect of losing valuable tax breaks — from preferential tax treatment for insurers to credits for renewable energy to a prized tax treatment used by the commercial real estate industry.

    And those fears are being stoked by lobbyists, who are urging clients and prospective clients to get out in front of any changes that could eliminate or weaken sections of the tax code that benefit them.

    “You’re either going to be at the table, or you’re going to be on the table,” said Thomas M. Reynolds, a former Republican congressman from New York who served on the tax-writing Ways and Means Committee and is now a lobbyist at Holland & Knight focusing on tax issues. Most businesses that could be affected by the tax overhaul “will not have to be encouraged to engage,” Mr. Reynolds said.

    “Everybody is beginning to pay attention, and there is going to be a flurry of people looking for representation,” he added.

    The spike in tax-related lobbying is already well underway, prompted by Mr. Trump’s campaign-trail pledge that fundamentally overhauling the tax code would be one of his top priorities in the White House. Companies and trade associations have submitted nearly 450 filings to lobby on tax issues from the beginning of the year through the end of last week, compared with fewer than 265 filings for all of 2016, according to congressional lobbying disclosures.

    There is some irony in Mr. Trump’s setting off a surge in lobbying spending, given his campaign promise to “drain the swamp” in the nation’s capital, partly by taking on special interests. But there is perhaps no federal law that has been lobbied as assiduously as the tax code. Its thousands of pages contain countless provisions inserted at the behest of specific groups that have an interest in protecting their benefits.

    “People have been expecting this all year. But the feeling that specific provisions could be put in play is now more real, and all of those provisions have a constituency and a lobbyist,” said Randolf H. Hardock, a tax lobbyist at Davis & Harman. “Some of it is just keeping clients informed, even if they don’t ultimately engage, because there are issues that could come up right at the end, where if you’re not paying attention, you could miss them.”

    In 1986 — the last time Congress overhauled the tax code — Mr. Hardock served as tax counsel for the chairman of the Senate Finance Committee, Senator Lloyd Bentsen, Democrat of Texas. That legislation, the Tax Reform Act of 1986, became the subject of such intense lobbying activity from interest groups and individual companies that it was jokingly referred to on K Street as the Lobbyists’ Relief Act of 1986.

    Lobbying has expanded and evolved drastically since then: It’s now a $3 billion industry with a sophisticated war-room approach that goes beyond simply buttonholing lawmakers to include comprehensive marketing and pressure campaigns.

    Those costly campaigns can pay off, as they did for those fighting a proposed tax on imports championed by many Republicans, including the House speaker, Paul D. Ryan of Wisconsin. A coalition of major retailers such as Wal-Mart, retail trade associations and manufacturers including Koch Industries banded together earlier this year with the single goal of killing the so-called border adjustment tax.

    The group, Americans for Affordable Products, spent heavily on research, slick television ads and constituent visits to key lawmakers in the first few months of the year. In April, the Trump administration backed away from the tax, which was not included in Wednesday’s blueprint.

    But while the tax on imports was a clear target, the paucity of details in the new blueprint has created anxiety in corporate suites across the country, despite the overwhelming support in the business community for its proposed reduction in the corporate tax rate to 20 percent from 35 percent.

    Lobbyists are potentially facing two rounds of business-development opportunities: one in which they capitalize on the fear of getting attacked, and another when specific industries come under attack.

    Meanwhile, the details revealed so far are creating fissures within industries, such as real estate, as trade groups battle one another in an effort to strip out or protect various provisions under consideration.

    The National Association of Realtors is already out in force, criticizing aspects of the plan as dealing a devastating blow to the housing market and United States economy. While the framework specifically protects the mortgage interest deduction, real estate agents say the proposal to double the standard deduction and eliminate the state and local tax deduction would make buying a home less valuable.

    The National Association of Home Builders, by contrast, has come out in favor of the framework, saying the lower corporate tax rate, a new 25 percent tax rate for “pass through” businesses, and protection of the low-income housing tax credit will help builders, whose businesses benefit from both renters and home buyers.

    “By lowering the pass-through rate, the plan will reduce the tax bill of thousands of small businesses and help to spur job and economic growth,” the chairman of the home builders association, Granger MacDonald, said in a statement. “More importantly, the blueprint maintains the low-income housing tax credit, the most indispensable tool to help produce affordable rental housing.”

    Meredith McGehee, the chief of policy at Issue One, a nonprofit group that works to reduce the influence of deep-pocketed special interests in politics and government, said that “the estimate of $1 billion in lobbying expenditures is probably conservative.”

    Ms. McGehee, who has been both tracking lobbying and actually lobbying since 1987, predicted that many of the efforts to influence the details of the tax overhaul would not be disclosed under congressional lobbying rules because they would fall outside the scope of the direct contacts with federal government officials that prompt disclosure requirements.

    Several tax lobbyists said businesses and trade groups concerned about whether they could be in jeopardy as the plan develops should look to a tax reform bill released in 2014 by the House Ways and Means Committee under its then-chairman, Representative Dave Camp of Michigan, a Republican who retired in 2015. That bill proposed ending all manner of loopholes and credits, including for insurance companies and research and experimentation.

    “You have to be out there working to make the case now, because everybody knows what the menu includes,” said James Gould, a tax lobbyist who worked as a Senate tax aide during the 1986 reform effort.

    But Mr. Hardock said there might be some benefit in trying to stay out of the debate for companies or trade groups in industries that aren’t being openly discussed as targets for revenue generation.

    “There are some industries that probably don’t want to put their heads too far up, because that might draw unwelcome notice,” he said.

    http://www.msn.com/en-us/news/polit...ack-of-detail/ar-AAsEweM?li=BBnb7Kz&ocid=iehp
     
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  11. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Gerald Celente - Tax Plan Enriches Rich
    Gerald Celente



    Published on Sep 29, 2017
    Original release: 09/29/2017

    www.TrendsJournal.com

    Official Gerald Celente channels: "Gcelente" & "TrendsJournal".

    ©2017 TrendsResearchInstitute. Gerald Celente™.
     
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  12. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  13. Joe King

    Joe King Gold Member Gold Chaser

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    You are correct, income isn't the only tax they pay. However, income is the tax being discussed for changes. One thing at a time, ok?

    As for SS being taken at gunpoint, it's really not. People that pay it have volunteered to pay it and filed documents authorizing that it be taken. Perhaps if more people realized that pesky little fact it would become easier to be able to eventually fix it?
    ...but as long as the vast majority adopt a victim mindset about it, it'll never change because a victim mindset is a powerless mindset.

    No, what we need is for about 250million people to realize how it actually works. Because to fix a problem with any system, you must first understand how that system operates. If you don't, you'll never fix it.
     
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  14. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    What Could Possibly Go Wrong With Tax Reform? The Answer, According To Goldman, Is "Plenty"

    [​IMG]
    by Tyler Durden
    Oct 3, 2017 9:04 AM

    One of the reason why the torrid dollar rally of the past few weeks appears to have plateaued, at least for the time being, is that just like earlier in the year, doubts have emerged about the viability of the "new and improved" tax plan, which according to the Tax Policy Center would mostly benefit the "Top 1", even as it eventually pushes taxes for the upper middle class progressively higher. One catalyst is a Bloomberg report overnight, in which Bob Corker was quoted as saying that the White House is showing "softness" on ending the $1.3 trillion federal tax deduction filers get for their state and local taxes, warning that it raises questions about the GOP’s "intestinal fortitude" and could imperil a tax overhaul.

    The framework that President Donald Trump and Republican leaders released Wednesday calls for deep rate cuts and would abolish existing tax breaks to help pay for them. Without such “pay-fors,” Congress might have to settle for only temporary tax cuts.

    Needless to say, temporary tax cuts would have far less of an impact on both stocks and the dollar than if Trump's "biggest ever" tax reform is permanent.

    But it's not only the suddenly shaky future of SALTaxes. As Goldman's economists write overnight in a report looking at "what could possibly go wrong" with tax reform, they note that while "recent developments on tax reform have been positive" with the Senate’s "tentative budget agreement likely headed for passage in the Budget Committee this week" and the Big Six framework signaling narrower tax policy differences, there’s "plenty that could still go wrong."

    Some of the notable hurdles that could lead to Trump's first year to have zero major legislative victories are as follows:
    • Revenue target hasn’t been finalized; Senate’s $1.5 trillion "tax cut instruction" is at high end of potential outcomes; legislation reducing revenue that much might face opposition from some Republican centrists
    • Major details remain unknown, particularly which tax preferences would be curbed to help offset costs
    • Some tax increases proposed to offset costs are likely to be very difficult to achieve, such as repeal of state/local tax deduction, especially with Corker adding more fuel to the fire overnight.
    Still, Goldman's Washington analyst Alec Phillips concludes on the optimistic side and sees a 65% probability that "tax legislation will be enacted by 2018."

    There will be more details once the Senate Finance Committee hold a hearing on international tax reform today at 10am.

    Until then, here is the full Goldman note:

    Tax Reform: What Could Possibly Go Wrong?
    • Recent developments on tax reform have been positive. The tentative budget agreement announced in the Senate two weeks ago has been formally proposed and appears headed for passage in the Senate Budget Committee this week. The House also appears likely to pass its budget resolution this week, and the framework on tax reform released by the “Big Six” on September 27 signals a narrowing of tax policy differences.
    • That said, there is plenty that could still go wrong. First, the revenue target has not yet been finalized, and it is becoming increasingly clear that the Senate’s $1.5 trillion tax cut instruction is at the high end of the potential range of outcomes. It is possible that tax legislation that reduces revenues that much might still face opposition from some Republican centrists.
    • Second, while the recently released framework demonstrates greater consensus among the House, Senate, and White House than appeared to exist a few months ago, there are major details that remain unknown, particularly which tax preferences would be curbed to help offset the cost of the tax cuts.
    • Third, some of the tax increases that have been proposed to offset the cost are likely to be very difficult to achieve, such as repeal of the state and local tax deduction.
    • That said, in light of the increased flexibility the tentative $1.5 trillion revenue target would provide for tax reform efforts, we currently believe there is a 65% probability that tax legislation will be enacted by 2018.
    The prospects for tax reform have increased markedly in the last couple of weeks as a result of the recently released budget agreement in the Senate and, to a lesser extent, the framework on tax reform released by the “Big Six”. While we have noted these positive developments several times recently, in today’s US Daily we focus on the long road ahead and the obstacles tax reform is likely to encounter along the way.

    Tax reform is moving on two tracks. The first track involves the budget resolution for fiscal year (FY) 2018, which congressional Republicans hope to use to include “reconciliation instructions” for tax reform. These instructions typically carry three pieces of information: (1) which committees must carry out the instructions, (2) the fiscal goal of the policy change (to raise or reduce taxes, spending, or the deficit), and (3) the deadline by which the committees must pass the relevant bill. The draft budget resolution that was released on September 29 by the Senate Budget Committee instructs the House Ways and Means Committee and Senate Finance Committee to pass legislation to reduce revenues by $1.5 trillion over the next ten years by November 13, 2017. As shown in Exhibit 1, the Senate must then pass the resolution, and the House and Senate must the agree on a single, common version of the budget resolution, which could happen through a House-Senate conference committee, or by the House simply accepting the Senate’s resolution once the Senate has passed it. Once a final resolution has been agreed upon by simple majorities in the House and Senate, the second track begins in earnest.

    The second track involves the passage of detailed legislation that reforms the tax code. While the draft resolution's deadline for passage by the tax-writing committees is currently November 13, we expect them to take a little longer to pass a tax bill, given that there is no penalty for missing the deadline and there are still a number of issues to be worked out. That said, it is certainly possible that the House Ways and Means Committee will pass tax reform legislation in November. Passage in the full House is likely to follow no sooner than late November and more likely December. Senate consideration is unlikely to start until December and is likely to carry over into 2018, in our view. Even if the Senate were able to pass a bill by December, it seems unlikely to us that the House and Senate would be able to resolve all of their differences before year end, so enactment in Q1 2018 is our base case.

    Exhibit 1: A long road ahead
    [​IMG]




    The budget resolution looks likely to include a placeholder for a tax cut… The Senate’s draft budget resolution includes a placeholder for a tax cut of $1.5 trillion over ten years. With around $450bn in expiring tax provisions over the next ten years, this implies a $1.05 trillion tax cut compared with the tax that would be collected if current policy was simply extended. The revenue effects of the tax cut might be estimated on a “dynamic” basis, where the Joint Committee on Taxation (JCT) and Congressional Budget Office (CBO) would consider the economic growth implications of the tax bill and add back the resulting tax receipts to the estimate, lowering the overall cost of the tax bill. In the past, JCT dynamic scoring models have typically reduced the cost of a tax cut by around 10% to 20% compared with a conventional estimate. Depending on whether the dynamic score is applied to the $1.5 trillion or the $1.05 trillion figure, this could allow for a “real world” tax cut up to $1.2 trillion (0.4% of GDP) to $1.4 trillion (0.6% of GDP) over the next ten years.

    …but this is a limit and the final tax cut could be smaller. The risk appears to be to the downside of the Senate’s tax reform placeholder, for two reasons. First, the House and Senate need to finalize their “reconciliation instruction” and the House’s draft takes a much more conservative approach, calling for revenue-neutral tax reform combined with $200 billion in spending cuts. While we expect that the instruction included in the final budget resolution will resemble the Senate’s version, changes are possible and the $1.5 trillion figure is more likely to move lower than higher if it does change.

    Second, the instruction sets a limit on the size of a tax cut, and political constraints could lead to a smaller change. If the tax legislation cuts taxes by more than instructed under the budget resolution, it would trigger a procedural objection in the Senate that would take 60 votes to waive. Assuming Democrats will largely oppose the tax bill, this effectively limits the size of the tax cut to whatever amount is included in the reconciliation instruction. However, centrist Republicans might try to force the size of the tax cut down further. For example, Senator Corker (R-Tenn.) has indicated he plans to oppose any tax legislation that adds to the deficit over the long term beyond the cost of extending expiring tax provisions and the amount of tax cut that might be offset by a “reasonable” estimate of the revenue gain from economic growth under dynamic scoring. While it is hard to gauge what Sen. Corker might deem to be reasonable when it comes to dynamic scoring, there is a possibility that he and other like-minded centrist Republicans in the Senate would oppose a tax bill that cuts taxes as much as allowed under the $1.5 trillion reconciliation instruction, even if they have voted for the budget resolution that allows it. With Senator McCain (R-Ariz.) suggesting he might oppose legislation that is not considered under “regular order” with bipartisan support (as opposed to the reconciliation process), any further opposition from the remaining 50 (out of 52) Senate Republicans could sink the bill.

    The tax policy debate is just getting started but key details remain unknown. The release of the “unified framework” on tax reform on September 27 represented a small step in reaching consensus on tax reform among the key White House and congressional leaders (Exhibit 2). However, there are many details that have not yet been clarified, including the income levels at which the new tax rates for individuals would kick in; without this detail it is impossible to determine the size of the tax cut for individuals, or whether it would be a tax cut at all.

    Exhibit 2: Latest Proposal Represents Small Step Towards Consensus
    [​IMG]


    Reliance on repeal of the state and local tax (SALT) deduction to pay for individual tax cuts is risky. The Tax Policy Center estimates repeal of the state and local deduction would generate $1.3 trillion in new revenue under the proposal. However, with 28 House Republicans representing the highest tax states of New York, New Jersey and California and dozens more representing states with slightly lower taxes, the odds of repeal are low in our view. While a limitation of some kind—a percentage limitation, a dollar cap, converting the deduction to a credit of a reduced amount, or repealing only the income tax deduction and allowing deductibility of only property taxes –is possible, this would raise substantially less revenue than outright repeal.

    On the corporate side, the proposal is more detailed, but may not be affordable… The framework calls for a 20% corporate tax rate, which would reduce revenues on a “static” basis by around $1.8 trillion over ten years. Other corporate changes would add slightly to this total. The proposal also calls for a 25% rate on pass-through income earned by partnerships, sole proprietorships and other entities. The effect on tax receipts would depend on how much wage and other individual income was recharacterized as pass-through income, but a recent estimate by the Tax Policy Center puts the cost around $770bn over ten years. Most of the other business tax proposals in the framework are smaller and work in both directions, roughly offsetting each other. Nevertheless, this suggests that the business tax cuts account for at least a $2.5 trillion revenue loss.

    …And will probably need to be substantially scaled back… The cost of the corporate provisions is far beyond the $1.5 trillion maximum revenue loss envisioned in the Senate’s budget resolution, and perhaps even farther beyond what centrist Republican senators might be willing to accept. Moreover, passing a large corporate tax cut while leaving individual taxes roughly unchanged on the whole would be difficult to sustain politically, suggesting that the business tax cut figure will need to come down well below the $1.5 trillion revenue target.

    …Or phased in gradually. White House officials and the president himself have repeatedly stated that they are unwilling to negotiate on the 20% corporate tax rate. However, with the fiscal math as it is, it will be very difficult to achieve a corporate rate of 20% over the next ten years. In 2001, tax writers solved a similar issue by phasing in rate reductions over several years, which allowed them to pass legislation with much lower terminal tax rates than would be possible if rate reductions were phased in immediately. We expect that this could come into play on the corporate side, in particular, since it would allow congressional Republicans and the White House to announce a low headline rate even if it takes several years to achieve. By contrast, we would expect individual tax cuts to take effect more quickly, since lawmakers are likely to want to provide voters with a tangible benefit ahead of the 2018 midterm election.

    Budget rules still pose a challenge. There are two important technical obstacles that must be overcome to pass tax reform via reconciliation. First, pay-as-you-go (PAYGO) rules constrain the consideration of deficit-increasing legislation. While most of these rules can be circumvented, one that could be difficult to get around is the statutory PAYGO rule enacted in 2010, which imposes automatic spending cuts via sequestration to offset the effect of any deficit increasing legislation Congress passes. This would not prevent Congress from passing a net tax cut, but might serve as a deterrent. Second, the “Byrd” rule in the Senate prohibits reconciliation legislation from increasing the budget deficit outside of the window covered by the budget resolution (traditionally 10 years). This is less of an issue regarding individual tax cuts, which might be allowed to expire after ten years under the assumption they would be extended later. However, it could pose problems for corporate tax changes, which tax writers hope to make permanent. Waiving either rule requires 60 votes in the Senate, so tax legislation will need to work within these constraints.

    The next political test will be the upcoming Senate vote on its budget resolution. This week’s votes on the House Floor and in the Senate Budget Committee do not appear to pose much risk, as each chamber’s respective budget resolution looks likely to pass without substantial changes. There is somewhat greater uncertainty later in October, for two reasons. First, when the Senate resolution reaches the Senate, Republican centrists may attempt to reduce the size of the tax cut further, though at the moment our expectation is that whatever can pass the Senate Budget Committee can probably pass the full Senate as well. Second, and more importantly, the House and Senate resolutions are substantially different, as noted above. While we expect the Senate version to largely prevail, changes are possible before the final version is agreed to.

    We see enactment of tax legislation by Q1 2018 as the base case, despite these risks. We upgraded our outlook on tax reform following the tentative budget agreement in the Senate two weeks ago, and believe there is a 65% chance that tax reform will be enacted by 2018. This is mainly because of the flexibility that the $1.5 trillion tax cut placeholder in the budget resolution gives tax writers, who will be able to avoid making as many politically difficult choices in order to lower tax rates, which increases the odds of tax reform, in our view. The tax cut placeholder also makes possible the enactment of a simple tax cut in 2018 if broader tax reform efforts fall through. As outlined above, there are a number of potential risks along the way, but at this point the arguments in favor of enactment of tax legislation by 2018 outweigh the arguments against it.

    http://www.zerohedge.com/news/2017-10-03/
     
  15. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    What Does Tax Reform Mean to Wealth Management Clients?

    October 3, 2017 9:00am by Barry Ritholtz

    Tax planning expert and certified financial planner Bill Sweet (Bill’s personal story is here) works every day on behalf of our clients, reviewing portfolios, identifying solutions and saving people money through intelligent planning. Bill’s expertise has enabled us to take on more complicated cases and streamline the asset “location” process across our entire practice.

    Bill takes a stab at what the GOP’s tax reform plan, focusing on 6 main issues and what they might mean for our clients. His item-by-item bullets are below.

    ***

    The new Big Six tax reform proposal dropped yesterday and is fresh on the streets. While the nine-page summary does answer some of the questions we raised in April, the Unified Framework for Fixing Our Broken Tax Code (an actual title for an actual government document!!) remains heavy on concepts but short on details – it is still more of a wish-list than a fully fleshed-out plan.

    So we do the best we can do at this point is interpret how this latest proposal might impact taxpayers and more specifically Ritholtz Wealth investors. But the actual analysis for specific taxpayers will have to wait until Congress kicks into gear and actually gives us numbers – not broad concepts – to work with.

    Let’s start with the good stuff – items we feel will generally benefit taxpayers.

    AMT (Alternative Minimum Tax) Repeal

    On the chopping block is the most confusing and least-understood parts of the tax code. It was originally intended to close a loophole wealthy taxpayers were exploiting to artificially lower their tax rates through excessive deductions. Because of numerous failed patches and failures to adjust for inflation, the AMT now primarily hits middle class taxpayers with lots of kids or residing in high cost-of-living states. Because it is complex, difficult to plan for, and likely doesn’t achieve its original intent, most taxpayers (and accountants) will be thrilled to see the AMT put to rest.

    Fewer Tax Brackets

    The outline suggests replacing the current tax brackets – 10% / 15% / 25% / 28% / 33% / 35% / 39.6% – with only three – 12% / 25% / 35%. We feel this is generally a good thing as it simplifies an unnecessarily complex system. It is important to note, however, that without knowing where each bracket starts and ends, it is impossible to estimate what the impact of this change will be on specific taxpayers or the tax system as a whole.

    Doubles the Standard Deduction (but removes personal exemptions)

    Taxpayers who don’t itemize their deductions (typically, those who rent instead of own their primary residence) seemingly get a large gift. The standard deduction seems to double, but at the cost of personal exemptions at $4,000 a person being removed. You have to combine the two to understand the actual impact as what looks like a 50% increase for many taxpayers is closer to 15%.For a married couple the total increases to $24,000 from $20,000 (made up of $12,000 standard + $8,000 in exemption in the current structure).

    Meanwhile, households with one child just break even – currently $12,000 standard deduction + $12,000 exemptions = $24,000, exactly the standard deduction being proposed. Households with two or more children would likely receive a lower total deduction + exemptions than under the current structure, potentially harming larger families.

    The proposal offers “significant increases [to] the Child Tax Credit” to make up for this.

    The ultimate impact will depend on the details to be determined, but I’d guess that this change would result in fewer households paying income tax. Already, about 45% of households don’t pay any income taxes at all. This is likely because they don’t make enough income to file a return, or they file but a combination of their standard deduction or tax credits like the Earned Income Tax Credit or Child Tax Credit offsets taxes calculated on their Form 1040. Doubling the standard deduction is likely to increase that total in theory, depending on the fate of the EITC and CTC.

    Lowers Rate on Pass-through Businesses

    Typically small (and sometimes large) businesses take the form of sole proprietorships, partnerships, LLC/LLPs, and S-corporations. They do so to avoid double-taxation using a mechanism called pass-through income – the corporate or partnership entity pays no tax at the corporate level, but instead distributes all income through to owners pro-rata to be paid at individual rates.

    The differential between the proposed pass-through rate of 25% and the highest marginal individual rate of 35% is significant and tantalizing. Yet the proposal warns that “committees will adopt measures to prevent recharacterization of personal income into business income.”

    We have no clue what this means – after all, business income is personal income for your local barber or hedge fund manager, at the end of the day.

    Secretary of the Treasury Steven Mnunchin has stated publicly that there will be a difference between certain service-based businesses – he used the example “accountant firm” which would not be eligible for the pass-through rate – in opposition to “a business that’s creating manufacturing jobs,” which supposedly would be eligible for the lower rate “to help create jobs and better wages.” So how the government chooses to draw the line is anyone’s guess outside of the unfortunate and incorrect conclusion that accountants don’t create jobs.

    I’m just hoping that it doesn’t boil down to the government identifying winners and losers arbitrarily (or worse, based on ideology). About 85% of the US economy today is service-based, and high-wage jobs for Amazon and UPS are just as valuable as high-wage jobs for Boeing and General Motors, in our opinion.

    Also, assuming that many mom-and-pop businesses will fall into the 25% individual tax bracket anyway, do small businesses actually benefit from this?

    Estate & Generation-Skipping & Gift Tax Repeal

    The proposal calls this the “death tax” since it this sounds like a big scary thing, but only applies to couples whose assets exceed $10.9 million who haven’t bothered to a hire competent estate planner. Estate tax today only affects about 0.14% of estates, meaning that 99.8% of the population is currently exempt. That said, a repeal of the estate and GST tax will benefit wealthy taxpayers who don’t believe in advance planning, allowing their heirs to inherit most of their wealth.

    Let’s now take a look at how the proposal would (likely) harm certain taxpayers, and how.

    Single Parents

    Today, single parents are eligible for a head-of-household filing status, which gives the taxpayer favorable tax brackets somewhere in between single and married-filing-joint rates. They also receive a 50% boost to their standard deduction.

    This filing status appears to be gone in the new proposal, likely increasing the tax paid by single parents should they be forced to file as single taxpayers. Theoretically, increases to the Child Tax Credit may offset some of this increase, but additional CTC benefits would have to be significant to keep pace with the additional deduction offered to single taxpayers as part of the proposal.

    Households With Two or More Children

    Since a household with two parents + two children are eligible for 4 x $4,000 personal exemptions at a total of $16,000, removing this and offsetting it with an additional $12,000 standard deduction leaves a family of four reporting $4,000 more in taxable income in the new plan vs. old. That’s a pretty raw deal.

    The proposal promises an increase in the Child Tax Credit to offset this, but there is likely a reason that they didn’t quantify the figure.

    I should also point out that this only affects households who receive a standard deduction – households who itemize, typically middle-class families who own a home as their primary residence, lose their exemptions at $4,000 per person but receive nothing back in the form of increased deductions. In fact. it’s probably worse for anyone who owns a home.

    Anyone Paying Real Estate Taxes

    If you live in a high property tax state, your property taxes are no longer deductible under the Unified Framework for Fixing Our Broken Tax Code. The UFFOBTC does retain mortgage interest deductions, which is significant. The real estate lobby will likely have something to say about this to their local representative, and so should you if you fork over taxes on your personal residence.

    Anyone Paying State Income Taxes[​IMG]

    If you live in a high income tax state, your income taxes are no longer deductible under the Unified Framework for Fixing Our Broken Tax Code.

    If I end up marching on Washington to protest the further breaking of the Broken Tax Code, this is the thing that is going to trigger me personally – a large percentage of my clients (and me) pay significant income taxes to the great State of New York. This is atrocious and I do take this up with my local representative frequently, but a silver lining to help offset the blow is that I can at least deduct these against my federal income taxes.

    So someone who pays state income tax AND real estate taxes is going to rightly be upset about UFFOBTC. I’ll be leading the charge.

    It is also focused pain on high-income, high-tax states like New York, New Jersey, California, Oregon, and Illinois, thus theoretically benefitting no income tax and low property tax states like Texas, Florida, Tennessee, and Nevada.

    Finally, here are some key questions / observations:

    Did Congressional Leaders Learn Anything from Health Care “Reform” ?

    From my view, the three ACA repeal efforts were heavy on campaign promises to do something, but really, really light on details. The public was made aware of this lack of planning, and the historically unpopular ACA suddenly became something that even GOP representatives rallied around.

    Nearly everyone agrees that our tax code is unnecessarily complex and potentially “broken” – we get it. What are you going to replace it with exactly? How much thought went into this thing? Is your proposal going to unbreak or further break the tax code?

    Do the Cuts Total More or Less than $1.5 Trillion of Lost Federal Revenue?

    The $1.5 trillion number is very important. If projections show that the total revenue differential over the next 10 years is $1.5 trillion or less, a simple Senate majority of 51 votes can pass under a Congressional procedure called reconciliation that is somehow more complicated than our tax code.

    More than $1.5 trillion, and a 60 vote majority is required, meaning that at least eight Democratic Senators need to sign on.

    Our friend Tony Nitti did the math and shows that back-of-the-envelope they’ll need to add back in $1 trillion in cuts to make it work:

    [​IMG]

    Furthermore, do we not care about the Federal Debt anymore? Subtracting even $1.5 trillion in federal revenue over 10 years probably decreases annual receipts by about 5%. Given that we’re running a deficit right now, what measures will be taken in government spending to make up for this additional shortfall?

    What Happens to Existing Tax Credits?

    We discuss the Earned Income Tax Credit briefly above, but will it exist in the new framework? A lot of economists find that the EITC is a powerful incentive to get people to work (since by definition the family must have earned income) and plays an important role in getting lower-income families some tax relief by boosting their refund by small amounts.

    What About Capital Gains / Qualified Dividends?

    There is no mention of changing favorable capital gains rates on long-term investment holdings, nor favorable tax treatment for dividends of US companies. Can we assume that these rates – capped at 15% for most taxpayers – continue in the new framework?

    What about the Net Investment Income Tax (3.8%) on taxpayers earning more than $250,000 per year? Or the additional Medicare tax tied to the ACA?

    We don’t know the answers to these and many other questions, making it speculation at best at this stage.

    Still.

    ***

    If you want to talk to Bill about your tax situation, financial plan or portfolio, hit us up here.

    http://ritholtz.com/2017/10/tax-reform-mean-wealth-management-clients/
     
  16. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  17. Usury

    Usury Gold Chaser Platinum Bling

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    Show me where to opt out. To my knowledge that option is only for clergy with a religious exemption. The rest of us are forced to pay. Which means your comment is correct in that that's across the board for virtually everyone so it's not applicable to the income tax discussion.

    Also it always struck me that some folks paying SS taxes will claim they're paying taxes yet some folks receiving SS benefits will claim it's a paid pension entitlement. So which is it? I wonder how many of the former become the latter after they start drawing?
     
  18. Joe King

    Joe King Gold Member Gold Chaser

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    Knowledge is the first step. Also, just find ways to quit using it. I know, easier said that done, but that's only because of previous generations not questioning anything.

    Actually SS is tied to income tax, because without one, you can't pay it. Gotta have that number on the form.

    It's both. The gov needed extra money, but didn't want to directly raise taxes. So they start a "retirement program" that they collect excess funds for that then get spent as though it were regular tax money. In return they issue a promise to re-tax you in the future in order to be able to make the promise to pay, good.

    In short, it's a ponzi scheme. They collect enough from new participants to pay older participants while skimming off the top as it passes through their hands.

    Edited to add: how is that any different than what Bernie did?
    ...and he gets to rot in jail for it.
     
  19. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    House tax plan 'highly likely' to include fourth rate on wealthy, likely not higher than 39.6%, source says
    • The House tax plan is "highly likely" to include a fourth, higher rate on the wealthy, a senior Republican tells CNBC.
    • The rate likely will not be higher than 39.6 percent, the current top income tax rate.
    • Republicans have faced criticism for the perception that their tax framework helps the wealthy.
    Full article here: https://www.cnbc.com/2017/10/03/house-tax-plan-likely-to-include-fourth-rate-on-wealthy.html
     
  20. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  21. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    We're going to have to wipe out another bunch of RINOs and McLame is going to have to kick the bucket before anything of substance happens
     
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  22. Usury

    Usury Gold Chaser Platinum Bling

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    Seems pretty hopeless, eh?
     
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  23. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    If I was 80% optimistic about Trump when the election happened, I've dropped to about 40%
     
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  24. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Bull Trap: The False Promise Of Tax Cuts

    [​IMG]
    by Tyler Durden
    Oct 5, 2017 8:05 AM


    Authored by Lance Roberts via RealInvestmentAdvice.com,

    Last week, I did a fairly extensive analysis on the release of the 9-page “Trump Tax Cut” plan.

    The most important aspect of that discussion was the difference between 1982, the last time there was permanent tax reform, as compared to today.

    Comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today. Consider the following table:‘”

    [​IMG]

    The differences between today’s economic and market environment could not be starker. The tailwinds provided by initial deregulation, consumer leveraging and declining interest rates and inflation provided huge tailwinds for corporate profitability growth.

    Most importantly, when tax cuts were implemented in the mid-80’s, the U.S. economy was just coming out of back-t0-back recession versus being in the third longest economic expansion on record to date.

    [​IMG]

    However, besides the fact the economic backdrop is diametrically opposed to what is was during the “Reagan years,” we also need to look at the backdrop of who actually pays taxes to begin with.

    Who Pays Taxes
    While the current tax plan has not defined actual income levels as of yet, we can make some assumptions from previous iterations of proposals. The entire premise behind the tax cuts is that it will unleash economic growth, generate millions of jobs, bring back manufacturing to America and lead to higher wage growth.

    However, given that roughly 70% of economy is driven by personal consumption, the tax cuts will need to increase the amount of disposable incomes available to individuals to expand consumption further, thereby increasing overall economic growth.

    So, here is the issue of tax cuts for the middle class. The chart below shows “who pays what in Federal taxes.”

    [​IMG]

    Look at that chart closely.
    • 50% of ALL taxes are paid by the top 10% of income earners.
    • The other 50% of ALL taxes are paid by remaining 90%.
    • The BOTTOM 80% only pay 36% of ALL taxes.
    But it is even more glaring when we look at the taxes paid by just the top 20% of income earners.


    [​IMG]

    Given that roughly 2/3rds of income taxes are paid by the top 20%, the reality is that tax cuts will have their greatest impact in reducing the tax burden of those individuals.

    The picture gets worse when you look at just INDIVIDUAL tax liabilities. The bottom 80% currently pay only about 18% of individual taxes with top 20% paying the rest. Furthermore, the bottom 40% currently have a NEGATIVE tax liability, and with the new tax plan cutting many of the deductions currently available for those in the bottom 40%, it could be the difference between a tax refund and actually paying taxes.

    [​IMG]

    Of course, those in the top 20% of income earners are likely already consuming at a level with which they are satisfied. Therefore, a tax cut which delivers a few extra dollars to their bottom line, will likely have a negligible impact on their current levels of consumption.

    The problem, as I have detailed previously, is that the vast majority of Americans are living paycheck to paycheck. According to CNN, almost six out of every ten Americans do not have enough money saved to even cover a $500 emergency expense. That lack of savings can be directly contributed to the lack of income growth as noted recently by Bloomberg:

    “Newly released income and wealth data from the Federal Reserve Board’s triennial Survey of Consumer Finances show that America’s richest families enjoyed gains in income and net worth over the last decade. Not part of the top 10 percent? Then your income probably fell. The data show that families ranked in the highest percentile saw an income gain of $16,300 from 2007 to 2016. Those below are still making less money.”

    [​IMG]

    So, with 80% of Americans living paycheck-to-paycheck, the need to supplant debt to maintain the standard of living has led to interest payments consuming a bulk of actual disposable income. The chart below shows that debt has exceeded personal consumption expenditures. Therefore, any tax relief will most likely evaporate into the maintaining the current cost of living and debt service which will have an extremely limited, if any, impact on fostering a higher level of consumption in the economy.

    [​IMG]

    But again, there is a vast difference between the level of indebtedness (per household) for those in the bottom 80% versus those in the top 20%.

    [​IMG]

    But Corporate Tax Cuts Are The Key, Right?
    Yes, corporate tax cuts will immediately drop to the bottom lines of corporate income statements. When that earnings boost is combined with any repatriated dollars to buy back shares, there will be an earnings expansion for the first year. (You didn’t REALLY think they would use repatriated dollars to expand production and hire workers did you?)

    Importantly, while there is a boost to bottom line earnings, there was NO increase in top-line revenues.

    However, from an economic perspective, tax cuts for corporations will have only a minor impact in reality. The first chart below shows total federal tax revenue by source.

    [​IMG]

    As you can see, corporate taxes are less than 10% of the total taxes collected by the Government.

    But more importantly, it is the promise of cutting the corporate tax rate from 35% to 20% that has gotten the financial markets all excited.

    There’s just one problem. Roughly 80% of all corporations already pay rates far lower than 20% and any reduction in deductions for corporations will actually lead to higher taxes being paid. As shown below, 90% of all corporations currently have a tax rate below 10%.

    [​IMG]

    It is a myth that the U.S. has the highest corporate tax rate in the world. We simply don’t.

    This was also an observation made by Dr. John Hussman this week:

    “I’ll add that another feature of Wall Street’s blissful delusion is the notion that ‘U.S. corporate taxes are the highest in the world.’ It’s striking how disingenuous this claim is. The fact is that among all OECD countries, the U.S. is also the only country that does not levy any tax at all on corporate value-added in the production of goods and services.”

    [​IMG]

    “The main point is this. The argument that U.S. taxes on corporate profits are somehow oppressive relative to other countries is an apples-to-oranges comparison. It wholly ignores that the U.S. levies no value-added tax on corporations at all, whereas the value-added tax is the principal revenue source for most other countries. The rhetoric on corporate taxes here is unfiltered effluvium.

    The chart below presents a clearer picture of U.S. corporate profits taxation. Actual taxes paid by U.S. companies, as a share of pre-tax profits, have never been lower, outside of the depths of the global financial crisis.”

    [​IMG]

    Again, as with individual taxes, today ain’t 1982 or 1986.

    The effective outcome of tax cuts at this juncture will result in:
    • Only a minimal impact to economic growth, if any at all.
    • An expansion of the debt of between $2-5 Trillion depending on next recessionary drag.
    • A ballooning of the budget deficit as entitlements rise with the expansion of child tax credits.
    • A further divide in the “wealth gap” between those in the top 10% and the bottom 90%.
    This issue of whether tax cuts lead to economic growth was examined in a 2014 study by William Gale and Andrew Samwick:

    “The argument that income tax cuts raise growth is repeated so often that it is sometimes taken as gospel. However, theory, evidence, and simulation studies tell a different and more complicated story. Tax cuts offer the potential to raise economic growth by improving incentives to work, save, and invest. But they also create income effects that reduce the need to engage in productive economic activity, and they may subsidize old capital, which provides windfall gains to asset holders that undermine incentives for new activity.


    In addition, tax cuts as a stand-alone policy (that is, not accompanied by spending cuts) will typically raise the federal budget deficit. The increase in the deficit will reduce national saving — and with it, the capital stock owned by Americans and future national income — and raise interest rates, which will negatively affect investment. The net effect of the tax cuts on growth is thus theoretically uncertain and depends on both the structure of the tax cut itself and the timing and structure of its financing.”

    Again, the timing is not advantageous, the economic dynamics are not supportive and the structure of the tax cut itself is not self-supporting.

    As Hussman concludes:

    “The potential effect of even a substantial percentage reduction in statutory rates for several years is quite small when the present value of the tax reduction is compared with existing equity market capitalization. The likely cumulative impact comes to just a few percent of stock market value.

    Against that, consider that the most reliable market valuation measures we identify (as measured by their correlation with actual subsequent S&P 500 total returns in market cycles across history) are currently between 2.5 and 2.7 times their historical norms (that is, 150% to 170% above those norms).

    Put simply, it seems misguided to imagine that ‘tax reform’ will somehow make the most obscene speculative bubble in U.S. history something other than the most obscene speculative bubble in U.S. history.”

    Put simply, you can’t solve a debt-problem with tax cuts.

    http://www.zerohedge.com/news/2017-10-05/bull-trap-false-promise-tax-cuts
     
  25. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Tax The Rich

    [​IMG]
    by Econophile
    Oct 4, 2017 6:25 PM


    Even though I have said this before apparently no one was listening so I have to say it again* because every time a new tax reform bill is proposed, the same clichés are trotted out and most of them are wrong. The purveyors of these clichés know they are wrong but they don’t care because they are trying to manipulate you to their ends. And, people fall for them.

    Here is what the polls say about what Americans think about taxes (Gallup, Pew Research):
    • 51% think they are paying too much in taxes, especially the middle and lower classes.
    • Even more (63%) think the rich are not paying enough.
    • 56% think the tax system is unfair, rigged for the wealthy.
    • 67% think corporations are not paying enough.
    • Most Americans (59%) think the government ought to redistribute wealth more fairly.
    These views, based on Progressive propaganda, are wrong. Here are the facts (latest data, 2014, 2015):
    • The top 10% of taxpayers account for 47% of adjusted gross income (AGI) yet they paid 71% of all income taxes and they pay at the highest rate.
    • The top 1% (only 1.4 million returns, 2014) account for 21% of AGI, yet they paid almost 40% of all income taxes.
    • The top 400 taxpayers alone are responsible for 2.3% of all income taxes.
    • The bottom 50% (income) of taxpayers pay only 2.75% of income taxes.
    • The bottom 75% pay only 14% of income taxes.
    • The average tax rate for the bottom 50% was only 3.5% and the average rate for the top 1% was 27.2%.
    • If you taxed away all AGI of those making $1 million and more ($1.455 trillion), it would run the government for 4.6 months (2015 data) and then it would be gone.
    Think about the meaning of this. Wealthier taxpayers, because they are paying more than their fair share of taxes, are carrying the tax burden for the bottom 75%. If anything, the bottom 75% of taxpayers are either not paying taxes or aren’t paying enough as a percentage of their income. Since income taxes supply about 50% of tax revenues, we are over-relying on the rich to pay for government which means we have a fragile tax system. The bottom 75% ought to grateful for rich people.

    Then there is the corporate income tax which most Americans think is too low and that corporations should pay more. I have no idea why people think this. When it comes down to it, it is we who ultimately pay corporate taxes. If Apple’s taxes go up along with everyone else’s, we are going to pay more for the new iPhone.

    We have the highest corporate income tax rate of the 35 advanced economies that make up the OECD. Ours is 35% whereas Canada’s, for example, is 15%. You probably have heard that many of our corporations do business around the world and that they have a nice stockpile of cash abroad (about $2.7 trillion). That money is staying abroad partly because it would be taxed here at a higher rate if they brought it home.

    Higher corporate taxes are a bad idea. Instead we need to reduce these taxes to keep our companies competitive with the rest of the world. Wouldn’t it be better if we incentivized corporations to invest in America? Wouldn’t more cash in the hands of productive profitable companies result in more investment, more productivity, more jobs, more profits, and more prosperity? You know the answer.

    And to you proponents of higher taxes, there is one more thing you need to know. And that is, history has shown that even if you raise taxes, the government’s tax revenue as a percentage of GDP will be about the same. 80+ years of data bears out the fact that regardless of tax rates government revenue will always be about 19% of GDP. How could that be? The reason is that most of us, rich or not, individuals or corporations alike, will adjust our activities to minimize our taxes.

    There is a serious problem with that though. Much of the jiggering it takes to minimize taxes disincentivizes productive activities and incentivizes activities that make sense only because they reduce taxes. These activities can be tax shelters dreamed up by clever accountants and lawyers or just reducing one’s productive output to avoid working for the government rather than for one’s own benefit. This distorts the economy and the result is that investment capital is steered into less productive activities and the economy (us) is worse off.

    So now we have a new president and another attempt to “reform” the tax system. President Donald Trump has put forth a rough outline of his Administration’s tax reform proposal, which, he claims, will give the middle-class tax and corporations relief. Pretty much every president promises to reduce taxes on the middle class and raise taxes on the rich.

    We can express no opinions of the tax bill yet because it is likely to be hacked apart by Congress who have lobbyists pleading for special tax benefits. It will take some time to see what emerges from Congress. But on the face of Trump’s brief outline of tax proposals, should they be adopted, they would be good for the economy and thus good for taxpayers. More money in our hands and in corporations go to more productive uses than for nonproductive government uses.

    Here are some of the good points proposed by Trump:
    • A reduction and simplification of tax rates.
    • Benefits for the middle class such as doubling the standard deduction and increased child tax credits.
    • Repeal of the Alternative Minimum Tax.
    • A 20% corporate tax rate.
    • Possible tax reduction on repatriated corporate earnings held abroad.
    • A repeal of the death tax.
    At this point I view these as pie-in-the-sky because the Trump Administration seems ill-prepared to battle Congress to achieve its legislative goals and they appear to be willing to increase the top tax rate if it is expedient to do so.

    Our fiscal problems are not so much with our tax system but rather with government spending. Taxes will always be insufficient to fund government operations because our politicians spend and spend on ineffective and wasteful programs and policies without regard to the consequences. Higher taxes will only distort the economy, weaken productivity, cause job losses, and bring us less growth and more malaise. Spending cuts are the only cure. The unfortunate reality is that this fiscal morass is not likely to change any time soon.

    *Paraphrasing André Gide, “Everything has been said before, but since nobody listens we have to keep going back and begin all over again.”

    Source: AnIndependentMind

    http://www.zerohedge.com/news/2017-10-04/tax-rich
     
  26. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Today's paper................

    The report Trump officials don't want you to see
    • By CATHERINE RAMPELL
    • 8 hrs ago

    Psst. Hey, you. Wanna read something dangerous?

    It's a government document so incendiary that the feds have tried to suppress it. They've purged it from their websites and disavowed its claims.

    But it's not about Roswell, or who killed JFK. It's not even about climate change.

    It's something far juicier: a 34-page technical paper about corporate income taxes.

    And it's a document that matters if you're trying to game out whether (and how much) enormous corporate tax cuts will trickle down to workers.

    See, prior to 2008, whenever Treasury crunched the numbers on this subject, staffers assumed that corporate income taxes were borne only by owners of capital. That is: shareholders.

    But toward the end of the George W. Bush administration, the non-political career people in Treasury's Office of Tax Analysis, a sort of internal think tank, began developing a new model taking into account newer research.

    In 2012, they released a paper explaining their latest findings: that 82 percent of corporate taxes were borne by capital owners, and 18 percent were borne by labor. Workers don't literally write the check, of course, but corporate taxes may discourage investment, and therefore lead to lower wages.

    Figuring out who actually bears the burden of taxes, and who therefore benefits from corporate tax cuts, is thorny. But the answers these Treasury staffers produced are not so far from those of most other major nonpartisan tax crunchers, including the Congressional Budget Office, the Joint Committee on Taxation and the Tax Policy Center.

    The Treasury paper was subsequently published in an elite academic journal. Outside of tax wonk circles, the numbers were generally ignored.

    Until now.

    That's because Treasury Secretary Steven Mnuchin has been lately claiming that nearly all of the corporate tax burden is passed on to workers. It's an argument that he has to make if he hopes to sell the administration's tax cuts -- which even a large share of Republicans opposes -- as a helping hand for the Forgotten Man.

    On Fox News, Mnuchin claimed that "most economists believe that over 70 percent of corporate taxes are paid for by the workers." At an event in Kentucky, he declared that "over 80 percent of business taxes is borne by the worker."

    Tax watchers and interviewers began pointing out that Mnuchin's claims were at odds not only with most credible estimates but also with those of his own staff.

    Which clearly annoyed Mnuchin.

    So Treasury took the unusual -- unprecedented? -- step of quietly deleting the inconvenient findings from its website.

    It's not clear when this erasure happened. The paper's disappearance was first reported last week by the Wall Street Journal's ace tax reporter, Richard Rubin. When I requested an interview with Treasury about the deletion, a spokesperson emailed me that "the paper was a dated staff analysis from the previous administration. It does not represent our current thinking and analysis."

    Which is a peculiar excuse, and not only because the paper was produced by nonpolitical staffers who still work at Treasury.

    Updates to methodology -- if that's really all this was -- do not require deletion of older technical reports, which normally stay archived online for transparency reasons. Four decades' worth of other Office of Tax Analysis working papers somehow remain online, even though many of those have been superseded by subsequent reports.

    In removing the paper, Trump officials are making it easier to conceal what their tax plan does, and whom it helps. This is part of a broader GOP effort to duck accountability.

    The Senate budget resolution, for example, includes language that could help sideline any CBO analysis of the tax bill.

    Surrogates on the Hill and executive branch have also been (somewhat incompetently) smearing the nonpartisan Tax Policy Center. The center recently produced a preliminary analysis of the Republican tax framework. It estimated that by 2027 the proposal would increase deficits by $2.4 trillion, with about 80 percent of tax cuts going to the top 1 percent.

    Asked about these numbers on ABC's "This Week," Mnuchin claimed that no one can credibly estimate the effect of the plan, given how many details are still up in the air. In virtually the same breath, he also asserted that the plan will reduce deficits by $1 trillion and primarily benefit the middle class.

    Those two statements can't both be true, at least not simultaneously.

    In other words, no matter how hard Trump officials try -- and as this report disappearance demonstrates, they're trying hard -- they can't keep their own lies straight.

    Catherine Rampell writes for The Washington Post. Email: crampell@washpost.com. Follow her on Twitter, @crampell.

    Enjoying our content? Become a Bucks County Courier Times subscriber to support stories like these. Get full access to our signature journalism for just 44 cents a day.

    http://www.buckscountycouriertimes....cle_ecd53223-3c64-5237-8d23-dde40a0b9451.html
     
  27. Joe King

    Joe King Gold Member Gold Chaser

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    Consider the source.

    They assumed that? WoW! That must make it so.

    What is a "credible estimate"? One that agrees?


    How could higher corporate taxes not cost labor?

    A business is just another entity. If we increase costs of doing business, where else can the money for the taxes come from?

    Just like the electric bill is taken into consideration when determining a business model, taxes will be too. The final cost of goods and services must, at the least, include all the costs of doing business. Taxes are in fact a cost of doing business. If the cost of one thing rises, adjustments are made in other areas to offset the higher costs. Those adjustments could come in the form of lower wages, fewer workers, higher costs for the product and/or lower quality materials in the product. It is also possible it could result in lower dividends for stockholders.
    ...but to just assume that stockholders will always take the hit is just naive and ignorant thinking.

    Why is that so hard for so many to understand?
     
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  28. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  29. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  30. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Alton likes this.
  31. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    After "Surreal" Feud Between Trump And Corker, "Tax Reform Is Dead. Full Stop": Cowen

    [​IMG]
    by Tyler Durden
    Oct 9, 2017 8:39 AM


    While Wall Street appears to have ignored the latest political spat within the Republican party over the weekend, in which Donald Trump lashed out at outgoing Senator Bob Corker, while the latter compared the White House to "daycare for adults", and later warned Trump may launch World War III`, this particular feud involving the president may have dire consequences for the market, which in recent weeks has repriced a more than 60% probability (according to Goldman) that Trump's tax reform will pass.

    Well, according to Cowen analyst Chris Krueger, not so fast. In a note released this morning, Krueger writes that "tax euphoria may break this week, with the Senate budget back to zero-margin on vote as President Trump, Sen. Bob Corker feud." And without a budget, "tax is dead. Full stop," Krueger writes.

    Cowen now sees the margin for passing a budget in the Senate as more challenging than in the House, plus "radically different" documents will have to be merged and passed again.

    Passing FY 2018 Senate budget has "some eerie parallels" to health care, as no Democrats will vote for the budget; Sen. Rand Paul is expected to vote no because it doesn’t cut spending fast enough; Sen. John McCain also sounds like a no as it doesn’t repeal sequester, which disproportionately hits the Pentagon.

    That means GOP can only afford one more defection, with Corker, a deficit hawk, engaging in "one of the more surreal public correspondence exchanges in recent memory" days after saying Secretary of State Rex Tillerson, Defense Secretary Jim Mattis and White House Chief of Staff John Kelly help keep U.S. from chaos.

    [​IMG]


    "Either Trump realizes that Corker can sink the remainder of the Trump/GOP legislative effort and is upset by that reality, or he didn’t/doesn’t know and just made it a reality. Either way, we see ZERO upside for the budget process/tax reform in this Twitter tantrum with the policy downside limit-down"

    Maybe not: because in the premarket on Monday, bank stocks sensitive to potential tax cuts, are once again rising, suggesting all is well: JPMorgan up 0.3%, BofA +0.3%, Morgan Stanley +0.8%. Or perhaps this is just one more example of a market that is now so bored with incremental news flow which has zero impact on risk assets, that it is simply yet another "shock which no longer shocks." Then again, as so many Wall Street analysts have warned, it is only a matter of time before one shock does finally shock the S&P, unleashing the spire of shocks, built of over years and years of non-resolution, and merely swept away under the rug with trillions in central bank liquidity injections.

    Stated simpler, if indeed Trump tax reform is dead - again - a sharp market turnaround may be imminent.

    http://www.zerohedge.com/news/2017-...mp-and-corker-tax-reform-dead-full-stop-cowen
     
  32. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  33. edsl48

    edsl48 Silver Member Silver Miner

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    The rich pay the taxes based upon income statistics and yes they do. At the same time though the rich can be quite crafty at seeing ways to lower their taxable income. To the simple salary owner buying a big house generally comes with hefty interest and real estate tax expenditures. That means taxable income, after those two amounts, will often put the individuals in lower income stratas. The charitable foundation angle that will provide jobs for your descendants is another great idea for the rich. Each of these could amount to a full multi inch research paper but I think you grasp the idea.
    Eliminating the home interest and local tax deduction and replacing it with an increased standard deduction, considering the above, would be a real kick in the rear for the upper salaried individuals and a big benefit for the lower income individuals.
    Funny how the media slams that idea almost as if it, the media, is spreading fake news on the tax cuts that will actually,for once, benefit the middle class at the expense of the categorized rich.
     
  34. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  35. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  36. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Trump uses truckers to elevate tax reform push

    President promotes industry's image during Pennsylvania speech.
    Oct 11, 2017 Neil Abt

    A video replay of Trump's speech to truckers is available through the White House.

    [​IMG]
    Trump discusses his plan for tax reform with truckers in front of a specially designed tractor-trailer.


    Related Media
    [​IMG]
    Trump signs executive order to speed infrastructure permitting process


    President Trump promised a group of truckers during a speech in Pennsylvania that his plan to lower taxes will provide financial relief to their businesses and families.

    “America first means putting America’s truckers first,” said Trump, speaking in front of a tractor-trailer decorated with the slogans “I Love Trucks” and “Truckers for Tax Reform.”

    Trump made frequent references to the heroic and underappreciated role that truckers play in America’s economy. He promised to keep fuel prices low and advance a $1 billion infrastructure package “with a special focus on roadways and highways.”


    The central theme of the speech, however, was on his previously announced framework to modernize the “outdated, complex, and extremely burdensome tax code.”

    The result for truckers will be that “you will have so much money to spend,” he said.

    Among the highlighted items of the framework were reducing the number of tax brackets, lowering tax rates, boosting credits for child and elderly care, and making it easier for companies to bring back overseas profits.

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    Trump also pledged that companies will be able to write-off 100% of new equipment in the same year it is purchased, and to cut the marginal tax rate for small and mid-sized businesses to the “lowest level in more than 80 years.”

    Trump recognized Kevin Burch, president of Jet Express and chairman of American Trucking Associations (ATA), who said he would “be able to invest in new equipment and additional training for workers” if tax legislation is passed.

    Additionally, Trump called for the permanent end to the estate tax, often referred to as the death tax.

    Trump cited Calvin Ewell, president of trucking fleet H.R. Ewell, as an example of a business owner who could struggle to pass down his family-owned business if that tax is not repealed.

    “While trucking sustains the vitality of the U.S. economy, we also carry a heavy tax burden, paying the highest corporate tax rate of any transportation mode,” said ATA president and CEO Chris Spear. “That is why we joined President Trump at today’s event, in support of his plan to reform our tax code. We urge Congress to follow the president’s lead and pass tax reform by year’s end."

    One day before Trump’s speech, White House press secretary Sarah Sanders confirmed during her daily briefing there was not yet any actual tax reform legislation.

    “Our priorities remain the same. But the final piece of legislation hasn’t been finalized, so this is a time of negotiation. But the principles and the priorities that we’ve laid out are not up for negotiation,” she said.

    [​IMG]
    Don Daseke is optimistic tax reform legislation will benefit all truckers.

    Ahead of the speech, Daseke Inc. CEO Don Daseke told Fleet Owner he was optimistic Trump would be able to lower tax rates, bring back overseas corporate profits, and boost economic growth at home.

    “We, like all business executives, are in favor of all of those things,” said Daseke, whose company is a flatbed and specialized freight specialist.

    In response to a question, Daseke said he believes Trump’s tax plan will benefit all truck drivers, including the 1,000 owner-operators his company utilizes.

    “If it is good for the American economy, it is good for largest trucking company and the smallest trucking company,” he said of the tax proposal.

    He also suggested that including truckers as part of the tax speech would help keep the focus on the desperate need for a new federal infrastructure plan.

    http://fleetowner.com/finance/trump...m=email&elq2=6ef468cf5fc94f23919a242e1111296d
     
  37. Krag

    Krag Planet earth Platinum Bling

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    It is an asinine give away to the wealthiest. They should take the fear away for those living on survival incomes up to a reasonable number, $100K? Self employed should not be taxed at the crazy rates they are. People who are not filing or are behind should be helped whenever possible to run their business without irrational fears.

    I have zero sympathy with those with large inherited money; the system should be encouraging the physical productive economy, not enabling and pandering to lazy, inherited, shyster type business activity; especially capital gains and gamers.

    None of the Founders would agree with the low tax rates on the wealthy; Franklin, Washington, Jefferson, Madison all put their fortunes and honor on the line. They did not believe in the aristocracy, the elites, and other rich bums. Hamilton never trusted the wisdom on the mainstream people to make proper political choices.
     
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  38. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  39. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    GOP tax plan: Fair & simple or simply unfair?
    RT America



    Published on Oct 12, 2017
    President Donald Trump and Republicans in Congress are determined to pass tax reform by the end of the year. Ed Schultz, host of “News with Ed,” explains and demolishes their 9-point “fair and simple” plan. Then, Valerie Ervin of the Working Families Party, and Andrea Kaye, conservative talk show host, debate the wisdom of the planned reforms, the proper role of government and “what the American people want.”
     
  40. Cigarlover

    Cigarlover Gold Member Gold Chaser

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    I don't have a problem with anyone keeping their money or passing it on to their children. I don't care how much they have or made or how they made it unless they are selling children or some stupid sheet.

    The real problems that need to be addressed are the size of Gov and their benefits packages
    The militaries continuous unconstitutional wars, and a welfare/ entitlement program.

    At a minimum the federal gov needs to be reduced in size by about 40%. Those that are left need a reduction pay and benefits of at least 50% to be more in line with real Americans.

    Our Military budget is 825 billion. The next 10 largest countries military budgets combined don't equal that amount. Follow the constitution and we can cut the budget to about 150 billion to maintain a state of readiness. If we are ever invaded or attacked we can ramp up as needed but we never would be unless the Government allowed it to happen.

    Get rid of welfare, medicaid/car as well as HUD, fannie and freddie the student loan program and on and on it goes.. getting rid of all of these things would lower costs on everything as well as reduce the size of the federal Gov.

    We could right a gazillion page novel on all the individual cuts and changes that need to take place at the federal level. Getting rid of the federal reserve would also help.

    We could get rid of the fed, pay off the 20 trillion in debt tomorrow and issue money debt free and never tax anyone. Congress has that authority. Of course thats a death sentence to anyone who tries it. Ask JFK.
     

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