quote:

Originally posted by mbinky:
The more he opens his mouth the more I'm convinced the commies turned him when he was a POW.

He is opossing everything for the sole reason of having a personal beef with Trump. He could give a shit about the American people.

I can't argue. If the shoe fits . . . .

here is some good news.


GOP Tax Reform Bill Will Stop Illegal Immigrants from Collecting Tax Credits


According to its authors, the new GOP tax bill will strip illegal immigrants of their ability to claim and collect several major tax credits.

Doing so will save the federal government an estimated $23.1 billion over the next decade.

The bill will do this by closing IRS loopholes and requiring all taxpayers to submit work-eligible Social Security numbers in order to claim tax credits.

This may come as a shock to some who take for granted the assumption that illegal aliens don’t receive state benefits—especially tax credits. However, it’s an open secret that the IRS has allowed illegal aliens who pay tax to collect a number of tax benefits, including the American Opportunity Tax Credit and the Earned Income Tax Credit.

Although previous governments have attempted to end the spending, the IRS has maintained that it has the authority to interpret tax law, given that direction from Congress is often bare-bones, and presidential direction (under Obama) was two-faced.

While this presumption is generally accepted, this cannot be used to shield the IRS from specific Congressional diktats.

Now that President Trump controls the White House, the IRS will have no latitude to interpret the law as it sees fit: Trump is cracking down on illegal immigrants and the administration will need to fall in line.

Finally, I feel compelled to remind our readers that tax credits are a paltry sum compared to government services consumed by illegal aliens.

For example, illegal immigration costs the State of California $135 billion annually—17.7 percent of the state budget. This is primary reason why California’s infrastructure is increasingly dilapidated, and its public schools are among the worst in the nation.

Immigration is milking the American people dry, and Congress is finally moving in the right direction.

https://www.nationaleconomicse...form-illegal-aliens/

I’m done with these lying motherfuckers. Let the tax bill die. Right now on on the news they’re talking like Democrats. Pass a bill for the sake of passing it.

The middle class will not get a tax cut, the blue states will become more pissed than they are already, we become more divided, loss of tax-free muni bonds, etc. This is a disaster like health care reform.

Losers. All fuckin losers.

quote:

Losers. All fuckin losers.

Ya.... the House bill isn't GREAT but it's a hell of a lot better than whatever will come out of the Senate. They suck!

Stocks Tumble On News Senate Tax Plan To Delay Corporate Tax Cut Until 2019

Confirming reports from earlier this week that the Senate GOP tax plan would delay the corporate tax cut for (at least) one year, a move that would strip the proposed tax reform of its most potent benefit, moments ago the Wapo reported that in a few hours, Senate Republicans will propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019. Bloomberg confirmed the news, quoting Bill Cassidy who said in an interview that that Senate Finance Committee tax legislation proposal will include a one-year delay before cutting the corporate tax rate to 20%.

The compromise would be a major departure from President Trump’s insistence on immediate changes that he says "are necessary to spur the economy." And while some Senate Republicans objected to the one year delay, they were overruled.

As Bloomberg adds, the Senate tax writers will also propose keeping number of individual income-tax brackets at seven in a departure from the House bill that condenses the number to four, Sen. Bill Cassidy tells reporters. Cassidy also says Senate proposal won’t keep top rate at 39.6%, though doesn’t state what new top individual rate would be

In an attempt to offset the delayed economic boost from excess corporate spending, the WaPo explains that to prevent companies from waiting until 2019 to invest, "Senate Republicans will propose to allow companies to immediately deduct all capital investments in 2018 to incentivize them to spend more money immediately, the people said."

The reason for the delay is simple: there is not enough revenue. "The one-year delay would lower the cost of the tax cut bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes." The revision could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.

As we have explained previously, the Senate approach is different than House Republicans are taking as it is limited by practical considerations: while the House is advancing a bill that would lower the corporate tax rate in 2018, they are also having problems dealing with the total cost of their bill, which has ballooned beyond the $1.5 trillion price tag they were permitted under budget rules.

And while Treasury Secretary Steven Mnuchin told Bloomberg yesterday that the White House’s “strong preference” would be for the tax cut to go into effect next year, the White House is not expected to threaten blocking the bill over this change.

http://www.zerohedge.com/news/...l-2019-stocks-tumble

November 10, 2017
Senate Republicans Aim to Torpedo House GOP Tax Reform Bill
By William Sullivan

If reports about the Republican Senate resonse to the House tax reform bill are true, we could be witnessing the GOP’s suicide.

The House GOP tax bill is, as I’ve argued, a fundamentally flawed bill in some ways. But in many others, it’s a pretty good one. In what could only be described as an epic feat of failure, though, Senate Republicans are reportedly seeking to double down on its flaws, and undo much that is good about it.

Let’s begin with a simple fact. Not conjecture, but a fact. A bill which cuts taxes for all Americans cannot be immediately revenue neutral for the government.

Efforts to craft a tax bill which is revenue neutral requires that government pick winners and losers among its taxpayers, because immediate revenue neutrality can only be accomplished by zero-sum exchanges in order to achieve it.

For example, to cut taxes for the middle class while remaining revenue neutral would require that the same amount of uncollected revenue be shored up by other means. Governments tend to then arbitrarily target specific groups to make up for that lost revenue. Often, because it’s politically expedient to do so, higher-income earners and/or wealthier Americans – not always the same people – are targeted.

If this is what you believe to be a “tax cut,” you must admit that socialists like Bernie Sanders are incredible advocates of tax-cuts.

Somewhat problematically, the House tax bill includes some such exchanges.

The bill does dramatically simplify the tax code. It reduces the number of marginal brackets from seven to four, and reduces the tax liability across the board via marginal rate thresholds. These are very good things for American income earners, and specifically for advocates of actual tax cuts, because it allows Americans’ to keep their earned money (which is their rightful property before it is the government’s) and because we believe individuals to be better stewards of their own money than our government, which has proven to be infinitely wasteful.

But even the House bill does other shifty things to shore up that revenue from higher income earners. It includes deep limitations to the state and local income tax deduction (up to $10K only) and mortgage interest deduction (only on debt up to $500K), which are meant to specifically and negatively impact higher earners in particular areas of the country. Most notably, though, the bill has a sneaky mechanism to “phaseout” or ultimately eliminate the lowest 12% income bracket for married earners over $1.2M annually, for example, taxing some of their earnings at 45.6% in order to do so.

Those are some of what I believe to be the bad things which target higher income earners to help “pay” for the tax cuts. But what about the good things?

Simplifying marginal tax rates from seven to four brackets? The Senate is reportedly considering keeping the seven brackets, while suggesting that they hope to modestly reduce the rates and/or lower the thresholds for each bracket.

State and local tax deductions limited to $10K? The Senate may double down on this targeting of the higher earners in specific states by eliminating the deduction altogether, according to the Washington Post.

Corporate tax reductions? Sure, but they may have to wait a bit to do that. “While Senate Republicans say they still hope to make corporate tax cuts immediate and permanent,” the Post reports, “they are planning to pair any potential delay with other initiatives to limit its impact on the economy.”

If Republicans choose to amend the House bill to not include corporate tax cuts in 2018, Republicans may get creative and allow companies “to immediately deduct capital investments in 2018 from their taxable income,” which would “avoid having companies wait until 2019 to spend on the economy.”

If allowing corporations to retain more capital will spur spending on the economy, why wait to 2019 cut corporate taxes? It makes no sense. Unless… this is an olive branch to Democrats to give the appearance of “paying” for the tax cuts. This is dangerous, if only because the “permanence” of a 2019 corporate tax cut may be threatened by the 2018 midterm elections.

Here’s what’s most aggravating to me, though. Senate Majority Leader Mitch McConnell had a pretty good answer to the question of revenue neutrality in the bill. When asked by a reporter to respond to criticism about the plan not being revenue neutral, he said:

There’s all kinds of reports about all kinds of proposals. On the Senate side, we haven’t laid out our proposal yet. But you know from the budget, that the $1.5 trillion-dollar gap, would be closed if we only had four-tenths-of-1% growth in the next ten years. Which is a really modest projection of what growth would be. So we fully anticipate that this tax proposal, in the end, would be revenue neutral for the government, if not a revenue gainer.

The tax cuts will yield more money in Americans’ hands, which will yield substantially more economic growth, which will yield greater tax receipts in the long run. Why is it so difficult to run with that message and move forward with only modest amendments to the House tax reform bill? We conservatives are not about growing government’s power, but we certainly know that tax cuts can lead to economic growth, and along with that, government revenue can increase as an ancillary outcome.

Sure, the House tax reform bill is not perfect for small-government, big liberty loving Americans like me (to loosely borrow from Mark Steyn). And frankly, as a conservative voter, I’m bothered that we can’t get nearer to perfect than the House bill, given Republican control of Congress and the White House.

But maybe the problem keeping us from a perfect bill is in Republicans’ fundamental messaging. As described by Ed Feulner, founder of The Heritage Foundation:

Just tinkering with the tax code, though, may not be a political or economic winner. The system needs to be rebuilt – made simple and pro-growth. Market research shows that that what Americans want most from the tax system is “fairness,” so shaping the popular definition of that term will be key to winning the policy debate.

A fair tax system isn’t one that takes from the rich to give to the poor. It’s one that requires everyone play by the same rules.

Though they have the opportunity to rebuild the tax code, Republicans haven’t done enough to shape this definition of fairness as effectively as Democrats have shaped their definition of fairness to mean that the government should take from the rich to give to the poor as the highest of moral causes.

Nonetheless, if the Senate’s answer to the House bill is to subvert its positive core measures, while keeping or exacerbating much of what is bad in order to appease Democrats and promote the Bernie Sanders mantra that corporations and high-income earners should finance tax cuts for everyone else, then Republican promises to cut taxes may prove just as empty as their promises to repeal Obamacare.

Just as the GOP should have simply repealed Obamacare when they had the chance, they should just simply cut taxes today. But it appears that they’re getting lost in the swamp again.

http://www.americanthinker.com...tax_reform_bill.html

They can spin it all they want, but unless they get it done, have it actually be meaningful, and have it effective THIS year, they are going to make a lot of supporters angry, myself included!

It pains me to say this, but I'll say this for the Democrats. At least they know how to get "strategic" wins when it comes to legislation and political ground while the splintered Republicans love explaining how things didn't happen and get passed "on principle". When will the Republicans learn that strategic and meaningful legislative wins help actually steer the country dramatically for years if not decades while principled losses mean jack diddly to the country and the populace. Ideologies thrive on successes, not failures! Republicans have been the party of cut off your nose to spite your face and then make excuses for far too long and I for one am sick of it. If they thought the apathy and lack of turnout hurt in Virginia, just wait and see what will happen if they fail to deliver tax reform. Change your freaking playbook already! Yet another glaring example of why we need term limits too. I'm not saying not to have principles, but effectiveness matters.

On another note, I'm convinced that they have purposely avoided including anything regarding capital gains tax rate reductions because they know there are a lot of people out there sitting on gains, just waiting to see what happens with taxes so they can actually benefit and take some profits off the table. They are afraid of the market taking a dip in the short term instead of providing an actual benefit for investors. Contrary to what some might think, there are A LOT of middle class investors out there and if the corporations can get a 15% or 20% tax rate, then so can individual investors.

The House caved on eliminating property tax deduction. Twenty high property tax states Republican Representatives joined 50 Dems in eliminating property tax deductions. While I understand the pain of some, I suspect that Larry Ellison and his ilk are huge beneficiaries of writing off the tax on personally owned property. I read a WSJ profile article about a Lake Tahoe resident who said he pays over $400K in property tax on his home to Washoe County. NV (he also said he could afford to pay it). Can you even imagine the property tax bill on Central Park apartments? In Pac Hts, San Fran?

I predict this class of uber rich in CA and NY will remember their Representative's courageous stand. The Senate will also see the wisdom and cave also.

This message has been edited. Last edited by: cne32507,

House Set To Pass GOP Tax-Reform This Afternoon

Last night, Sen. Ron Johnson surprised the GOP Senate leadership by coming out against the republican tax plan "in its current form", the latest sign that the Republican push to pass comprehensive tax reform by New Year’s will struggle in the Senate. Still, that won’t stop the more Trump-friendly House of Representatives from passing their version of the bill, which they’re expected to do this afternoon following a meeting with the president.

While the vote totals are expected to be tight, House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady both said the bill will likely pass, and they wouldn't be pushing for a vote unless they had it in the bag. President Trump will visit Capitol Hill ahead of the vote to rally support, but, according to the Hill, it appears there will be little need to twist arms. All three of the House’s major Republican factions have given the bill the green light.

Speaker Paul Ryan (R-Wis.) and fellow leaders have been in a buoyant mood all week, signaling they have the 217 votes needed to pass the Tax Cuts and Jobs Act.

And the days leading up to the vote have been relatively drama-free, as the three main House GOP factions - the far-right Freedom Caucus, conservative Republican Study Committee and moderate Tuesday Group - have either backed the bill or stayed on the sidelines.

Already, House Republicans are heralding the accomplishment as a sign that the Republicans can still get it done in Congress.

“It’s more than just a tax bill. It will show that Republicans can get things done,” said Rep. Dennis Ross (R-Fla.), a senior member of House Majority Whip Steve Scalise’s (R-La.) vote-counting operation.

In what may have helped House leaders, Trump took a step back in the process of whipping up votes (he was conveniently touring Asia when most of the heavy lifting was being done). And though Republicans credit him with “remaining engaged” with the process, some fear that he could veer off message in this afternoon’s pep talk and somehow disrupt the carefully assembled Republican coalition.

The big tax-reform vote will allow Republicans to recapture the headlines in a week that has been dominated by allegations of sexual misconduct made against Alabama GOP Senate candidate Roy Moore.



But there’s also a small concern among some Republicans that Trump could veer off message during his visit to the Capitol and somehow disrupt the coalition for the tax bill that GOP leaders have so carefully assembled.

Republicans – having learned from their failure to repeal Obamacare which also passed the House relatively easily – will take care not to gloat too much, as things can always unravel in the Senate.

That Senate collapse is part of the reason GOP lawmakers aren’t expecting to take a victory lap in the White House Rose Garden on Thursday like they did after the House’s successful ObamaCare repeal vote. They don’t want to be seen as celebrating prematurely before Congress can send a final tax package to Trump’s desk.

In the long run, a legislative victory in the House won’t have much impact on the bill’s long-term chances of passing, because the risk is primarily centered in the upper chamber. Furthermore, the Senate and House tax plans must eventually be reconciled and merged into a final plan that can pass both chambers before it goes to Trump to sign into law. But to get to that point, the Senate first needs to pass its own version of the bill. Johnson is a confirmed ‘No’ - his opposition stemming from his view that the bill unfairly benefits corporations over other pass-through entities like S-Corps and LLCs – but as many as seven other senators have hinted that they’re dissatisfied with the bill as it stands.

In summary, passing the House version of the plan is the easy part. House Ways and Means Chairman Kevin Brady and Speaker Paul Ryan only needed to create a sop that would win over enough blue-state Republicans (rejecting the mortgage deduction but preserving a scaled-back version of the SALT deduction), the only intransigent faction in the Trump-friendly House.

In the Senate, the political calculus is much more complex. And with such a slim majority, Republicans can only afford to lose two votes to bring in Vice President Mike Pence for the tiebreaker.

Given the Trump administration’s legislative record to date, there’s still a chance the bill could fail in a surprise upset (there is precedent for that, of course). If that happens, the chances of passing the tax plan by year end will fall to virtually nothing.

http://www.zerohedge.com/news/...eform-plan-afternoon

David Stockman does not like the Senate version of the bill:

Stockman On America's Fiscal Sundown, Part 1
by David Stockman

The Senate Finance Committee tax bill is not supply side and it's not even a tax cut; it's a gimmick-ridden policy mongrel that smells to high heaven of political desperation and cynicism.

Contrary to the Donald's delusional promise that the American people will get some tax cut sugar plums for Christmas, we are reasonably confident that this misbegotten exercise in reverse-robin hood economics won't reach his desk. But whether it passes in some diluted form or not, we are entirely sure that what the American people are actually getting is a giant lump of fiscal coal----courtesy of the craven capitulation of McConnell & Co to the K-Street lobbies and Wall Street.

And we do mean craven in the very fullest sense of beltway mendacity. Come to think of it, we have witnessed few exercises in raw partisan brinksmanship that were as meretricious and fiscally irresponsible as the current GOP campaign to pass a tax bill---any tax bill--- merely for the sake of posting a legislative victory.

And that assessment comes after scrolling all the way back to 1970, when your editor got a $50 loan from his mother in order to buy an airline ticket from Boston (where we were hiding out from the Vietnam War at Harvard Divinity School) to Washington DC (to interview for a job on Capitol Hill). As it happened, we got the job, paid back the loan and have since then witnessed 47 years of Warfare State and Welfare State aggrandizement up close and personal.

But what is now happening in the Imperial City is a true turning point for the worst. The last vestige of fiscal rectitude is now being deep-sixed by the GOP's vestigial budget hawks in the name of pure partisan advantage.

To be sure, the partisan juggernaut that resulted in Obamacare in 2010 was every bit as craven and fiscally deleterious. It accommodated every element of the nation's bloated health care cartels---hospitals, doctors, pharma, HMOs and insurance companies----with sweetheart reimbursement schemes in return for their acquiescence to the bill's passage and the fulfillment of what had been a 60-year Dem quest for quasi-socialized health care.

Yet at least the Democrats did attempt to finance the trillions in new tax credits and Medicaid costs generated by ObamaCare with some revenue raisers such as the medical device and insurance company taxes and the added levies on upper income earners and investment returns.

Back in the day, in fact, this kind of "tax and spend" welfare statism is exactly what the Democrats stood for. And it was also the party's political Achilles Heel because it enabled the GOP to periodically arouse the electorate on the dangers of "big government" and thereby obtain a resurgence in Washington's corridors of political power.

But after the break from the old-time fiscal religion of balanced budgets during the so-called Reagan Revolution in 1981, the GOP has slowly morphed into the "borrow and spend" party.

Indeed, as the historically ordained party of fiscal rectitude, the GOP's apostasy has enabled two-party complicity in a mindless regime of fiscal kick-the-can since the turn of the century. That lapse, in turn, acutely aggravated an already perilous fiscal equation owing to the baby boom retirement wave and the Fed induced slowdown in the trend rate of economic growth (see below).

In this context, it should be noted that the Senate bill is a farce insofar as it claims to be a middle class tax cut and growth stimulant---since it actually accomplishes neither.

On a honestly reckoned basis (counting debt service and eliminating budget gimmicks), however, it would add $2.2 trillion of new debt over the next decade on top of the $12 trillion already built-in under current policy. Accordingly, the Senate version of Trumpite "tax reform" would accelerate the public debt toward $35 trillion by 2027 or 140% of GDP.

Yet all of this added red ink would be "wasted" on cuts for 150 million individual taxpayers that are written in disappearing ink (i.e. they lapse after 2025) and on misbegotten corporate rate cuts that will do virtually nothing for economic growth. Indeed, contrary to the old Washington saw about "wasting a good crisis" the Senate bill involves something more like creating a good crisis and wasting it, too.

In the first place, you don't really even need a tax table to see that the overwhelming share of individual taxpayers get shafted----aside from 4.2 million very wealthy filers who would benefit from the alternative minimum tax repeal and a few ten thousand high income business owners who will get a 17% deduction for eligible business income ( a version of the House's pass-thru rate of 25%).

By 2025 the combined cut from these two provisions amounts to $155 billion per year; and despite sun-setting the following year in keeping with the general fiscal scam of the Senate bill, it's unequivocally big bucks of tax relief for households at the tippy-top of the economic ladder while it lasts.

By contrast, there are no net goodies at all even while the provisions do last for the remaining 145 million individual filers. (All individual tax provisions expire at the end of 2025 in order to propagate the myth that the bill does not add to the long-term deficit and thereby complies with the so-called Byrd Rule for reconciliation and the 51-vote majority).

In fact, the overall deal is a crap shoot. According to the Joint Committee on Taxation, when fully effective in 2025, the Senate bill will lower rates in the seven brackets by $165 billion per year and provide further relief of $102 billion owing to doubling the standard deduction (to $25,000 for joint returns) and $78 billion for doubling the child credit to $2,000 per eligible dependent. So that's $345 billion per year of "cuts".

At the same time, repeal of the existing $4,050 personal exemption, complete repeal of the SALT deduction and other loophole closers would raise tax collections by $355 billion in 2025. In a word, aggregate households other than business owners and alternative minimum tax payers, come out $10 billion in the hole---and that's in the best year (2025) before it all expires!

Surely, this is the farce of the century; after the estimated 350 amendments slated for consideration on the Senate floor, it will undoubtedly be subject to the full measure of the ridicule and legislative scorn and redo it deserves.

By the same token, the $1.4 trillion ten-year cost of cutting the corporate rate to 20% and eliminating the corporate minimum tax is permanent. That is the source of all the Wall Street excitement about the bill, but also the reason why the GOP claims that it will stimulate a tsunami of economic growth are so completely groundless.

In a word, the corporate tax is paid by shareholders, not workers; America's big businesses have located production and jobs off-shore (as opposed to merely their tax books and small HQ operations) to access cheaper labor costs and to be nearer to supply chains and end markets, not due to the 35% statutory rate (which few US-based internationals pay); and owing to decades of central bank financial repression and the falsification of financial asset prices, debt and equity capital has never been cheaper.

Accordingly, the $1.4 trillion corporate rate cut will not go into more jobs, more domestic investment or higher wages; it will overwhelmingly be returned to shareholders in the form of stock buybacks, higher dividends and leveraged recaps. That is, it will go to the 1% and the 10% who own most of the publicly traded equities in the US.

We will examine the GOP's phony "growth" and "dynamic scoring" story in greater depth in part 2. But the larger point here is straight forward: Why try to fool the middle class with a temporary tax cut?

That is, an unsustainable budgetary maneuver that is hostage to a growing fiscal crisis. Yet the GOP is wholly unwilling to confront the latter by reeling in a runaway Warfare State and $3 trillion per year of entitlements and other mandatory spending programs.

http://www.zerohedge.com/news/...iscal-sundown-part-1

November 29, 2017
Tax Reform: History Lessons for the Middle Class
By Jon N. Hall

On the 70th anniversary of the Pearl Harbor attack, CBS News’ "MoneyWatch" ran “How would you feel about a 94% tax rate?” William T. Zumwalt reported:

In April 1942, just a few short months after the attack, President Roosevelt proposed a 100% top rate. At a time of “grave national danger,” he argued, “no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year.” (That's roughly $300,000 in today's dollars).

Roosevelt never got his 100% rate. However, the Revenue Act of 1942 raised top rates to 88% on incomes over $200,000. By 1944, the bottom rate had more than doubled to 23%, and the top rate reached an all-time high of 94%.

There’s your progressive for you, they know exactly how much income a citizen “ought to have,” and beyond that they want only 100 percent. But WWII was a crisis, you see, and “you never want a serious crisis go to waste” (short video). However, for 20 years after the crisis of WWII, the top marginal tax rate remained in the 90s. This, during the midcentury Pax Americana, when we no longer needed fascistic tax rates to fight fascism in Europe.

The focus on tax rates misses the whole picture, though. One also has to take into account where tax rates kick in. FDR’s 94 percent rate kicked in at incomes of $2,609,023 in inflation-adjusted dollars, which is more than 6.2 times higher than where today’s top rate kicks in for single filers: $418,000. FDR’s 23 percent bottom rate covered incomes from $0 to $26,090 when adjusted for inflation.

The Tax Foundation provided those inflation-adjusted figures on page 38 of the second table; just enter 38 in the place at the bottom of the box and you’ll be positioned at 1944. You’ll also see that there were 24 brackets/rates back in 1944, and they applied to all filing statuses; no breaks for one’s marriage status.

If taxes back in 1944 interest you, then read the 1040 form for 1944. The form’s Tax Table is for incomes of less than $5,000. If one’s income was above $5K, then one had to refer to the 1944 1040 instructions, which were 4 pages in length. For contrast, check out the 1040 instructions for 1954 10 years later, which had grown to 16 pages. On page 14 of the 1954 instructions, one sees that the top rate required one to pay “$235,480, plus 91% of excess over $300,000.” One finds that same levy on page 9 of the instructions for 1963, the last year of the 90+ percent rates.

During a crisis like WWII it’s understandable, but for a 90+ percent tax rate to persist for twenty years after the crisis is not. On August 4, the Tax Foundation ran “Taxes on the Rich Were Not That Much Higher in the 1950s” by Scott Greenberg, who writes: “When we look at income taxes specifically, the top 1 percent of taxpayers paid an average effective rate of only 16.9 percent in income taxes during the 1950s.”

The most salient of the reasons with which Greenberg explains those low effective tax rates is tax avoidance. Government’s tracking of money transfers surely wasn’t as reliable in the days before computers, so it must have been far easier to not report all of one’s income. Progressives who would sniff at Greenberg’s data should note that he was citing a study by Thomas Piketty, the socialist.

Other socialists, like Bernie Sanders, Paul Krugman, Robert Reich, and Hillary Clinton, who cite the 1950s as justification for taxing the evil One Percent more, should tell us why we shouldn’t also tax the working and middle classes more too, because in the 1950s they were paying more. Look at that 1040 form for 1944, and you’ll see that an unmarried person with an income of $5,000 could have an income tax liability of $954 -- an effective rate of 19 percent.

So back in 1944, those not hit by the top rate were still paying a lot in income taxes. 1944’s bottom statutory rate of 23 percent is higher than the effective rate for all federal taxes for some in the top 10 percent in 2016. On Jan. 3, 2013, Bloomberg ran “1950s Tax Fantasy Is a Republican Nightmare,” a nifty little article by economic historian Amity Schlaes:

Official rates matter, but so do effective rates, the percent of income that people actually pay in tax. […] Marc Linder, a law professor at the University of Iowa, has shown that a more comprehensive interpretation of income that includes capital gains suggests the real effective tax rate for millionaires was 49 percent in 1953. The effective rate dropped throughout the decade, reaching 31 percent by 1960. That 31 percent is just slightly higher than the 29 percent level a Congressional Budget Office report figures the average effective tax for the top quintile will be in 2014. […] A second fantasy about the 1950s is that government soaked the rich. Joseph Thorndike and Martin Sullivan in Tax Notes magazine took a look at the tax distribution of the decade. They found that those earning more than $100,000 paid less than 5 percent of the taxes collected in the U.S., a far smaller share than the wealthiest shoulder today.

With the rate cuts of Kennedy, Reagan, and Bush-43, more and more Americans have fallen off the personal income tax rolls. The top 1 percent of income earners has been providing 10 to 13 times the revenue as the bottom 50 percent. Even so, whenever Republicans talk about cutting tax rates, Democrats start wailing about unfairness, and try to stoke resentment among those who don’t pay.

Supply-side economics was terrific for the times when the top marginal rates were 70 percent (1981) and 91 percent (1963). But it’s time for Republicans to retire supply-side tax rate cuts, as statutory and effective tax rates are much closer today than in the 1950s. Now is not the time to cut revenue from the personal income tax. Now is the time for caution.

Allowing income earners to pay less in personal income taxes is risky for several reasons. There’s the risk that the business cycle will kick in right after rate cuts; Dems would then blame the ensuing recession on tax cuts for the rich. There’s the political risk presented by the old class warfare tripe from the likes of a Sherrod Brown (short video). Also, a revved-up economy, which is what the rate cuts are supposedly for, is not without inflationary dangers. But the main risk may come from servicing the debt we’ve already run up, the new rollover regime.

One could be all for cuts in personal income tax rates if they were totally offset with cuts in “tax expenditures,” and exceptions (deductions, exemptions, etc.). But the rate cuts aren’t being totally offset in the legislation under consideration. So the deficit will rise. We might also take note that in the era of 90+ percent tax rates, from 1944 through 1963, Congress ran seven balanced budget surpluses.

Merely cutting rates isn’t tax reform.

http://www.americanthinker.com...he_middle_class.html

real Property Tax Reform would be the elimination of it...

even if the same exact number of dollars are collected by other means, it's still a giant win.

once it's paid off you either own your property or you don't, and we don't, not when it's at perpetual risk of loss over the failure to pay a perpetual tax for simply owning it.

you don't own your property, you're renting it, and that's flatly wrong.

Senate passes tax reform but the hard part remains

The Senate handed Donald Trump a significant victory early this morning, voting 51-49 along party lines to pass a massive overhaul of the tax system that Republicans hope will jump start the economy and create millions of jobs.

NBC News:

The legislation would bring the first overhaul of the U.S. tax code in 31 years. It would slash the corporate tax rate, offer more modest cuts for families and individuals, and eliminate several popular deductions.

Trump hailed the bill’s passage on Twitter, thanking Majority Leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch, R-Utah. “Look forward to signing a final bill before Christmas!” the president wrote.

Democrats derided the reforms as a GOP gift to the party's wealthy and corporate backers at the expense of lower-earning people.

The bill is “removed from the reality of what the American people need,” said Senate Minority Leader Chuck Schumer, D-N.Y.

Republicans achieved success by making several last minute changes to the legislation to assuage the fears of deficit hawks and address some other issues like property tax deductions and pass through provisions for small business. In the end, only one Republican - Senator Bob Corker - refused to back the bill.

The bill now goes to a House-Senate conference committee that will have to deal with the differences between the two bills. While Trump hailed the passage of the bill in the Senate and said he hoped he could sign a bill "by Christmas," the dissimilarity in approaches to tax reform by the two Houses of Congress makes coming to an agreement on a final measure by Christmas iffy.

Regardless, it is the spending cuts mandated by the bill that will likely become the next battleground, as massive cuts in federal benefit programs like Social Security, Medicare, and welfare become the next political hot potato.

Politico:

With so much attention focused on the tax bill itself, neither lawmakers nor many of the advocacy groups had paid as much attention to the depth and breadth of the cuts that will ensue unless the House and Senate come up with a bipartisan deal to stop them. Some groups had run Medicare ads, but they were largely overshadowed by the tax debate itself.

The tax bill hit snags in the Senate late Thursday, as Republicans worked on ways to ease the concerns of deficit hawks. Leaders were still scrambling for votes.

But within the GOP, leaders are confident that once the tax bill is passed, they can strike a quick deal to waive the federally mandated cuts. But Democrats deeply opposed to the tax bill aren’t making any promises they’ll agree to bail out their rivals — raising the risk of a historic gutting of government programs.

“This would be unprecedented,” said William Hoagland, a senior vice president at the Bipartisan Policy Center and a former GOP Senate staffer with expertise on the budget. “The law never envisioned that we’d eliminate programs.”

GOP leaders are asking moderates like Susan Collins (R-Maine) to back the tax package with the mere promise that lawmakers can find a bipartisan solution during an already divisive year-end crunch that could lead to a government shutdown.

One senior House GOP source was confident a deal on spending would go through. "A statutory PAYGO sequester has never happened, and we will prevent one from being triggered," the source said, adding that Congress has until the end of the year to work it out.

The far reach of the Republican tax plan is the consequence of limitations placed on Congress under the “pay-as-you-go” rule. The decades-old law, revamped during the Obama presidency, requires Congress to offset the cost of each piece of legislation or risk spending cuts painful to both parties.

Lawmakers have repeatedly voted to waive this rule, a total of 16 times, for major bills like the Obama-era stimulus and multiple tax cut packages under George W. Bush.

The GOP’s $1.5 trillion tax plan would trigger $150 billion in cuts to domestic programs every year for a decade if Congress doesn’t step in, according to the CBO. That would include $25 billion from the money Medicare pays health care providers.

It should be understood that both parties in the past have used this cynical ploy to include spending cuts in legislation that they never intend to go through with. This is not to say that these programs shouldn't be cut, or their growth controlled. But what is required to cut them responsibly is a scalpel. The tax plan would take a meat ax to those programs - a deliberate ploy to get lawmakers to waive the paygo rule later.

But Democrats are making noises about not going along with the ploy this time. They may vote against a waiver of the paygo rule in order to put the onus for the draconian cuts on Republicans. Aside from raising doubts about whether it's smart politics for the Democrats to go to the mattresses on the paygo waiver, it's going to be difficult enough to come up with a spending bill in the next 10 days to keep the government from shutting down.

But this is a political sideshow compared to the historic nature of the tax cuts. In one stroke, Republicans have cut corporate taxes that could keep more businesses in the US, create more US jobs, and perhaps even convince some companies that have moved overseas to come back.

I don't think too many of us thought that Mitch McConnell had it in him to ramrod this bill through the Senate. But there is little doubt that he and his lieutenants deserve the lion's share of the credit for getting the bill to the finish line.

http://www.americanthinker.com...rd_part_remains.html

Sustainable Tax Reform Requires Taming Entitlements

The deficit indicates a spending problem, not a tax one.

Can Washington afford to cut taxes by $1.5 trillion over a decade? The Washington intelligentsia says absolutely not, given the $78 trillion in budget deficits that CBO is projecting over the next 30 years.

But the true answer requires digging deeper into that projected long-term deficit. It consists of Social Security and Medicare running an $82 trillion deficit and the rest of the budget running a $4 trillion surplus. Washington does not have a revenue problem, or even a defense-spending problem. It has a colossal Social Security and Medicare problem.

In that context, tax reformers and critics are fighting over the change in the couch cushions. Federal tax policy will ultimately be determined by the fate of Social Security and Medicare. Unless fundamental reforms are enacted within the next few years, no tax cuts can survive long-term.

Popular mythology suggests that Social Security and Medicare are self-financing insurance programs that do not contribute to deficits. If that were true, cuts to taxes other than the payroll taxes that allegedly finance the programs would pose no threat to their solvency. In reality, the 30-year deficits will total $19 trillion for Social Security, $40 trillion for Medicare, and $23 trillion in interest costs from these two programs’ deficits. (These numbers can be adjusted for inflation by cutting one-third.)

Social Security’s deficits are a recent result of Baby Boomer retirements. Taxpayers still owe the Social Security Trust Fund $3 trillion in return for raiding program surpluses for decades, after which the taxpayer bailouts will continue.

Medicare has been in deficit from the start because payroll taxes and premiums were never intended to fully finance the program. The typical couple retiring today will receive a net present value of $422,000 in Medicare benefits in return for $140,000 in lifetime contributions to the system.

Unless these programs are fundamentally reformed — and soon — any tax cuts enacted now will soon be washed away in a wave of red ink. The deficits are simply unsustainable.

That does not mean that taxes alone can close the entitlement deficits. That $4 trillion “rest of the budget” surplus that the Washington establishment is protecting from tax cuts would cover just 5 percent of the Social Security and Medicare shortfall. And then what? Even doubling marginal tax rates at incomes beginning at $100,000 for singles and $200,000 for married filers — creating a 79.2 percent income-tax bracket even before state and payroll taxes are factored in — would close just $16 trillion of the remaining $78 trillion gap. And that assumes the economy still functions at such high tax rates. (The Eisenhower economy survived a 91 percent tax bracket because only eight taxpayers paid it in a given year, according to one estimate.)

So while taxes cannot close the entire entitlement deficit, delaying the eventual reforms only expands their cost until significant tax hikes become inevitable.

That would be especially painful because taxes are not historically low. After averaging 17.4 percent of GDP for the past half-century, revenues are projected to rise to 19.1 percent over the next three decades. Thus, American families and businesses will already be overtaxed relative to the post-war tax-policy consensus even before having to further feed the insatiable entitlement beast.

Lawmakers should move forward with tax reform. Strong tax revenues require a strong economy. Under President Obama, the weak economic recovery cost $3 trillion in revenues relative to the budget projections he inherited. Raising annual economic growth by one-half of a percentage point would add $1.5 trillion in revenues over the next decade. And given the corporate tax code’s combination of high tax rates and low revenues, sensible reforms should minimize revenue losses.

Democrats have pledged to block any tax reforms that increase the deficit. However, these same Democrats repeatedly waived budget rules to enact legislation totaling $5 trillion in new deficits under President Obama. If they truly prioritized deficit reduction, they would be trying to rein in Social Security and Medicare rather than embracing Bernie Sanders’s $30 trillion single-payer fantasy.

Ultimately, whether $1.5 trillion in tax cuts is offset is a sideshow affecting 3 percent of federal revenues.

Ultimately, whether $1.5 trillion in tax cuts is offset is a sideshow affecting 3 percent of federal revenues. Without Social Security and Medicare reform, any tax changes will prove temporary.

I am not optimistic. President Trump openly opposes the Social Security and Medicare reforms that would make his tax cuts sustainable. The Republican Congress has simply dropped the subject.

Any hope of minimizing the long-term tax burden on families and businesses — or adequately funding defense and infrastructure — requires taming the Social Security and Medicare deficits.

In short, entitlement policy is now tax policy.

http://www.nationalreview.com/...-reform-required-tax

What's in the GOP's final tax plan
December 15, 2017

Republicans reveal final tax plan details

Well, that was fast.

Just six weeks after lawmakers and the public got their first glimpse of the first draft of a tax overhaul bill, Republicans on Friday released their final version. They aim to pass it next week and send it to President Trump for his signature.

The final bill still leans heavily toward tax cuts for corporations and business owners. But it also expands or restores some tax benefits for individuals relative to the earlier bills passed by the House and Senate.

The individual provisions would expire by the end of 2025, but most of the corporate provisions would be permanent.

All told, the final bill includes trillions in tax cuts, most of which but not all are offset by revenue-raising measures. The bill on net would increase deficits by an estimated $1.46 trillion over a decade, according to the nonpartisan Joint Committee on Taxation. That number would be much higher if, as Republicans assume, a future Congress does not allow the individual tax cuts to expire after 2025.

Here's a quick rundown of 16 key provisions.

FOR INDIVIDUAL FILERS

1. Lowers (many) individual rates: The bill preserves seven tax brackets, but changes the rates that apply to: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

Today's rates are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.

Here's how much income would apply to the new rates:
-- 10% (income up to $9,525 for individuals; up to $19,050 for married couples filing jointly)
-- 12% (over $9,525 to $38,700; over $19,050 to $77,400 for couples)
-- 22% (over $38,700 to $82,500; over $77,400 to $165,000 for couples)
-- 24% (over $82,500 to $157,500; over $165,000 to $315,000 for couples)
-- 32% (over $157,500 to $200,000; over $315,000 to $400,000 for couples)
-- 35% (over $200,000 to $500,000; over $400,000 to $600,000 for couples)
-- 37% (over $500,000; over $600,000 for couples)

2. Nearly doubles the standard deduction: For single filers, the bill increases it to $12,000 from $6,350 currently; for married couples filing jointly it increases to $24,000 from $12,700.

The net effect: The percentage of filers who choose to itemize would drop sharply, since the only reason to do so is if your deductions exceed your standard deduction.

3. Eliminates personal exemptions: Today you're allowed to claim a $4,050 personal exemption for yourself, your spouse and each of your dependents. Doing so lowers your adjusted gross income and thus your tax burden. The GOP tax plan eliminates that option.

For families with three or more kids, that could mute if not negate any tax relief they might get as a result of other provisions in the bill.

Related: Read the Republican tax plan

4. Caps state and local tax deduction: The final bill will preserve the state and local tax deduction for anyone who itemizes, but it will cap the amount that may be deducted at $10,000. Today the deduction is unlimited for your state and local property taxes plus income or sales taxes.

The SALT break has been on the book for more than a century. The original House and Senate GOP bills sought to repeal it entirely to help pay for the tax cuts, but that met with stiff resistance from lawmakers in high-tax states.

Residents in the vast majority of counties across the country claim an average SALT deduction below $10,000, according to the Tax Foundation. Capping it at $10,000 would largely benefit the highest income households in the highest taxed areas of the country. That's because for most low- and middle income people who pay property and income taxes, they would still be better off under the nearly doubled standard deduction -- unless when combined with what they pay in mortgage interest and charitable contributions their deductions top $12,000 if single (or $24,000 if married).

5. Expands child tax credit: The credit would be doubled to $2,000 for children under 17. It also would be made available to high earners because the bill would raise the income threshold under which filers may claim the full credit to $200,000 for single parents, up from $75,000 today; and to $400,000 for married couples, up from $110,000 today.

Like the first $1,000 of the child tax credit, $400 of the additional $1,000 also will be refundable, meaning a low- or middle-income family will be able get the money refunded to them if their federal income tax liability nets out at zero.

Even with the additional $400 in refundability, however, 10 million children from working low-income families would receive only an additional $75 in benefit under the bill, according to the Center on Budget and Policy Priorities estimates.

6. Creates temporary credit for non-child dependents: The bill would allow parents to take a $500 credit for each non-child dependent whom they're supporting, such as a child 17 or older, an ailing elderly parent or an adult child with a disability.

7. Lowers cap on mortgage interest deduction: If you take out a new mortgage on a first or second home you would only be allowed to deduct the interest on debt up to $750,000, down from $1 million today. Homeowners who already have a mortgage would be unaffected by the change.

The bill would no longer allow a deduction for the interest on home equity loans. Currently that's allowed on loans up to $100,000.

Related: Republicans release final tax bill ahead of key vote

8. Curbs who's hit by AMT: Earlier bills called for the elimination of the Alternative Minimum Tax. The final version keeps it, but reduces the number of filers who would be hit by it by raising the income exemption levels to $70,300 for singles, up from $54,300 today; and to $109,400, up from $84,500, for married couples.

9. Preserves smaller but popular tax breaks: Earlier versions of the bill had proposed repealing the deductions for medical expenses, student loan interest and classroom supplies bought with a teacher's own money. They also would have repealed the tax-free status of tuition waivers for graduate students.

The final bill, however, preserves all of these as they are under the current code. And it actually expands the medical expense deduction for 2018 and 2019.

10. Exempts almost everybody from the estate tax: Unlike the House GOP bill, the final bill does not call for a repeal of the estate tax.

But it essentially eliminates it for all but the smallest number of people by doubling the amount of money exempt from the estate tax -- currently set at $5.49 million for individuals, and $10.98 million for married couples. Even at today's levels, only 0.2% of all estates ever end up being subject to the estate tax.

11. Slows inflation adjustments in tax code: The bill would use "chained CPI" to measure inflation, which is a slower measure than is used today. The net effect is your deductions, credits and exemptions will be worth less -- since the inflation adjusted dollars defining eligibility and maximum value would grow more slowly. It also would subject more of your income to higher rates in future years than would be the case under the current code.

12. Eliminates mandate to buy health insurance: There would no longer be a penalty for not buying insurance. While long a goal of Republicans to get rid of it, the measure also would help offset the cost of the tax bill. It is estimated to save money because it would reduce how much the federal government spends on insurance subsidies and Medicaid.

The Congressional Budget Office expects fewer consumers who qualify for subsidies will enroll on the Obamacare exchanges, and fewer people who are eligible for Medicaid will seek coverage and learn they can sign up for the program.

But policy experts also note that the mandate repeal could raise premiums because more healthy people might decide to skip buying insurance.

FOR BUSINESSES AND CORPORATIONS

13. Lowers tax burden on pass-through businesses: The tax burden on owners, partners and shareholders of S-corporations, LLCs and partnerships -- who pay their share of the business' taxes through their individual tax returns -- would be lowered by a 20% deduction, somewhat less than the 23% called for in the Senate-passed bill.

The 20% deduction would be prohibited for anyone in a service business -- unless their taxable income is less than $315,000 if married ($157,500 if single).

14. Includes rule to prevent abuse of pass-through tax break: If the owner or partner in a pass-through also draws a salary from the business, that money would be subject to ordinary income tax rates.

But to prevent people from recharacterizing their wage income as business profits to get the benefit of the pass-through deduction, the bill would place limits on how much income would qualify for the deduction.

Tax experts nevertheless have warned that this kind of anti-abuse measure still presents taxpayers with a lot of opportunities to game the system, and favors passive owners of a business over active owners who actually run things.

15. Slashes corporate rate: The bill cuts the corporate rate to 21% from 35%, starting next year. That's somewhat higher than the 20% called for earlier. The increase was made to free up some revenue to accommodate lawmaker demands on other provisions. The bill would also repeal the alternative minimum tax on corporations.

16. Change how U.S. multinationals are taxed: Today U.S. companies owe Uncle Sam tax on all their profits, regardless of where the income is earned. They're allowed to defer paying U.S. tax on their foreign profits until they bring the money home.

Many argue that this "worldwide" tax system puts American businesses at a disadvantage. That's because most foreign competitors come from countries with territorial tax systems, meaning they don't owe tax to their own governments on income they make offshore.

The final GOP bill proposes switching the U.S. to a territorial system. It also includes a number of anti-abuse provisions to prevent corporations with foreign profits from gaming the system.

In the meantime it would require companies to pay a one-time, low tax rate on their existing overseas profits -- 15.5% on cash assets and 8% on non-cash assets (e.g., equipment abroad in which profits were invested), slightly higher than the rates in the Senate- and House-passed bills.

http://money.cnn.com/2017/12/1...n-details/index.html

At least the Senate/final version dropped the attempt to repeal the Johnson Amendment.

Well, the "Big Beautiful Tax Cut" is a big fat kick in the nuts for me.

I expected the elimination of the SALT deduction to raise my taxes. I'm OK with that. It's fair.

OTOH: I'd like someone to explain to me how my dental practice with 8 employees is somehow different than a plumbing business of the same size. The plumber gets 20% tax free and I get nothing. Hmmmmmm......

The SALT wasn't totally eliminated.

It is capped at 10k.

quote:

Originally posted by chellim1:
Under a flat tax (10%)...
The guy who makes $1,000,000 would pay $100,000 in taxes.
The guy who makes $100,000 would pay $10,000 in taxes.
The guy who makes $1,000 would pay $100 in taxes.
The guy who makes $100 would pay $10 in taxes.

To those who say "That's not FAIR!" ....
I always say:

How about a "head-tax"?
We take the cost of government, divide by the number of people, and send everyone a bill?

It's the most fair, right?

THAT would be so awesome, but will never happen since the powers that be have been massaging the tax thing since the birth of Christ!

The government will never do any real tax reform, just like they will never repeal O-care.

Quite simply those two things give them a great amout of power over the populace and they will never give that up.

Congress does not do what is good for the country, congress does what is good for congress.

quote:

I'd like someone to explain to me how my dental practice with 8 employees is somehow different than a plumbing business of the same size. The plumber gets 20% tax free and I get nothing. Hmmmmmm......

I don't know of any provision that would treat a dental practice different than a plumbing business of the same size. Could you be more specific? Code section?

Do you take a salary?

If the owner or partner in a pass-through also draws a salary from the business, that money would be subject to ordinary income tax rates.

You should probably talk to your accountant, and find the right balance between salary and business income for your situation.