Biggest Reform EVER passed thread

NANCY PELOSI!

palmab03 said:

Ok, let's put it simply. Say I'm married with $400k in wages (One can dream). Using $55k in 401k deferrals and $24k in standard deduction, you get under the $315k cap for professional service providers. What entity structure and W2 wages would I set to maximize the deduction and minimize FICA? Am a sole proprietor, but could easily find a partner in the same line of work.

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In that case I don't think it matters you would not have any W-2 wages under either of those setups and either one could maximize your deduction. All of your income from a partnership of schedule C would be self-employment income. The caveat is that you couldn't structure any of your payments out of a partnership as a guaranteed payment since those would be considered wages.

yeah...let's pay for these tax cuts by gutting the SS. Rubes won't care.

who could have guessed that this will happen? btw, when does the trickle down begin? we already had the largest corporate buyback in history, so the trickle should come at any time...right rubes?

Just wait! It's coming!

ChrisL68 said:

In that case I don't think it matters you would not have any W-2 wages under either of those setups and either one could maximize your deduction. All of your income from a partnership of schedule C would be self-employment income. The caveat is that you couldn't structure any of your payments out of a partnership as a guaranteed payment since those would be considered wages.

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You're correct, and this was very helpful. I'd only worked for LLC's or SCorp's with 2 50/50 owners. Completely didn't realize that self employment is different. Yeah, I think I'm gonna be a consultant, it's just free money thanks to the new tax law if you have a relationship with your company that makes that possible.

Could put this in the midterm thread, but I’ll put it here.

The Trump Tax Scam, Phase II: Deficits are up? Cut Medicare and Social Security!

Best read on site for embedded links.

When the Trump tax cut was on the verge of being enacted, I called it “the biggest tax scam in history,” and made a prediction: deficits would soar, and when they did, Republicans would once again pretend to care about debt and demand cuts in Medicare, Medicaid and Social Security.

Sure enough, the deficit is soaring. And this week Mitch McConnell, the Senate majority leader, after declaring the surge in red ink “very disturbing,” called for, you guessed it, cuts in “Medicare, Social Security and Medicaid.” He also suggested that Republicans might repeal the Affordable Care Act — taking away health care from tens of millions — if they do well in the midterm elections.

Any political analyst who didn’t see this coming should find a different profession. After all, “starve the beast” — cut taxes on the rich, then use the resulting deficits as an excuse to hack away at the safety net — has been G.O.P. strategy for decades.

Oh, and anyone asking why Republicans believed claims that the tax cut would pay for itself is being naïve. Whatever they may have said, they never actually believed that the tax cut would be deficit-neutral; they pushed for a tax cut because it was what wealthy donors wanted, and because their posturing as deficit hawks was always fraudulent. They didn’t really buy into economic nonsense; it would be more accurate to say that economic nonsense bought them.

That said, even I have been surprised by a couple of things about the G.O.P.’s budget bait-and-switch. One is the timing: I would have expected McConnell to hold his tongue until after the midterms. The other is the lying: I knew Donald Trump and his allies would be dishonest, but I didn’t expect the lies to be as baldfaced as they are.

What are they lying about? For starters, about the causes of a sharply higher deficit, which they claim is the result of higher spending, not lost revenue. Mick Mulvaney, Trump’s budget director, even tried to claim that the deficit is up because of the costs of hurricane relief.

The flimsy justification for such claims is that in dollar terms, federal revenue over the past year is slightly up from the previous year, while spending is about 3 percent higher.

But that’s a junk argument, and everyone knows it. Both revenue and spending normally grow every year thanks to inflation, population growth and other factors. Revenue during Barack Obama’s second term grew more than 7 percent a year. The sources of the deficit surge are measured by how much we’ve deviated from that normal growth, and the answer is that it’s all about the tax cut.

Dishonesty about the sources of the deficit is, however, more or less a standard Republican tactic. What’s new is the double talk that pervades G.O.P. positioning on the budget and, to be fair, just about every major policy issue.

What do I mean by double talk? Well, consider the fact that even as McConnell blames “entitlements” (that is, Medicare and Social Security) for deficits, and declares (falsely) that Medicare in particular is “unsustainable,” Paul Ryan’s super PAC has been running ads accusing Democrats of wanting to cut Medicare. The cynicism is breathtaking.

But then, it’s no more cynical than the behavior of Republicans like Dean Heller, Josh Hawley and even Ted Cruz who voted to repeal the Affordable Care Act, which protects Americans with pre-existing medical conditions, or supported a lawsuit trying to strip that protection out of the act, and are now running on the claim that they want to … protect people with pre-existing conditions.

The point is that we’re now in a political campaign where one side’s claimed position on every major policy issue is the opposite of its true position. Republicans have concluded that they can’t win an argument on the issues, but rather than changing their policies, they’re squirting out clouds of ink and hoping voters won’t figure out where they really stand.

Why do they think they can get away with this? The main answer is obviously contempt for their own supporters, many of whom get their news from Fox and other propaganda outlets that slavishly follow the party line. And even in appeals to those supporters who rely on other sources, Republicans believe that they can neutralize the deep unpopularity of their actual policies by misrepresenting their positions, and win by playing to racism and fear.

But let’s be clear: G.O.P. cynicism also involves a lot of contempt for the mainstream news media. Historically, media organizations have been remarkably unwilling to call out lies; the urge to play it safe with he-said-she-said reporting has very much worked to Republicans’ advantage, given the reality that the modern G.O.P. lies a lot more than Democrats do. Even the most blatant falsehood tends to be reported with headlines about how “Democrats say” it’s false, not that it’s actually false.

Anyway, at this point Republicans are proclaiming that war is peace, freedom is slavery, ignorance is strength and the party that keeps trying to kill Medicare is actually the program’s greatest defender.

Can a campaign this dishonest actually win? We’ll find out in less than three weeks.

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Krugman: What drives such investment is, instead, perceptions about market demand. And appreciating that reality doesn’t just undermine the case for the Trump tax cut. It undermines Republican economic doctrine as a whole.

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WFFaithful said:

http://www.post-gazette.com/opinion...y-did-the-tax-cut-fizzle/stories/201811240018

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Good piece.

WFFaithful said:

http://www.post-gazette.com/opinion...y-did-the-tax-cut-fizzle/stories/201811240018

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Paul Krugman: Why did the tax cut fizzle?
The GOP’s only legislative achievement has disappointed

PAUL KRUGMAN
NOV 24, 2018 6:00 AM
The midterm elections’ blue wave means that President Donald Trump will go into the 2020 election with only one major legislative achievement: a big tax cut for corporations and the wealthy. Still, that tax cut was supposed to accomplish big things. Republicans thought it would give them a big electoral boost, and they predicted dramatic economic gains. What they got instead, however, was a big fizzle.

The political payoff, of course, never arrived. And the economic results have been disappointing. True, we’ve had two quarters of fairly fast economic growth, but such growth spurts are fairly common — there was a substantially bigger spurt in 2014, and hardly anyone noticed. And this growth was driven largely by consumer spending and, surprise, government spending, which wasn’t what the tax cutters promised.

Meanwhile, there’s no sign of the vast investment boom the law’s backers promised. Corporations have used the tax cut’s proceeds largely to buy back their own stock rather than to add jobs and expand capacity.

But why have the tax cut’s impacts been so minimal? Leave aside the glitch-filled changes in individual taxes, which will keep accountants busy for years; the core of the bill was a huge cut in corporate taxes. Why hasn’t this done more to increase investment?


Truth and virtue in TrumpWorld
Paul Krugman
Truth and virtue in TrumpWorld
The answer, I’d argue, is that business decisions are a lot less sensitive to financial incentives — including tax rates — than conservatives claim. And appreciating that reality doesn’t just undermine the case for the Trump tax cut. It undermines Republican economic doctrine as a whole.

About business decisions: It’s a dirty little secret of monetary analysis that changes in interest rates affect the economy mainly through their effect on the housing market and the international value of the dollar (which in turn affects the competitiveness of U.S. goods on world markets). Any direct effect on business investment is so small that it’s hard even to see it in the data. What drives such investment is, instead, perceptions about market demand.

Why is this the case? One main reason is that business investments have relatively short working lives. If you’re considering whether to take out a mortgage to buy a house that will stand for many decades, the interest rate matters a lot. But if you’re thinking about taking out a loan to buy, say, a work computer that will either break down or become obsolescent in a few years, the interest rate on the loan will be a minor consideration in deciding whether to make the purchase.

And the same logic applies to tax rates: There aren’t many potential business investments that will be worth doing with a 21 percent profits tax, the current rate, but weren’t worth doing at 35 percent, the rate before the Trump tax cut.

Also, a substantial fraction of corporate profits really represents rewards to monopoly power, not returns on investment — and cutting taxes on monopoly profits is a pure giveaway, offering no reason to invest or hire.

Now, proponents of the tax cut, including Mr. Trump’s own economists, made a big deal about how we now have a global capital market, in which money flows to wherever it gets the highest after-tax return. And they pointed to countries with low corporate taxes, like Ireland, which appear to attract lots of foreign investment.

The key word here is, however, “appear.” Corporations do have a strong incentive to cook their books — I’m sorry, manage their internal pricing — in such a way that reported profits pop up in low-tax jurisdictions, and this in turn leads on paper to large overseas investments.

But there’s much less to these investments than meets the eye. For example, the vast sums corporations have supposedly invested in Ireland have yielded remarkably few jobs and remarkably little income for the Irish themselves — because most of that huge investment in Ireland is nothing more than an accounting fiction.

Now you know why the money U.S. companies reported moving home after taxes were cut hasn’t shown up in jobs, wages and investment: Nothing really moved. Overseas subsidiaries transferred some assets back to their parent companies, but this was just an accounting maneuver, with almost no impact on anything real.

So the basic result of lower taxes on corporations is that corporations pay less in taxes — full stop. Which brings me to the problem with conservative economic doctrine.

That doctrine is all about the supposed need to give the already privileged incentives to do nice things for the rest of us. We must, the right says, cut taxes on the wealthy to induce them to work hard, and cut taxes on corporations to induce them to invest in America.

But this doctrine keeps failing in practice. President George W. Bush’s tax cuts didn’t produce a boom; President Barack Obama’s tax hike didn’t cause a depression. Tax cuts in Kansas didn’t jump-start the state’s economy; tax hikes in California didn’t slow growth.

And with the Trump tax cut, the doctrine has failed again. Unfortunately, it’s difficult to get politicians to understand something when their campaign contributions depend on their not understanding it.

Paul Krugman is a columnist for The New York Times.

https://thehill.com/opinion/finance...er-final-verdict-on-failed-tax-cut-experiment


Analysis by Menzie Chinn, a professor of public affairs and economics at the University of Wisconsin-Madison, found that after the enactment of the tax cuts, economic growth in Kansas fell well below its pre-Brownback trend and, by the spring of 2017, the rate of job growth in Kansas was not only lower than the rates in most of its neighboring states but less than half of the national average.

Brownback’s experiment was such a failure that his party turned against him. In 2017, the Republican-dominated legislature, overriding the governor’s veto, rolled back the tax cuts.

Everyone needs to take time out of their busy schedules to read (or reread) the Krugman piece pasted above.

No other economist has been as out in front of this or more prescient than Professor Krugman.

yes, everyone should be quite clear at how the sham tax cut fucks the average american

are wake forest students average americans?

palmab03 said:

are wake forest students average americans?

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Good point. All we really need to worry about is our selves.

Colonel Angus said:

Everyone needs to take time out of their busy schedules to read (or reread) the Krugman piece pasted above.

No other economist has been as out in front of this or more prescient than Professor Krugman.

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Yes after the saccharine overstimulation of the economy that was already growing, the bill is starting to become due. God you are a moron