Biggest Reform EVER passed thread

[PhDeac]

Crumbs are crumbs because they fall from a big loaf of bread, not because of who eats them.

 

[dartsndeacs]

Crumbs are crumbs because they fall from a big loaf of bread, not because of who eats them.

According to the JCT numbers you gave me the other day, half of the loaf goes to households making $100-500k in 2019. Pretty much everyone who posts on these boards. With the other quarter of loaf going below and the other going above.

Goes up to 60% by 2025.

Currently, most of the poorest don't pay any federal taxes and lots actually get checks. How much more should we give them for free? Seems a pretty fair way of allocating it to me. Sounds like a middle-class tax cut, given most of you fall in that range and none of you consider yourself rich.

 

[PhDeac]

Your argument relies on the assumption that we need massive tax cuts and we'll be better off as a result.

 

[dartsndeacs]

Your argument relies on the assumption that we need massive tax cuts and we'll be better off as a result.

My argument relies on the fact that somewhere between 80-90% of the country benefits, so opposing it is pretty dumb. Cause if they get it through, ADP is going to calculate it right away, and most everyone will see the benefit immediately on 1/15/18. Are there a few things that suck, sure, its a republican plan. But it should be getting roughly 50/50 support from the democratic side. The fact that its not, is kinda bullshit. As are most of those biased articles posted in the past couple hours.

 

[tiltdeac]

My argument relies on the fact that somewhere between 80-90% of the country benefits, so opposing it is pretty dumb. Cause if they get it through, ADP is going to calculate it right away, and most everyone will see the benefit immediately on 1/15/18. Are there a few things that suck, sure, its a republican plan. But it should be getting roughly 50/50 support from the democratic side. The fact that its not, is kinda bullshit. As are most of those biased articles posted in the past couple hours.

For your argument to be compelling, you have to ignore any long term effects of the bill (which again, raises taxes on half the country, and most of the middle class, in 10 years as written, while permanently favoring the corporations and the wealthy). You have to not care that lower and middle class Americans are seeing a much smaller benefit than they otherwise could to give cuts to the wealthy. You have to not care about large deficit increases which are baked into the plan whether they let the tax cuts sunset or not. You have to not care about millions of people losing health care and premiums going up ~10% by getting rid of the mandate. You have to not care about the inevitable cuts to services (maybe immediately, but I don't fully understand how PAYGO works) that many in the lower and middle class rely on. And so on.

So yeah, I don't think it's kinda bullshit that it's not getting democratic support. It shouldn't even be getting republican support.

 

[dartsndeacs]

For your argument to be compelling, you have to ignore any long term effects of the bill (which again, raises taxes on half the country, and most of the middle class, in 10 years as written, while permanently favoring the corporations and the wealthy). You have to not care that lower and middle class Americans are seeing a much smaller benefit than they otherwise could to give cuts to the wealthy. You have to not care about large deficit increases which are baked into the plan whether they let the tax cuts sunset or not. You have to not care about millions of people losing health care and premiums going up ~10% by getting rid of the mandate. You have to not care about the inevitable cuts to services (maybe immediately, but I don't fully understand how PAYGO works) that many in the lower and middle class rely on. And so on.

So yeah, I don't think it's kinda bullshit that it's not getting democratic support. It shouldn't even be getting republican support.

It doesn't bother you that every negative headline people posted didn't mention the fact that they were talking about 2027 numbers?

Cause the headline I'd market to folks like me is "you're gonna save $40k through 2026."

One argument sounds more compelling to me, maybe I'm wrong.

 

[tiltdeac]

It doesn't bother you that every negative headline people posted didn't mention the fact that they were talking about 2017 numbers?

To be fair, I'm not reading all the articles that have been posted, and I'm sure some of them have some hyperbolic nonsense. I try to stick to the real analyses/data and stuff actual economists put out, which generally include the whole picture.

 

[dartsndeacs]

To be fair, I'm not reading all the articles that have been posted, and I'm sure some of them have some hyperbolic nonsense. I try to stick to the real analyses/data and stuff actual economists put out, which generally include the whole picture.

47% of women under 44 don't have kids and 65% of people under 35 rent their home. That's a rather large chunk that automatically benefits by a decent amount.

 

[tiltdeac]

It doesn't bother you that every negative headline people posted didn't mention the fact that they were talking about 2027 numbers?

Cause the headline I'd market to folks like me is "you're gonna save $40k through 2026."

One argument sounds more compelling to me, maybe I'm wrong.

Their plan will save you 40K through 2026, but then they want raise your taxes higher than they are now afterwards, because the top 1% is going to save $400k, and the top 0.1% is going to save >1$ million over those same 10 years. And after 10 years, even though odds are you are getting a tax increase, those top 1% almost all get to keep a tax cut.


Still compelling?

 

[dartsndeacs]

Their plan will save you 40K through 2026, but then they want raise your taxes higher than they are now afterwards, because the top 1% is going to save $400k, and the top 0.1% is going to save >1$ million over those same 10 years. And after 10 years, even though odds are you are getting a tax increase, those top 1% almost all get to keep a tax cut.


Still compelling?

Yeah, because the majority of americans will happily trade X dollars now if it costs them some 10 years from now. The average customer with a credit card (About 50 million people) has an outstanding balance of $16k. Most people are probably better off paying that off over the next 10 years, even if the tax rates expire.

And unless I'm wrong they can just revise the code at that point and make it permanent. Congress isn't going to allow those cuts to expire, once you given them, they'll be permanent one way or another. Acting as if they would simply expire is fairly unrealistic, don't you think?

 

[tiltdeac]

Yeah, because the majority of americans will happily trade X dollars now if it costs them some 10 years from now. The average customer with a credit card (About 50 million people) has an outstanding balance of $16k. Most people are probably better off paying that off over the next 10 years, even if the tax rates expire.

And unless I'm wrong they can just revise the code at that point and make it permanent. Congress isn't going to allow those cuts to expire, once you given them, they'll be permanent one way or another. Acting as if they would simply expire is fairly unrealistic, don't you think?

I'm sure some Americans would take that deal. But it's a terrible deal. And the numbers you were quoting are MUCH higher than the average American will get. As for the cuts expiring, if they wanted permanent cut, they could have, and should have, put that in the bill. I think it's silly to assume anything other than what is actually in the text. If they make those tax cuts permanent, they will have to make huge cuts elsewhere. Where do you think those would come from?

OR

They could just do sensible reform now, with bigger, permanent cuts to the lower and middle class without the cuts for the wealthy, while keeping some of the good conservative ideas (lower corporate rate, lower the cap on the mortgage interest deduction like the House bill did, probably phase it out eventually, decrease state and local deductions, etc). Some democrats would still be dumb and vote against it, by I imagine you could get enough on board.

 

[dartsndeacs]

I'm sure some Americans would take that deal. But it's a terrible deal. And the numbers you were quoting are MUCH higher than the average American will get. As for the cuts expiring, if they wanted permanent cut, they could have, and should have, put that in the bill. I think it's silly to assume anything other than what is actually in the text. If they make those tax cuts permanent, they will have to make huge cuts elsewhere. Where do you think those would come from?

OR

They could just do sensible reform now, with bigger, permanent cuts to the lower and middle class without the cuts for the wealthy, while keeping some of the good conservative ideas (lower corporate rate, lower the cap on the mortgage interest deduction like the House bill did, probably phase it out eventually, decrease state and local deductions, etc). Some democrats would still be dumb and vote against it, by I imagine you could get enough on board.

Dems don't have control of either side of congress or the white house. Pubs are in power so you gotta eat one or two bad things. Doesn't mean a democratic congressman should vote NO on something that helps 80-90% of their constituents over the next 10 years, especially not 100% of them.

They can always add back the estate tax once they get control of congress back, its not like rich people are incentivized to die faster.

 

[ConnorEl]

How the Trump Tax Cuts Would Reshape (and/or Break) Our Economy

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The Trump tax cuts are zipping through Congress at the legislative version of light speed. House Republicans unveiled their plan for overhauling America’s tax code on November 2; they passed it two weeks later. The Senate GOP revealed its (actual) tax bill last Tuesday; Mitch McConnell plans to vote it out of the upper chamber the week after Thanksgiving.

The frenetic pace of the GOP’s tax “reform” push has left some of the party’s own members short of breath. “You’re rewriting a tax code for a generation, and you are doing it in ten days,” Republican congressman Peter King said Thursday. “In [1986], it took two years to put together a tax reform bill.”

King’s exasperation is warranted. A couple of weeks might be enough time for legislators, policy analysts, and voters to consider the legislation’s first-order effects: Whose taxes will go up, whose will go down, and how much revenue will be lost in the process. But it’s far too brief an interval for lawmakers (let alone, the public) to comprehend the broader consequences of those changes.


Tax policy is about a lot more than generating revenue. Every tax code rewards certain kinds of economic activity and disincentives others. In the United States, we are especially reliant on tax incentives for shaping our industrial policy and providing social welfare.

The tax bills sprinting through the House and Senate would restructure these incentives, in ways that the public scarcely appreciates, and that even experts need more time to fully understand.

This is what makes the Republican leadership’s haste so outrageous — and, also, unsurprising: When one examines the GOP bills’ likely effects, it becomes clear that extended exposure to sunlight won’t do the Trump tax cuts any favors.

Here’s a rundown of ten consequences those cuts could have for our economy:

1) Less home ownership (and, just maybe, another housing-market-fueled recession)...

2) An even more severe affordable-housing crisis...

3) More American manufacturing workers losing jobs to outsourcing and automation...

4) An even more beleaguered American labor movement...

5) More Americans dying or going bankrupt for want of affordable health care...

6) Fewer non-rich people getting graduate degrees...

7) More obstacles to progressive governance on the state level...

8) Less research into rare medical problems...

9) More rich people sending their kids to private school...

10) Owners of extreme wealth enjoying even greater power over our political system...
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[ONW]

"GOP plan will ultimately raise taxes on 50% of Americans, nonpartisan assessment says"

https://www.cnbc.com/2017/11/20/sen...e-taxes-for-half-of-us-tax-policy-center.html

 

[Deacon923]

Again, without arguing over the minutiae of whether these bills will save X or Y American a few (or a lot of) bucks next year, look at the social vision behind the plans. Big business is going to get full expensing of new equipment, which is a something the business lobby has been wanting since basically the dawn of the income tax. Killing the mandate is going to make health insurance more expensive across the board, so workers will be even more expensive to employ. Estimates are that around 35% or more of the tax benefits will go to foreign investors who own big stakes in US companies, and history shows that the cash stashed abroad will be used to buy back shares and provide dividends, not raise worker pay.

The big "populist" and "nationalist" movement of 2016 is going to produce, as its crowning achievement, a tax plan that heavily favors big businesses and foreign investors who replace blue collar workers with machines. But hey, at least it screws college kids and those damn libruls with their big houses on the coasts. Way to go rubes.

 

[ConnorEl]

Converging on Tax-Reform Nonsense

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Republicans in Congress appear to have reached agreement on several crucial points about tax reform. First, it should add to the budget deficit. Second, it should contain countless gimmicks to disguise its true fiscal impact. And third, it should make an insanely complicated tax code even more so.

As both houses moved closer last week to passing a comprehensive new tax law, Speaker Paul Ryan heralded it as "a generation-defining moment." He may well be right. It could take at least that long for his party to recover from this debacle.

The best hope -- for Republicans and the country -- is that the outcome remains uncertain. The House passed a measure last week and a Senate committee approved a different version hours later. If the full Senate passes a bill, the two will need to be reconciled. As the differences get hammered out, almost anything is possible.

Right now, though, Senate and House Republicans have converged on a reform that cuts the corporate tax rate from 35 percent to 20 percent; increases the standard personal-income deduction while limiting the scope of itemized deductions; readjusts the personal-income tax brackets; abolishes the alternative minimum tax; and much, much more.

It's not that their plans are timid: They would amend almost every aspect of the tax code. It's that they lack any coherent theory of reform.

Taken in isolation, the lower corporate tax is a good idea. The current rate is a lot higher than most other countries', which discourages investment and directs too much of managers' attention to tax planning. But a reform that favors the richest taxpayers (which this would) calls for offsetting changes elsewhere. A higher personal rate for those at the very top, together with closing the loopholes for carried interest and capital gains at death, would have helped to balance the books while maintaining or improving the system's overall fairness.

Instead, loopholes for the rich seem about to get bigger. The rules on carried interest might be tightened, though to no great effect. Income paid to the owners of pass-through corporations, on the other hand, would be taxed at a rate much lower than normal -- a gaping new loophole.

Overall, the emerging plan would add between $1.5 trillion and $2 trillion to the budget deficit over the next 10 years. Fiscal stimulus is the last thing an economy at full employment needs.

Moreover, the plans are riddled with phase-ins, phase-outs and assorted other gimmicks meant to disguise the real fiscal impact. By design, this supposedly historic reform is a shape-shifting mirage. To comply with the principles of fiscal conservatism Republicans say they uphold, their own reform would have to be scrapped almost as soon as it is passed -- a fact they've recognized, in their own way, by making it partly self-scrapping.

Republicans are right about one thing: The U.S. tax code needs radical improvement. Unfortunately, the plan they're working on isn't it.
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[ConnorEl]

Dear senators: Don't bankrupt our country

Quote
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....This may make it seem that poor taxpayers will gain slightly while rich taxpayers would obviously gain a lot. In fact, the poor and working class will almost surely end up far worse off than now. When steps are taken to close the deficit, programs like Medicare will face the ax, or payroll taxes will rise. The bottom half will end up paying much more than they gain in the meager tax cuts allocated to them.

This is just basic fiscal arithmetic: If you make massive transfers to the rich, the rest of society will pick up the bill.

As you know well, senators, most economic models show large and persistent budget deficits as a result of the House proposals.

Even if there is some modest economic growth down the road, the tax losses will come up front while any growth effects will come later. In fact, we should not expect much, if any, added growth. Some sectors might benefit slightly (manufacturing) while others (commercial and residential buildings) are likely to be hit...

...Yet such a preferred policy would also have to be made up by raising tax revenues elsewhere, both to pay for the accelerated depreciation and to move towards closing the long-term fiscal gap.

Real tax reform would also include an end to the abusive transfers of intellectual property to overseas tax havens by America's largest companies, such as Apple, Amazon, Alphabet (Google), Facebook, and Microsoft; an end to the carried interest loophole by wealthy CEOs of hedge funds and private equity funds; an expansion of the Earned Income Tax Credit for low-wage workers; and a tax on carbon emissions so that fossil fuels pay their true social cost. None of these are in the House tax cut.

Real tax reform certainly would not repeal the estate tax paid by the mega-rich, a clear and ruthless wealth grab by the President and his Cabinet of billionaires.

Real tax reform would not make incentive effects temporary, such as the Senate proposal to eliminate expensing of investments after five years. The phase-out of key incentives exposes the hypocrisy of the tax-cut effort. If the real goal is to improve incentives, then do so, but pay for them honestly. To propose eliminating incentives within a few years makes clear that the real aim is to transfer trillions of dollars to the richest Americans.

Americans want a government of the people, by the people, and for the people, as expressed by the great Republican President, Abraham Lincoln. They do not want a government of the ultra-rich, by the ultra-rich, and for the ultra-rich. Americans want to be able to compete in world markets without the government suffocated by debt. Please protect our nation from fiscal disaster at the hands of a few greedy donors to the Republican Party.

With respect,

Jeffrey D. Sachs, university professor, Columbia University
————

 

[ONW]

Again, without arguing over the minutiae of whether these bills will save X or Y American a few (or a lot of) bucks next year, look at the social vision behind the plans. Big business is going to get full expensing of new equipment, which is a something the business lobby has been wanting since basically the dawn of the income tax. Killing the mandate is going to make health insurance more expensive across the board, so workers will be even more expensive to employ. Estimates are that around 35% or more of the tax benefits will go to foreign investors who own big stakes in US companies, and history shows that the cash stashed abroad will be used to buy back shares and provide dividends, not raise worker pay.

The big "populist" and "nationalist" movement of 2016 is going to produce, as its crowning achievement, a tax plan that heavily favors big businesses and foreign investors who replace blue collar workers with machines. But hey, at least it screws college kids and those damn libruls with their big houses on the coasts. Way to go rubes.

"The moderator then asked those in attendance whether they were planning to increase their business investment if the tax bill became law. The CEOs in attendance did not seem to be on the same wavelength as Cohn."

"While there was a smattering of raised hands in the auditorium, it was clearly not as many as Cohn would have liked."

http://www.businessinsider.com/trump-gop-tax-plan-gary-cohn-bill-2017-11

 

[ConnorEl]

The Republican War on College

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...The second reason is subtler, but perhaps equally significant. To pay for a permanent tax cut on corporations, the plan raises taxes on colleges and college students, which is part of a broader Republican war on higher education in the U.S. This is a big deal, because in the last half-century, the most important long-term driver of wage growth has arguably been college.

The House bill would reduce benefits for higher education by more than $60 billion in the coming decade. It would shock graduate students with sudden tax increases, punish student debtors, and force schools to raise tuition at a time when higher education already feels unaffordable for many students. On balance, the GOP plan would encourage large corporations to invest in new machines in the workplace, while discouraging American workers from investing in themselves...

...If that chain of causation was too confusing, here’s an executive summary: By pressuring states to spend more on health care while hampering their ability to raise taxes (never an easy thing to begin with), GOP tax and budget policies could deprive public colleges of state funding, which would force American students to pay more.

This would almost certainly lead to a rise in student debt. So it would make sense to make that debt easier to pay off. The House bill does the opposite. It would eliminate a provision that allows low- and middle-income student debtors to deduct up to $2,500 in student-loan interest each year.

If the GOP lawmakers are proposing to make it harder to be a full-time student, perhaps they are at least going to make it easier to be a part-time student? Nope: The Lifetime Learning Credit, which typically allows workers to deduct the cost of part-time classes, is also eliminated in the House bill. Making it easier for adults to attend college part-time is crucial if, as the White House has claimed, the U.S. economy suffers from a “skills gap.” Republicans seem to be arguing that Americans need to get new skills, while making it more expensive to acquire them. (Some economists doubt that there is a skills gap in the first place, but penalizing mid-career education would be a good way to create one.)

My claim is not that Republicans composed this bill in a smoke-filled room to purposefully screw over public universities and college students. But it’s no coincidence that these bills were written by a party that increasingly relies on non-college-educated whites, as young college graduates have voted for Democrats at a historically high margin.

Education is now a more significant dividing line in the electorate than income. According to a recent Fox News poll, non-college-educated whites still approve of the president by an 11 percentage-point margin (50 percent to 39 percent), while white college graduates disapprove by the same margin (56 percent to 45 percent). GOP voters are increasingly not only not college educated, but outright anticollege: 58 percent of Republicans now say that “colleges and universities have a negative effect on the way things are going in this country.” Just 19 percent of Democrats agree.

For the white middle class, a turn against college is a profound historical irony. The GI Bill was more responsible than almost any other law in fashioning the 20th century’s middle class. Many Trump voters feel left behind, or worry that their children will grow up poorer. It’s extremely unlikely that these families will personally benefit from a large tax cut for General Electric and Apple. What they could use, instead, is some extra money today, plus an education system that prepares their kids for a new career, in a field that isn’t in structural decline.

Designing that sort of policy is totally possible, at least mathematically. For the multitrillion-dollar cost of reducing the corporate income tax from 35 percent to 20 percent, the U.S. could provide universal pre-K education and free tuition at public colleges for nonaffluent students. For far less, it could keep the tax code’s current higher-education benefits, which help millions to get a college degree and find a higher-paying job.

With a huge corporate tax cut that includes full expensing, “the GOP is encouraging companies to invest in machines and saying it will help labor, but there is not much evidence for this sort of trickle-down economics,” Rueben says. “But there is lots of evidence that investing in human capital through education is a sure way to increase wages.” Republican tax and budget policies could impoverish public colleges, punish low-income graduate students, and raise the effective price of student debt—all to make it cheaper for large businesses to invest in nonhuman technology.

A post-human workforce is not an inevitability. But in the future that the GOP is constructing, in which machines are cheap and higher education is expensive, companies will see it as an awfully tempting option.
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[06deacon]

Yeah, because the majority of americans will happily trade X dollars now if it costs them some 10 years from now. The average customer with a credit card (About 50 million people) has an outstanding balance of $16k. Most people are probably better off paying that off over the next 10 years, even if the tax rates expire.

And unless I'm wrong they can just revise the code at that point and make it permanent. Congress isn't going to allow those cuts to expire, once you given them, they'll be permanent one way or another. Acting as if they would simply expire is fairly unrealistic, don't you think?

I think it's bad policy to model our tax system after a rube with credit card debt. This is not the defense you should be using.