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Biggest Reform EVER passed thread

NPR interviewed a Georgia congressman today. first question was about how this is going to explode the deficit. His answer was that we're going to grow our way out of it because we've got to "get out of this 1.5% growth" and back to 5% GDP growth. Last time that happened was 1999. https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=US He also felt like it was critical to maintain Republican majorities so they can "hold the line on spending" and "do entitlement reform".
 
 
If they just got rid of the estate tax thing, I wonder how those charts would look. I imagine they'd look fairly good.
 
If they just got rid of the estate tax thing, I wonder how those charts would look. I imagine they'd look fairly good.

In the sense that there would be less money going to the very rich, sure. But wouldn't change many in the lower/middle class actually getting a tax hike. 38 million filers making between $20k and $40k would get a tax increase.
 
In the sense that there would be less money going to the very rich, sure. But wouldn't change many in the lower/middle class actually getting a tax hike. 38 million filers making between $20k and $40k would get a tax increase.

I imagine these are all people with lots of kids who not only pay no taxes, but get refund checks every year. My sister is one of these. I'm okay with this. The federal government shouldn't cut her a $5k/yr check to enable her brother to blow a couple hundy on sushi every month.

Add a public education class on managing your finances in middle school and high school would be a good start.
 
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The Clash of Social Visions—David Brooks

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...This is not a column about the workability or advisability of this or that plan. This is a column about the sort of social vision that serves as a predicate for that plan.

The Republicans have a social vision. The Republican vision is that the corporate sector is more important to a healthy America than the professional and nonprofit sector. The Republican vision is that companies that thrive in the red states, like manufacturing and agriculture, are more important for the country than the industries that thrive in blue states, like finance, media, the academy and the movies.

What, by contrast, is the Democratic vision? Are Democrats going to spend the next few months defending the mortgage interest deduction and other tax breaks for their own rich?

It could be that economic policy is becoming tribal just like everything else in our politics. In that world, parties use their time in power to nakedly shift the tax code for the benefit of their own donors.

It would be nice if our tax code wasn’t red or blue but distinguished between social goods and social bads. I’d love to see a tax code that rewarded investment and discouraged consumption. That would mean cutting taxes on earnings but raising revenue through a progressive consumption tax. I’d love to see a tax code that punished pollution but encouraged social cohesion. That would mean taxing carbon but increasing tax credits for working people and families with children.

You may or may not like my vision, but it’s more elevated than the visions that are now emerging, which are a dressed-up version of the spoils system: more money for my political friends and less for my political foes.
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Competing visions?

Dems in power: let’s do something good together.
Dems out of power: let’s do something good together.
Pubs out of power: nothing good can be done together (government is the problem not a solution)—WHAT ABOUT THE DEBT?
Pubs in power: nothing good can be done together—tear down and apart our institutions and programs to prove they don’t work—what debt?
 
Lets talk estate taxes:

The bill calls for a repeal of the estate tax after 2023, but allows for the permanent step up of basis in those assets. This is a massive give away to super wealthy estates and the road to oligarchy

So if I am Bill Gates, and I start Microsoft and have basis in Microsoft stock of million and a FMV of billions, I can pass along that stock to my heirs and those billions of gain will never be taxed.
 
Permanent is a questionable word. If the estate tax gets repealed then it is unlikely that it comes back, but I could see in a few years an income tax capture taking basis into account coming back in when the next commielib is in power. However, that income capture is likely across the board and not just over an estate value threshold; which I think is the right way to do it ... if some have to pay it then all should pay it, and if some don't have to pay it then nobody should have to pay it. The structural classwarfare system that we have now is what is causing many of our problems.
 
That ignores the reality that super huge estates are mostly unrealized capital gains while more modest estates are generally a much smaller % unrealized capital gains.

We estimate that the average unrealized capital gains in estates monotonically increases with the size of the estate, ranging from 13% for estates under $2 million to 55% for estates over $100 million from the federal reserve. https://www.federalreserve.gov/pubs/feds/2013/201328/201328pap.pdf

Lower level estates are comprised of a much larger % principal residences which would qualify for an exemption if sold.

And the estate exemption amount is available to all estates.

So having an exemption amount is an equitable tax policy decision. Now you can argue over what amount that should be. But the idea of eliminating the estate tax reduces class warfare in tax policy is laughable.
 
I'm trying my best to stay objective about this tax plan, but I'm very frustrated with both houses right now.
 
It's shaping up like the ACA repeal, where the goal is no longer meaningful reform and is down to pass something, anything no matter how flawed, under a ridiculous timeline just to get something on the scoreboard. So I bet this won't pass.
 
 
It's shaping up like the ACA repeal, where the goal is no longer meaningful reform and is down to pass something, anything no matter how flawed, under a ridiculous timeline just to get something on the scoreboard. So I bet this won't pass.

Agreed. Republicans haven't made it clear what problem they're trying to solve and the parts of the bill that have made it out look like they're nickel and diming the working and middle class.

I heard an interview on Marketplace with a Republican stooge that was essentially "these tax cuts will generate economic growth because tax cuts generate economic growth."

And as avalon posted, the real problem seems to be big donors want to get their ROI, but Republicans as a whole can't specifically acknowledge it.
 
Yeah these little repeals of credits and deductions here and there are pretty easily framed as coming up with cuts to pay for the much larger impacts of estate tax and corporate tax cuts so that the bill can slip under the deficit cap. Shocker that people are actually noticing stuff like that!
 
Has anybody seen Republicans defend the corporate tax cuts and estate tax cuts with respect to the revelations of the Paradise Papers?
 
That ignores the reality that super huge estates are mostly unrealized capital gains while more modest estates are generally a much smaller % unrealized capital gains.

We estimate that the average unrealized capital gains in estates monotonically increases with the size of the estate, ranging from 13% for estates under $2 million to 55% for estates over $100 million from the federal reserve. https://www.federalreserve.gov/pubs/feds/2013/201328/201328pap.pdf

Lower level estates are comprised of a much larger % principal residences which would qualify for an exemption if sold.

And the estate exemption amount is available to all estates.

So having an exemption amount is an equitable tax policy decision. Now you can argue over what amount that should be. But the idea of eliminating the estate tax reduces class warfare in tax policy is laughable.

How is an exemption an equitable policy decision if the entire point is to exempt some people but tax others? If the exemption were based on a percentage (i.e. 60% of everyone's estate is tax-free but 40% is taxable), then yes it would be equitable. But setting the exemption as a dollar amount designed to be above most people's estates is pretty much the opposite of equitable.
 
How is an exemption an equitable policy decision if the entire point is to exempt some people but tax others? If the exemption were based on a percentage (i.e. 60% of everyone's estate is tax-free but 40% is taxable), then yes it would be equitable. But setting the exemption as a dollar amount designed to be above most people's estates is pretty much the opposite of equitable.

Because smaller estates will have a smaller % of unrealized (untaxed) income and a higher percentage of carryover tax basis. Your solution would result in a much lower percentage of income being taxed for huge estates on a universal basis than small estates.
 
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