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Trump's Tax Plan

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



  1. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Someone explain to me why there is a mortgage interest deduction?
    It does not compute.
    It is a gift to the people in the real estate industry.
    It does nothing for the middle class joe6pk.
     
  2. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    So even the #fakenews WashingtonPost says the story that the middle class will pay more is a lie. Weird.
    The one democrat in Congress from Kentucky said the tax plan is no good because the middle class gets a pittance, and the poor don't get a larger handout. Sounds about right from a Democrat.

    WaPo tears apart Dem talking point that tax cuts only benefit wealthy
    3 minutes
    [​IMG]Jack Crowe, DCNF

    The Washington Post soundly debunked the claim, made by numerous Democratic lawmakers, that the GOP tax reform bill will result in a tax increase for middle class households in a fact check published Thursday.

    [​IMG]
    (AP Photo/Evan Vucci)

    A number of prominent Democratic lawmakers have publicly claimed the tax reform bill, scheduled to be released Thursday, will result in an average tax increase of $794 for households making up to $86,100 annually. WaPo fact checkers traced the claim back to a report produced by Democrats on the Joint Economic Committee, that predicts that some 8 million households making less than 86,100 per year will see their taxes increased.

    “If enacted, the Republican tax reform proposal would saddle 8 million households that earn up to $86,100 with an average tax increase of $794—a substantial expense for working families,” the report reads.

    The Democratic lawmakers, including Sens. Kamala Harris of California, Robert Casey of Pennsylvania and Jeff Merkley of Oregon, falsely asserted the increase will apply on average to middle class families omitting the key detail that the increase will in fact be confined to “8 million households.”

    The distinction is important as 8 million households represent just 6.5% of the nearly 122 million households in the bottom three income quintiles. Roughly 80 percent (97 million) of households in the bottom three quintiles will receive a tax cut, according to the report from which the false claim originated. Additionally, every quintile on average receives a tax cut.

    While the most substantial average tax cut will go to the top quintile, that group also contains the largest percentage of households (32.3) that see a tax increase.

    The fact check concludes with a harsh condemnation of the lawmakers who disseminated the demonstrably false talking point.


    “In their haste to condemn the GOP tax plan, Democrats have spread far and wide the false claim that families making less than $86,100 on average will face a hefty tax hike,” the fact check reads. “Actually, it’s the opposite. Most families in that income range would get a tax cut. Any Democrat who spread this claim should delete their tweets and make clear they were in error.”

     
  3. FoundingFathers

    FoundingFathers Founder Founding Member Site Mgr Site Supporter

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    The best part is the elimination of AMT.
     
  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  5. edsl48

    edsl48 Silver Member Silver Miner

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    Estate tax planning is quite a profitable business for attorneys and CPAs. They profit handsomely from it and the tax is easily gotten around in many ways that are too long for a discussion here.
    Consider when one person is given a break someone else has to pay extra to pick up the slack. Why should high earners who buy mansions get a big real estate derived deduction while the middle classes have to pick up the difference? Imagine the deductions some of those Hollywood liberals generate with their mansions and the extra taxes they will have to pay if their deductions are limited? Then look at your tax return from last year and compare what your deductions are before making a decision.
    Consider also why if a local community institutes a tax for a swimming pool why should people in other districts pay extra to make up for the swimming pool tax deduction?
    The tax swamp is deep and wide and we can hear all the special interests whining as we sit. It is time to drain the tax swamp and while this will be drops in the bucket it is a start and to add to it why not t ax the earned income tax credit as income so that the so called poor have to report their actual needs after adjusting for the funding from the EIC?
     
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  6. platinumdude

    platinumdude Gold Chaser Platinum Bling

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    Well with the capping of all these deductions, I think it would be difficult to hit the existing AMT.
     
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  7. edsl48

    edsl48 Silver Member Silver Miner

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    How sad. Some of us no longer might have to subsidize big families and big houses. In other words pay your own way for a change


    Tax Code Overhaul Details: Homebuilders, Tesla, and Those With Lots of Kids Come Out Worse

    [​IMG]byMike Mish Shedlock
    22 hrs
    [​IMG]
    [​IMG]
    ncome Brackets

    Currently there are seven federal income tax brackets taxed at 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. The House bill consolidates that to four.

    12% (on the first $45,000 of taxable income for individuals; $90,000 for married couples filing jointly)

    25% (starts at $45,000 for individuals; $90,000 for married couples)

    35% (starts at $200,000 for individuals; $260,000 for married couples)

    39.6% (starts at $500,000 for individuals; $1 million for married couples)

    The is no marriage penalty under this setup. In fact, married couples come out ahead in many instances where one wage earner makes most or all of the money.

    Standard Deduction

    The bill raises the standard deduction for singles to $12,000 from $6,350 and it raises it for married couples filing jointly to $24,000 from $12,700.

    This will dramatically lower the number of people who itemize deductions, especially when combined with reductions in mortgage interest and state income tax deductions.

    Personal Exemptions Eliminated

    Today you're allowed to claim a $4,050 personal exemption for yourself, your spouse and each of your dependents. The House bill eliminates that option.

    Families with three or more kids may fare worse under the revised code.

    New Family Credits and Expansion of Child Tax Credit

    The bill creates new $300 credits for non-child dependents and it also increase the child tax credit to $1,600, up from $1,000, for any child under 17. But these credits apply only to taxes paid.

    Currently people can get money back. This setup will eliminate fraud but social advocates will scream.

    Dependent Flexible Medical Spending Accounts Eliminated

    Some employers allowed parents the opportunity to save up to $5,000 of their income in a dependent care flexible spending account. That option is gone.

    State and Local Tax Deductions Eliminated

    States with high state taxes will howl but those deductions are gone. Again, this chews into the number of people who benefit from itemizing.

    Mortgage Interest Deduction Reduced

    The bill preserves the mortgage deduction for existing mortgages. But going forward you can only claim a deduction for interest on mortgage debt up to $500,000, down from $1 million today.

    The Tax Policy Center estimates the percent of filers who claim the mortgage interest deduction would fall to 4% from 21% because of the higher standard deduction.

    AMT Gone

    The much despised as well a complicated Alternative Minimum Tax is gone. The idea behind AMT was to hit the richest taxpayers. In practice it hit those with incomes between $200,000 and $1,000,000. The Tax Policy Center estimates that elimination of the AMT will reduce revenue by $440 billion in the first decade.

    Estate Tax Repealed in 2024

    The estate tax today affects those with more than $5.5 million in assets (or $11 million if you leave a spouse behind). That about 0.2% of estates.

    There will be lots of bickering over the repeal and some do not think it will survive. The house bill did not repeal the tax until 2024 but it did double the exemption levels.

    Corporate Tax Rates

    The New York Times notes the plan sticks to President Trump’s goal of a 20 percent corporate tax rate, down from a maximum of 35 percent today.

    • The bill will levy a global minimum tax of 10 percent, which would apply to income that high-profit subsidiaries of American companies earn anywhere in the world. The effort is aimed at preventing companies from shifting profits abroad and grabbing back some of the tax revenue on income earned overseas. Those profits are currently not taxed until they are returned to the United States, giving companies an incentive to keep that money offshore since they are taxed at the current corporate tax rate of 35 percent.
    • The bill would force companies to pay a one-time, 12 percent tax on liquid assets held overseas, like cash. The tax, which is reduced from the current 35 percent tax rate, would be payable over a period of eight years. For illiquid assets, like equipment or property, the tax rate would be 5 percent.
    • It would also force American subsidiaries of foreign-owned companies to pay a 20 percent excise tax on any payments sent back to foreign affiliates.
    Pass-Through Income

    Small business S-Corporation owners (I am one of those) may benefit from pass-through tax proposals. The New York Times reports:

    • Republicans stuck to their promise of lowering the tax rate for “pass through” businesses to 25 percent. But to prevent the rate from becoming a loophole for all sorts of individuals, tax-writers have created a formula they say will ensure that business owners will pay a higher individual tax rate on income that they receive as wages. The formula would be applied based on the circumstances of the business.
    • That provision is not enough to satisfy the National Federation of Independent Business, which said in a statement it is “unable to support the House tax reform plan in its current form.”
    The lowering of the pass-through rate to 25% may benefit those making more individuals making more than $200,000 or families $260,000. Those are the amounts at which the 35% tax bracket kicks in. Details of how this all works are not available.

    As it stands, I will not benefit much, if at all from the legislation, because of the lowering of the overall tax rates.

    Not the Final Product

    This is not the final product. Lobbying will be intense. Nonetheless, I expect something along these lines will become law.

    The bill is a step in the right direction, but it could be much simpler yet.

    Mike "Mish" Shedlock
     
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  8. Joe King

    Joe King Gold Member Gold Chaser

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  9. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    I fully agree there shouldn't be a mortgage int deduction, or an income tax for that matter

    That said, the deduction allows everyone who takes a mortgage (and itemizes) to buy more house than they could otherwise afford. At the margin, this is the difference between being able to buy a house or not

    But yes, at the expense of the other taxpayer who aren't taking advantage of the benefit

    I'm too hard case to carry debt, I don't want to owe anyone ever again in my life. So I don't get the benefit but when I was 20 and bought my first house, I calculated my expected tax deduction into my budget to determine whether I could afford it.
     
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  10. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    ^^^^^
    One thing with your post I don't agree with,
    "At the margin, this is the difference between being able to buy a house or not"

    I don't buy it. If you are at the "margin", and this tax deduction is the make or break, that means you have enough tax liability to itemize above the standard deduction so you can claim the mortgage tax deduction. This is not somebody who is on the edge of house or no house IMHO. I purchased my home and I was never able to use the tax deduction as I couldn't itemize above the standard deduction and my interest payments were too low.

    I'm back to my AARP advice column.
    [​IMG]
     
  11. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    My reference point here is first hand in the 1980s economy. I was young but making enough that the mortgage I took allowed me to itemize. I was able to use the lower tax rate to afford the house.

    I agree with the statement in the photo you posted but it has nothing to do with my point. It's an argument against taking a mortgage to "save on taxes"

    I'm saying if you first stipulate that you're going to buy a house and must take a mortgage to do so, and assuming the int deduction is enough to justify itemizing, then I believe it's inarguable that you can qualify and afford more home than you otherwise would.

    At the margin this pushes people that can't afford a house into just being able to afford one

    It's a giveaway at tax payer expense
     
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  12. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    ^^^^^^^^
    I think we may be disagreeing on a distinction without a difference.
    You spend $100 on interest to get $25 off your taxes.
    And this makes a house more affordable or a better deal?

    So yes, the AARP article is relevant.

    At best it is an incentive to purchase a home, financed by the taxpayer.
    As we have recently found out, we as a nation would have been better off if less people bought houses [meaning those on the margin] and those that bought houses bought less house. So the tax deduction "incentive" is an enabler of bad investment.
    Follow the money.
     
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  13. Joe King

    Joe King Gold Member Gold Chaser

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    It's merely just one more sad case of DC using the tax code to pick winners and losers. When they do that, we all lose.
     
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  14. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    I just got my property tax bill. Although there is no state income tax in Florida I would negatively be affected if there is no capital gains deduction. I own a business and multiple pieces of property which exceed $10k in property taxes. Then figure in mortgage interest. I would still be in the same 25% bracket, but with fewer deductions.
     
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  15. platinumdude

    platinumdude Gold Chaser Platinum Bling

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    How about a 12% flat tax with no deductions or credits and the only 401k is the roth type. Then spending cuts to balance the budget.
     
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  16. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  17. SongSungAU

    SongSungAU Midas Member Midas Member

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    Hell no! to a VAT

    Why the VAT May Seem Good in Theory, but Is Bad in Reality
    March 30, 2015 by Dan Mitchell
    https://danieljmitchell.wordpress.c...ay-seem-good-in-theory-but-is-bad-in-reality/

    excerpt:

    Simply stated, unless the 16th Amendment is repealed and replaced with a new provision forever barring the re-imposition of any taxes on income, a VAT inevitably would be a new source of revenue and become a money machine to finance ever-larger government.

    Just look at the evidence from Europe if you’re not convinced.

    That’s why the VAT is bad in reality.
     
  18. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Spot on, Europe is the example. A VAT ends up just another gigantic tax on EVERYTHING that goes on economically.

    Here's a couple of quotes on home ownership and the tax plan - pointing out the "fear mongering" by real estate professionals.
    From ZH today, http://www.zerohedge.com/news/2017-11-05/trump-about-crush-home-prices-counties-voted-hillary

    Going back to Friday, the biggest surprise was that mortgage interest would only be deductible on mortgage balances up to $500K for new home purchases, down from the current $1mn threshold. Existing mortgages would be grandfathered, such that borrowers with existing loans would still be allowed to deduct interest on the first $1mn of their mortgage balances. In addition, only the first $10K of local and state property taxes would be allowed to be deducted from income. Finally, married couples seeking a tax exemption on the first $500K of capital gains upon a sale of their primary residence will need to have lived in their home for five of the past eight years, versus two out of the past five years under current rules. This capital gains tax exemption would also be gradually phased out for households that have more than $500K of income a year.

    My comment: See the above, what is middle class about a million dollar home? This tax deduction and capital gains exemption is a hand out from the taxpayer to the very wealthy IMHO. I'm happy if you can afford a $500k to a $1m house, but it seems to me that in that range it is no longer a house but a large investment. IMHO pay tax on it if you make a huge gain, after all we are not talking about SHELTER any more.

    Now see below what the real estate people have to say.

    As might be expected, the above provisions caused an uproar in the realtor and homebuilding industries, as Barclays Dennis Lee points out. The National Association of Realtors (NAR) released a statement commenting that “the bill represents a tax increase on middle-class homeowners”, with the NAR President stating that “[t]he nation's 1.3 million Realtors cannot support a bill that takes homeownership off the table for millions of middle-class families”. Meanwhile, the chairman of the National Association of Home Builders (NAHB) stated that “[t]he House Republican tax reform plan abandons middle-class taxpayers in favor of high-income Americans and wealthy corporations”. Given the strong resistance from these two powerful housing groups, there may be changes made to these provisions in the final version of the bill.

    My comment: See above, home ownership off the table for millions of middle class families? What a fucking joke. You don't get a tax break on over $500k home so you can't buy a home? What a crock of bullshit.
    Obviously, I am not the only one calling bullshit, see the next paragraph below:

    According to CoreLogic, the median home price in the US is around $224K while the average property tax paid by homeowners in the country is around $3,300. This suggests that only a minority of homeowners are likely to be affected by the proposed mortgage interest and property tax deduction caps. Indeed, according to preliminary analysis by the NAHB, only about 7mn homes will be affected by the $500K mortgage interest deduction, and since these homeowners will receive the grandfathering benefit, they will not experience any immediate increase in taxes as a result of the mortgage interest deduction cap.

    Meanwhile, approximately 3.7mn homeowners pay more than $10K in property taxes according to the NAHB. These homeowners will experience an immediate increase in taxes from the property tax deduction cap; however, to put this number in perspective, the US Census estimates that there are approximately 76mn owner-occupied homes in the country, indicating that fewer than 5% of households may experience a rise in taxes as a result of the property tax cap.

    My comment: See above, more than $10K in property taxes? Perhaps you need to investigate WHY you are paying so much? People say voting does not count, well, if I was paying that kind of money I would be organizing a tax payer revolt right now!
    Now, who benefits the most from this situation? Well, look at who will be hurt financially the most if this goes through. Follow the money!

    Who is most impacted?

    As expected, the homeowners who will be most negatively affected by the proposed caps primarily reside along the coasts, particularly in California. Using estimated median home prices provided by the NAR, Barclays found that of the 20 counties in the country with the highest median home prices, eight were located in California (Figure 3). Perhaps not surprisingly, a majority of voters in all 20 counties voted for Clinton in last year’s presidential election. In fact, Clinton won the vote in the top 45 counties in the country with the highest median home prices. Suddenly the method behind Trump's madness becomes readily apparent...

    [​IMG]

    Anybody think the above chart is about "middle class home owners"? Of course not.

    Where are all the Bernie Sanders Democrats on this? They should be cheering, this is SOAKING THE RICH!
     
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  19. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  20. platinumdude

    platinumdude Gold Chaser Platinum Bling

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    I can't read the entire article unless I subscribe.
     
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  21. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Would have copied and pasted but I don't want any copyright issues / problems.
     
  22. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Republicans push ahead with U.S. tax bill as Democrats sharpen attacks

    By Amanda Becker
    Reuters
    November 6, 2017

    By Amanda Becker

    WASHINGTON (Reuters) - Republican lawmakers on Monday began revising their proposed overhaul of the U.S. tax code, as Democrats pointed to the loss of popular deductions as proof the legislation was an assault on the middle class.

    A draft bill unveiled last week by Republicans in the House of Representatives, if enacted, would be the biggest restructuring of the tax system since the 1980s and the first major legislative victory of the Trump presidency.

    Although Republicans generally support the bill's broader themes, including a sharp cut in the corporate income tax, there are rumblings of dissent over other elements, including repeal of the deduction for state and local income tax (SALT) payments.

    New York, California and other high-tax states would be hard hit by the removal of that deduction, a fact seized upon by Democrats to bolster their argument that Trump's plan is a gift to the wealthiest Americans and the corporate sector.

    "There are a lot of people expecting a tax cut who will be big losers under this bill," Representative Bill Pascrell of New Jersey, a Democrat on the House Ways and Means Committee, said as the tax-writing panel convened to consider the bill.

    The White House argues that tax cuts are needed to boost economic growth and create jobs.

    The linchpin of the plan is the reduction of the corporate tax rate to 20 percent from 35 percent and establishment of a 25 percent tax rate for "pass through" businesses, which currently pay income tax rates as high as 39.6 percent.

    An analysis of the plan released on Monday by the nonpartisan Tax Policy Center found that the wealthy would be the biggest beneficiaries, while more than one-quarter of taxpayers would see a tax hike over 10 years.

    The top 1 percent of earners, with annual incomes of more than $730,000, would receive a $37,000 tax cut, representing 22 percent of the total tax cut for individuals in 2018. By 2027, they would get 50 percent of the total benefit, according to the analysis.

    With Democrats united in opposition to the plan, Republican defections from a few traditionally Democratic-leaning states could be enough to torpedo it in the House.

    Republican Representative Kevin Brady, chairman of the House tax-writing panel, pledged that lawmakers would have a chance to propose changes to the bill. "Let me assure you this is the beginning of the tax reform process," he told the committee.

    Brady has already agreed to retain the deduction for property tax payments up to a cap of $10,000 as part of a SALT compromise and has said he would be open to raising it.

    In an interview with CNBC on Monday, Brady said another change would be a "carried interest" provision that lengthened to two years the time assets need to be held in order to be eligible for a lower tax rate.

    Carried interest is a share of an investment fund's profits – typically about 20 percent beyond the return guaranteed to investors – that goes to the general partners of private equity, venture capital and hedge funds.

    Under current law, high-income fund partners pay the long-term capital gains rate of 20 percent on their carried interest income, instead of the 39.6 percent individual tax rate that applies to the ordinary wage income of high earners.

    President Donald Trump promised to close the loophole, which has benefited some of Wall Street's wealthiest financiers.

    EYES ON SENATE

    Securing congressional passage of the tax plan is critically important to Trump, who has yet to get major legislation through Congress since taking office in January, including a healthcare overhaul he promised as a candidate last year.

    Investors are adding to the pressure. The expectation of deep tax cuts has helped fuel a stock market rally during Trump's time as president, with the broad S&P 500 index <.SPX> up about 14 percent.

    The Senate, where Republicans have a 52-48 majority, is developing its own version of the tax legislation, which would have to eventually be reconciled with the House version before it is sent to Trump for signing.

    Several Republican senators have said they would have a problem voting for any tax bill that significantly increased the deficit. The House bill is projected to add $1.5 trillion over 10 years to the $20 trillion national debt.


    Fitch Ratings said on Monday that the House bill could add to the fiscal strain in some states and local jurisdictions by limiting their tax-raising flexibility.

    Republican leaders are pushing for the House to vote on a revised tax bill before the U.S. Thanksgiving holiday on Nov. 23. They have said a draft Senate bill could be ready at the end of this week.

    The Republican tax plan was devised without Democratic input. The last major tax restructuring, Republican former President Ronald Reagan's 1986 overhaul, received significant input and support from Democrats.

    (Reporting by Amanda Becker; Additional reporting by Makini Brice and Ginger Gibson; Writing by Paul Simao; Editing by Andrea Ricci and Mary Milliken)

    https://ca.news.yahoo.com/house-beg...x-bill-quell-dissent-110242029--business.html
     
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  23. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  24. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    What a #fakenews line, above. Reagan's 1986 overhaul could not have passed Congress without Democrat support, they CONTROLLED the House of Representatives. The Republicans never controlled both houses in the 8 years.

    For the first six years of the Reagan presidency (1981-87) The Republicans controlled the Senate, and the Democrats the House of Representatives In 1986, the Democrats recaptured the Senate (while retaining the House) and thereafter remained in control of both chamber until losing both in 1994.
     
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  25. southfork

    southfork Mother Lode Found Mother Lode

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    Bill wont pass, dems wont vote for it simply for obstruction, and the dems in pubs clothing, mccain etal wont vote for it
     
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  26. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    GOP Tax Plan Increases the Most Insidious Tax


    -- Published: Tuesday, 7 November 2017

    By Ron Paul

    Last Thursday, congressional Republicans unveiled their tax reform legislation. On the same day, President Trump nominated current Federal Reserve Board Governor Jerome Powell to succeed Janet Yellen as Federal Reserve chair. While the tax plan dominated the headlines, the Powell appointment will have much greater long-term impact. Federal Reserve policies affect every aspect of the economy, including whether the Republican tax plan will produce long-term economic growth.

    President Obama made history by appointing the first female Fed chair. President Trump is also making history: If confirmed, Powell would be the first former investment banker to serve as chairman of the Federal Reserve. Powell’s background suggests he will continue Janet Yellen’s Wall Street-friendly low interest rates and easy money policies.

    Powell is an outspoken opponent of the Audit the Fed legislation. In 2015, Powell delivered an address at Catholic University devoted to attacking Audit the Fed. Like most Fed apologists, Powell claims the audit would compromise the Fed’s independence and allow Congress to control monetary policy. However, like all who make this claim, Powell cannot point to anything in the text of the audit bill giving Congress any power over the Federal Reserve. Powell’s concerns about protecting the Fed’s independence are misplaced, as the Fed has never been free of political influence. The Fed has a long history of bowing to presidential pressure to tailor monetary policy to help advance the president’s political and policy agenda.

    The Republican tax cut plan has some positive elements, such as increasing the standard deduction, creating a new family tax credit, eliminating the death tax, reducing the corporate tax rate, and lowering taxes on small businesses. It also has some flaws, such as the “millionaire surcharge” imposed on upper-income taxpayers. This provision reflects a belief that upper-income taxpayers only “deserve” a tax break if reducing their taxes serves the interest of government by increasing economic growth.

    The worst part of the tax plan is that it adopts the chained consumer price index (chained CPI). Chained CPI is a way of measuring CPI that understates inflation’s effects on our standard of living. It does this by assuming inflation has not reduced Americans’ standard of living if, for example, people can buy hamburgers when they can no longer afford steak. This so-called full substitution ignores the fact that if individuals viewed hamburgers as a full substitute for steak they would have bought hamburgers before Fed-created inflation made steak unaffordable.

    Chained CPI increases the inflation tax. The inflation tax may be the worst of all taxes because it is hidden and regressive. The inflation tax is not even a tax on real wages. Instead it is a tax on the illusionary gains in income caused by inflation. The use of chained CPI to adjust tax brackets pushes individuals into higher tax brackets over time.

    Politicians love the inflation tax because it allows them to increase taxes without having to vote for higher rates. Instead, the Fed does the dirty work. Since their creation in 1913, the Federal Reserve and the income tax have both enabled the growth of the welfare-warfare state and the erosion of our freedom and economic well-being. The key to restoring our liberty and prosperity, as well as avoiding a major economic crisis, is reversing the great mistakes of 1913 by repealing the 16th Amendment and auditing and ending the Federal Reserve.

    http://ronpaulinstitute.org/

    http://news.goldseek.com/GoldSeek/1510064938.php
     
  27. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Senate Republican tax plan may eliminate property tax deductions and delay corporate cut

    Lisa Mascaro and Jim Puzzanghera
    November 7, 2017

    Senate Republicans are revisiting key provisions of the GOP House proposal, including possibly eliminating property tax deductions as well as state income tax deductions, increasing the size of child-care credits, offering more help to small businesses and having corporate tax cuts phase in or expire, according to those familiar with the negotiations.

    The final outline of the Senate plan, scheduled to be released Thursday, remained a work in progress, officials cautioned.

    “Everything is on the table,” said one Republican official Tuesday evening, who did not want to be identified discussing the talks.

    House and Senate Republicans agreed on an early framework for the tax overhaul — lowering corporate rates to 20% and consolidating individual brackets.

    But as House Republicans push ahead with a vote next week on their bill, Senate Republicans are constrained by Senate rules that require their package not increase the federal deficit by more than $1.5 trillion over a decade.

    Core to the Senate’s dilemma is how to make the corporate tax rates immediate and permanent — as President Trump wants — which has left them searching for revenue streams so they don’t add to the deficit.

    They are considering various options: Fully repealing state and local tax deductions that are important to California and other high-tax states, including property taxes; adjusting individual tax brackets so higher-income households that earn less than $1 million fall in the top 39.6% rate; retaining some type of estate tax; or repealing parts of Obamacare.

    They are also considering simply allowing the corporate rate to expire at the end of the decade, sources said.

    Ivanka Trump, wants the credit increased to $2,000. The House bill, which would boost the credit from $1,000 to $1,600, “falls short,” he said.

    Senators are also hearing from lobbyists who want to reverse certain provisions in the House bill, such as restoring an adoption tax credit supported by evangelical Christians.

    “This is just like Republicans not to think this through and put it on the backs of orphaned kids,” said Jim Daly, president of Focus on the Family. “Can we just have a little bit of heart?”

    Representatives for the Koch brothers are planning to target a complicated excise tax in the House bill that affects foreign transactions of multinational companies.

    But such changes will increase costs substantially, forcing senators to search for new ways to raise revenue, such as delaying the corporate tax cut, which takes place immediately under the House version.

    Senators are also likely to give up hopes of a full repeal of the estate tax, paid mostly by the wealthy. The House plan doubles the exemption to $22 million for couples and eventually repeals it fully after six years.

    Senators may also propose a full repeal of state and local income taxes, including property taxes, according to those close to the talks. That idea would hit high-cost states like California hard and pose political challenges for many GOP House members from high-tax states.

    The House bill caps property tax deductions at $10,000, but eliminates deductions for state and local income or sales taxes. That compromise arose after Republican lawmakers from New York and New Jersey threatened to withhold their support for the GOP plan.

    Texas Sen. Ted Cruz came out against the House plan to restrict state and local tax deductions, calling it unfair.

    “There are some taxpayers who are losing exemptions — particularly in some high-tax states like New York or California — that could conceivably be paying higher taxes,” Cruz said. “I think that is a mistake. I think tax reform needs to cut taxes for everybody.”

    But his solution may only complicate the tax bill’s path to passage. Cruz on Tuesday threw his support behind an idea already endorsed by Trump and others to pay for the tax cuts by repealing parts of the Affordable Care Act, particularly the mandate that all Americans have health insurance.

    Doing away with the mandate would cut federal spending on subsidies that help lower-income Americans buy insurance under the law.

    Tacking an Obamacare repeal onto the tax overhaul has been panned by House Speaker Paul D. Ryan and Senate Majority Leader Mitch McConnell. They worry it would complicate passage and risk derailing a year-end legislative accomplishment.

    But even with Trump’s backing, repealing parts of Obamacare is unlikely to find much support in the Senate, especially from those Republicans, including Sen. Lisa Murkowski (R-Alaska), who voted earlier this year against GOP proposals to scrap the law.

    “You’ve already got a lot of weighty and considerable issues on the tax side, so when you mix healthcare in, you may unnecessarily complicate it,” she said.

    Meanwhile, lawmakers on the House Ways and Means Committee continued debating their bill Tuesday.

    It aims to simplify the tax code by closing many common deductions, replacing them with a standard deduction of $12,000 for individuals, or $24,000 for couples. It would also limit mortgage loan deductions to $500,000, and end mortgage deductions for second homes.


    The House bill also eliminates the deduction for personal losses from wildfires, earthquakes and other natural disasters, but keeps the break for victims of the recent severe hurricanes, another blow to California, where fires last month destroyed nearly 8,800 structures and killed 43 people.

    Outside analysts warn against GOP claims that tax cuts will spur economic growth, covering the $1.5 trillion in additional deficit spending.

    On Tuesday, Fitch Ratings said the proposal would likely deliver “a modest and temporary spur to growth,” but result in a federal deficit that hits 4% of GDP by next year, up from 3.5% in fiscal 2017.

    “Tax cuts may lead to a short-lived boost to output, but Fitch believes that they will not pay for themselves or lead to a permanently higher growth rate,” the ratings agency said.

    Similarly, the nonpartisan Tax Foundation found that while the plan would generate nearly 1 million new jobs, the economic growth would not be sufficient to cover the $1.5 trillion cost of lost revenue.

    In the Senate, Republicans including Sen. Bob Corker (R-Tenn.) and Sen. James Lankford (R-Okla.), among others, have raised concerns about relying on deficit spending to pay for tax breaks.

    http://www.latimes.com/politics/la-na-pol-gop-tax-plan-20171107-story.html
     
  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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    Republicans in the Senate release ANOTHER tax reform plan that is expected to COMPLETELY get rid of the deduction for state and local taxes
    • The Senate Finance Committee is releasing its own tax plan Thursday
    • Deduction for state and local income and sales tax deductions would go away
    • The House sets a $10,000 limit for property tax deductions
    • Child tax credit greater than House version
    • Property taxes also would lose deductibility
    • Schumer to House GOP: 'This bill could be your political doom'
    • The House is expected to vote on its tax bill next week
    • House bill got a CBO budget score of $1.7 trillion
    • Senate bill would aim to raise the deficit by $1.5 trillion
    • Delay in corporate rate cut, though it would get slashed to 20 per cent


    Read more: http://www.dailymail.co.uk/news/article-5066521/Republicans-Senate-release-tax-reform-plan.html#ixzz4xxQDvioS
    Follow us: @MailOnline on Twitter | DailyMail on Facebook
     
  30. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  31. andial

    andial Sir Midas Member Site Supporter ++

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    Delaying the corporate tax cut for one year is a loser hope Trump doesn't fall for it. Republicans are running scared of the minority democrat party for some reason very embarrassing. Similar to watching a herd of wildabeasts running away from a small dog.
     
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  32. Joe King

    Joe King Gold Member Gold Chaser

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    Lowering the tax rates reduces the cronies in both parties from using the tax code to sell favors.

     
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  33. Weatherman

    Weatherman In GIM since 2006 Gold Chaser Site Supporter

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  34. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Senate Plan Could Increase Taxes on Some Middle-Class Workers
    By JIM TANKERSLEY and BEN CASSELMANNOV. 10, 2017


    WASHINGTON — Mitch McConnell, the Senate majority leader, acknowledged on Friday that the Republican tax plan might result in a tax hike for some working Americans, saying he “misspoke” days earlier when he said that “nobody in the middle class is going to get a tax increase” under the Senate bill.

    “I misspoke on that,” Mr. McConnell, a Kentucky Republican, said in an interview on Friday with The New York Times. “You can’t guarantee that absolutely no one sees a tax increase, but what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments.”

    The Senate bill unveiled on Thursday would raise taxes on millions of middle-class families, according to a preliminary New York Times analysis. The plan would also disproportionately benefit high earners and corporations. Still, middle-class earners would fare better under the Senate proposal than its counterpart in the House, the analysis found.

    The Senate Finance Committee bill would, on average, cut taxes for people at every income level. But, as Mr. McConnell alluded to in his revised remarks, those benefits would vary widely within income brackets, depending on the specific circumstances of individuals and households, and many would pay more than under existing rules.

    Republican lawmakers have been in a dash to devise — and pass — a tax overhaul that would mark their most significant achievement since taking control of Congress. President Trump and Republican leaders have outlined two main objectives for the rewrite: cutting taxes for American businesses and for the middle class. The legislation reduces tax rates on individuals and businesses, while eliminating some tax breaks to make up for lost revenues. It is meant to accelerate economic growth and increase wages for workers.

    Both the House and Senate bills would cut the corporate tax rate to 20 percent from 35 percent and provide business tax benefits, such as the ability to immediately expense purchases of equipment.

    The Times analysis, using the open-source software TaxBrain, found that roughly one-quarter of families in the middle class would see their taxes increase in 2018, by about $1,000 on average. By 2026, the share seeing an increase would rise slightly, to about one-third, and the average increase would rise to about $1,600. For the majority of middle-class families that receive a tax cut, the average savings would be about $1,300 in 2018 and $1,700 in 2026.

    The Times analysis defines the middle class broadly as those earning between two-thirds and twice the median household income, or about $50,000 to $160,000 per year for a family of three. To focus on families, the analysis excluded individual filers and households headed by people 65 or older and is adjusted for the size of each household.

    Under the House bill, The Times has found, about half of middle-class families would pay more in taxes in 2026.

    The analysis did not seek to calculate how workers might benefit from a steep cut in the corporate tax rate, which both the Senate and House bills would reduce to 20 percent from a top rate of 35 percent today, or project how the bills might increase economic growth and, with it, Americans’ wages.

    On Friday, the independent Tax Foundation released an analysis of the plan’s growth effects. It projected that the Senate bill would increase gross domestic product by 3.7 percent over the next decade and raise wages by 2.9 percent across the economy.

    For taxpayers earning more than $1 million a year, the Senate bill offers a more limited upside and downside than the House bill.

    The Senate bill is less likely than the House bill to yield tax increases for high-income Americans, in part because it cuts the top marginal personal tax rate, while the House bill creates a so-called “bubble rate” that would actually raise taxes on many high-salaried workers.

    The Senate measure would also produce a smaller average tax windfall for high earners than the House version, in part by offering less generous benefits for owners of businesses known as pass-throughs, which are not organized as corporations.

    Under the Senate plan, “Americans are especially likely to face a tax increase if they have a smaller family, have mostly wage income instead of investment income, or claim some of the many deductions that the bill repeals, like those for state and local taxes and employee business expenses,” said Lily Batchelder, a professor and tax specialist at New York University Law School, who worked on economic policy in the Obama administration. “They are increasing taxes on many in the middle class, while concentrating their tax cuts on the wealthy.”

    The Senate bill appears much better for the very wealthy than it is for the somewhat wealthy. About half of families earning between two and three times the median income — or about $160,000 to $240,000 for a family of three — would pay more in 2018 than under existing law. But among the richest families, those earning more than about $500,000 for a family of three, nearly 90 percent would get a tax cut.

    The findings come with an important caveat: The Senate bill, as written, appears unable to muster the 60 votes needed to avoid a Democratic filibuster, meaning Republicans will need to amend it to comply with the budget reconciliation rules and allow permit passage by a simple majority. Those changes could likely include putting expiration dates on some of the bill’s major provisions, which could make the final version of the bill look less favorable to the middle class, particularly in later years.

    The Times’s figures are based on an analysis of Census Bureau data using a tax model from the Open Source Policy Center, a Washington research organization affiliated with the right-leaning American Enterprise Institute. Because the analysis is based on publicly available data, not actual tax records, it may not capture all the intricacies of Americans’ household finances.

    The Senate bill differs sharply from the House version in its approach to cutting taxes on businesses. But when it comes to taxes on individuals and families, the bills are more similar than different. Both would double the standard deduction while eliminating a raft of deductions and credits. Both would make the child tax credit more generous. Both would restructure federal income tax brackets to impose lower marginal tax rates at most income levels, although the Senate approach, unlike the House version, doesn’t eliminate two brackets entirely.

    The Senate bill includes features that would make its plan more favorable to the middle class. It preserves some popular tax deductions and credits that the House bill initially would have eliminated, and it makes the child tax credit somewhat more generous and widely available. On the other hand, the Senate bill, unlike the House version, would eliminate the deduction for property taxes, which could lead to higher federal taxes for homeowners in areas with high property tax rates or expensive housing markets.

    Aparna Mathur, an economist at the American Enterprise Institute, said senators could improve the bill with further changes, such as expanding the earned-income tax credit and extending the benefits of the child tax credit to more low-income taxpayers. “We clearly need to do more to help the lowest-income families,” she said. “At the same time, we can engage in more base broadening for the highest-income households, perhaps by eliminating and not just capping the mortgage-interest deduction.”

    The Times analysis found that roughly one-fifth of the Senate bill’s cuts in 2018 would go to families and individuals earning $1 million or more, and close to half would go to people earning at least $200,000. Between 10 million and 15 million taxpayers earning less than $100,000 a year would pay more than under existing law.

    Families earning more than $1 million a year would see their after-tax income rise by about 1.7 percent in 2018 compared with what they would make under current law, nearly triple the gains enjoyed by those earning less than $200,000.

    Over all, the Senate bill would cut individual income taxes by about $30 billion in 2018, and by $900 billion over the next decade, according to Congress’s nonpartisan Joint Committee on Taxation. And most people in all income groups would see a tax cut, although the cuts would be modest for most lower earners.

    Jim Tankersley reported from Washington, and Ben Casselman from New York. Sheryl Gay Stolberg contributed reporting.

    https://www.nytimes.com/2017/11/10/us/politics/senate-tax-bill.html
     
  35. edsl48

    edsl48 Silver Member Silver Miner

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    Why should there be child credits? It is just more nonsense and interestingly these handouts are not called income so while the fsa gets the money it does not impair their ability to get other forms of welfare.
     
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  36. Area51

    Area51 Silver Miner Seeker

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    What an obscene joke - - people earning less than $100k have their taxes increased while people earning more than $500k have their taxes decreased. And the biggest abomination, the corporate tax rate being decreased.
     
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  37. Area51

    Area51 Silver Miner Seeker

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    I'd fully support a corporate tax cut if there was a corresponding tariff increase - - cut the corporate tax rate by 15% and put a 30% tariff on every single thing that comes into the country.
     
  38. Joe King

    Joe King Gold Member Gold Chaser

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    So then the new 30% tax would be paid by American consumers when they buy those imported goods.
    Ie: how the tax is collected would change, but the People of the nation would still be the ones paying it.

    Why is it so difficult for you to understand that all costs get passed to the consumer in one form or another? Taxes are but one of those costs.
     
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  39. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    It's basic economics

    If a domestics company's competition gets a 30% tarrif what do you think they'll do?

    Hint, It'll probably involve a price increase.
     
  40. Area51

    Area51 Silver Miner Seeker

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    Price elasticity - - that's "basic economics" too, my friend.

    The only way to bring jobs back from Mexico/China/Bangladesh is with tariffs to discourage imports and protect the domestic industries.

    Free trade is one of the worst things that's ever happened to the America economy.
     
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