Tax Bill

[HOF44]

 

 

2 hours ago, bearrock said:

 

The SALT part is not an attack on middle class.  That's an attack on upper middle and rich in high state tax and expensive property states (which coincidentally happens to be blue states).

 

It’s actually an “attack” on the upper middle class. If you make over about 300K you will save enough by the lowering of the brackets to make up for the loss of SALT. If you make between roughly 60-250k depending on household size this thing is pretty much hosing you.  I usually vote, but I’m motivated now.  

[tshile]

2 hours ago, bearrock said:

If you aren't getting child tax credit at all, that places your income at 120k plus at least.  It depends on the region, but I'm not sure how many would consider your situation to be middle class.

It starts phasing out at that for a household income.

 

In an area where a nice house costs 500k minimum, and basic helpdesk computer jobs will pay around 100k if you can do gov't work.  Cost of living matters. Majority of our financial strength comes from spending wisely, not just because we have higher incomes. I'm just outside of DC and NOVA. My County is one of the top 15 richest in the country. High cost of living here.

 

But to be clear, I'm not asking for sympathy just pointing out how the same group who tells me how I can afford things is complaining about tax increases that would affect people who make significantly more than me.

Edited November 3, 2017 by tshile

[tshile]

1 hour ago, steve09ru said:

Have they actually defined the classes?  I feel like tshile and that it keeps shifting.  What is thresholds for low income, middle, upper middle, rich?

Yes there are definitions, a few of them. The Department of labor has some.

 

The most common I see used is:

My position is middle class and people who make more are the rich.

 

 

[HOF44]

2 minutes ago, tshile said:

Yes there are definitions, a few of them. The Department of labor has some.

 

The most common I see used is:

My position is middle class and people who make more are the rich.

 

 

It needs to be indexed by region.  I’m sure in some places I’d be considered rich.  In the DC suburbs I’m just in the upper part of middle class. 

[tshile]

1 hour ago, Springfield said:

I do also question why we need to lower corporate taxes to spur economic growth on an already booming economy, which has been booming for th last 7ish years.

Consensus seems to be our corporate taxes are too high compared to the rest of the world.

 

There definite is trillions of dollars sitting over seas waiting for a tax holiday, which (shocker) is included in this bill. The cynical view is (keeping in mind we've done tax holidays before...):  they horde money until the next tax holiday so they can bring money back at 10% or 5%, instead of paying 35%

 

Problem is all it does is encourage them to hold off. Better to lower it, never do a holiday again, and keep them from keeping the money still overseas.

 

There will absolutely be a huge boom to the economy and stock market (I know, not related) if they do this. The real question is long term effects.

 

Bottom line is we need them to stop stashing money overseas...

 

As for our booming economy - the numbers are good but under employment, stale wages, % of the money supply in the hands of the not rich, etc... all can be improved. Improving the economy should help.

 

But.. We know how that goes so...

 

 

2 minutes ago, HOF44 said:

It needs to be indexed by region.  I’m sure in some places I’d be considered rich.  In the DC suburbs I’m just in the upper part of middle class. 

Yup. Taxes should somehow be indexed by cost of living.

 

It's unfair people who make 200k as a household are excluded from benefits like child credits, education plans, and everything else because they "can afford it" when purchasing a house so you only have to drive an hour to work means finding out how to borrow 1 million for a single family home on 1/3 of an acre with 2 major highways withing a mile in either direction.

 

That's not me, but I know some.

 

[tshile]

Npr article talking about the middle class using pew's definition

 

Quote

"Middle-income" households have an annual income between 66 percent and 200 percent of the median U.S. household income, according to the Pew Research Center. As of 2014, that falls between $24,000 and $73,000 for one person and $42,000 and $126,000 for a family of three.

 

 

Investopedia has a different take

http://www.investopedia.com/financial-edge/0912/which-income-class-are-you.aspx?adtest=mobile-lazy-load-0

 

Basically the "upper class" starts at almost 400k/year in household income

 

If you go to the academic models section on this Wikipedia page you can see more breakdowns

https://en.m.wikipedia.org/wiki/Social_class_in_the_United_States

 

 

 

[Larry]

48 minutes ago, tshile said:

Yes there are definitions, a few of them. The Department of labor has some.

 

The most common I see used is:

My position is middle class and people who make more are the rich.

 

 

 

I thought it was "I make about the same as my neighbors". 

[bearrock]

1 hour ago, tshile said:

Consensus seems to be our corporate taxes are too high compared to the rest of the world.

 

There definite is trillions of dollars sitting over seas waiting for a tax holiday, which (shocker) is included in this bill. The cynical view is (keeping in mind we've done tax holidays before...):  they horde money until the next tax holiday so they can bring money back at 10% or 5%, instead of paying 35%

 

Problem is all it does is encourage them to hold off. Better to lower it, never do a holiday again, and keep them from keeping the money still overseas.

 

There will absolutely be a huge boom to the economy and stock market (I know, not related) if they do this. The real question is long term effects.

 

Bottom line is we need them to stop stashing money overseas...

 

 

I don't know if there is a consensus on the corporate tax rate being too high outside the GOP circles.  http://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world

 

Effective rate is definitely on the high end of the world, but how much lower do we want it to go?  Will lowering the effective rate to China level of 10% spur economic growth or will it pad the profit margin of corporations?  Other measures like corporate tax revenue compared to percentage of GDP is actually below OECD average.

 

As for repatriation of money from overseas, there was no evidence to suggest that it was some huge boon to the economy the last time US tried it.  https://www.cnbc.com/2017/04/26/what-happened-the-last-time-companies-got-a-break-on-overseas-profits.html

 

If we want corporations to stop hoarding money overseas, a much simpler fix than the repeated tax holiday would be to simply close the subsidiary loop hole.

 

 

[tshile]

19 minutes ago, bearrock said:

 

I don't know if there is a consensus on the corporate tax rate being too high outside the GOP circles. 

Pretty much every economist I read says it's too high, and I don't read stuff from gop economists because they have a terrible track record.

 

Where they differ is that they want personal income tax raised for the wealthy, loopholes closed, and there's differences in the rate.

 

When they talk about loopholes they speak of things people with 8 figure+ net work have access to.

 

Gop talks about 401k, state/local tax, and child care.

 

The gop is rather embarrassing when it comes to economics. 

 

Also, I do not like the tax holiday stuff. I think it's bs. But there will be a benefit to bringing the money back here - I'm not one to argue how much of a benefit and to whom.

 

Edited November 3, 2017 by tshile

[No Excuses]

Barely anyone in this country likes the GOP's economic agenda. The GOP has been winning by instigating culture wars. They have minuscule public backing for their economic agenda. Almost all of their proposals poll terribly. 

 

If one trusts public polling, we are more center-left on economic policy.

[Going Commando]

4 hours ago, No Excuses said:

Barely anyone in this country likes the GOP's economic agenda. The GOP has been winning by instigating culture wars. They have minuscule public backing for their economic agenda. Almost all of their proposals poll terribly. 

 

If one trusts public polling, we are more center-left on economic policy.

 

You're probably right, because the public has stopped trusting that GoP tax cuts will benefit them.  But there are still a ton of politically vocal people out there who are Chicago School true believers.  And not just rich people.  Of course, that could be because, as you said, GoP messaging on culture wars has already gotten them to buy into the party's messaging as a whole.

[LD0506]

[Corcaigh]

CNN has finally admitted to giving up  journalism and is officially just trolling now:

 

The headline on their home page about the tax reform bill is: DC swamp creatures lie in wait for Trump's tax bill

[Bozo the kKklown]

The return of feudalism

[MartinC]

12 hours ago, tshile said:

Npr article talking about the middle class using pew's definition

 

 

 

Investopedia has a different take

http://www.investopedia.com/financial-edge/0912/which-income-class-are-you.aspx?adtest=mobile-lazy-load-0

 

Basically the "upper class" starts at almost 400k/year in household income

 

If you go to the academic models section on this Wikipedia page you can see more breakdowns

https://en.m.wikipedia.org/wiki/Social_class_in_the_United_States

 

 

 

 

Interesting. Apparently I'm wealthy. Good to know.

 

They clearly have never met my wife.

[haithman]

2 hours ago, Corcaigh said:

CNN has finally admitted to giving up  journalism and is officially just trolling now:

 

The headline on their home page about the tax reform bill is: DC swamp creatures lie in wait for Trump's tax bill

 

Thought the same when I saw that this morning. Not the type of headline that lends itself to credibility (Fox-esque headline).

[MartinC]

11 hours ago, bearrock said:

 

I don't know if there is a consensus on the corporate tax rate being too high outside the GOP circles.  http://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world

 

Effective rate is definitely on the high end of the world, but how much lower do we want it to go?  Will lowering the effective rate to China level of 10% spur economic growth or will it pad the profit margin of corporations?  Other measures like corporate tax revenue compared to percentage of GDP is actually below OECD average.

 

As for repatriation of money from overseas, there was no evidence to suggest that it was some huge boon to the economy the last time US tried it.  https://www.cnbc.com/2017/04/26/what-happened-the-last-time-companies-got-a-break-on-overseas-profits.html

 

If we want corporations to stop hoarding money overseas, a much simpler fix than the repeated tax holiday would be to simply close the subsidiary loop hole.

 

 

 

Here is the central problem. Strange as it may seem there is no observable link between corporate tax rates and profits nor is there any observable correlation between corporate tax rate and GDP rates.

 

There is however a psychological impact and higher investment levels are shown to result. Why this investment does not then lead to higher GDP is something of a mystery. Complicated stuff - probably not something that can be addressed by a group of people throwing **** against a wall to get to a number.

 

It will probably keep the stock markets high which is good for your 401K and other investments and give Trump something to tweet about I suppose.

 

https://blogs.cfainstitute.org/investor/2017/04/04/corporate-taxes-matter-but-not-in-the-way-you-think/

[Jumbo]

ty lsf and sacks

 

i will continue to invest in stereo gear, weed, and road trips up and down hwy 101

[tshile]

cnn has been a clown show for a while

[Corcaigh]

1 hour ago, MartinC said:

 

Interesting. Apparently I'm wealthy. Good to know.

 

They clearly have never met my wife.

 

There's income and then there's expenses.

 

For some people the expenses always keep pace with rising income.

[Fergasun]

Was able to read through the JCT a bit more and digest:

- Clearly this doesn't benefit taxpayers in high-cost blue states.  Loss of deductions is huge and I've already attacked the logic behind SALT (WaPo had a great graphic showing this benefit is used by Clinton voting blue states in higher proportion to Trump voting red states).  Blue states actually fund and think government provides valuable service to society... when the GOP talks about "states rights", etc. nothing hurts that than screwing with taxpayers in those states.

 

- Average SFH in my area is over $500k -- in addition to the mortgage interest cap there is also a change to the sale of principle resident rules.  Used to be 2 of 5 years for the SFH sale exclusion, now it is a 5 of 8 year rule.  This was an interesting little change and might target home-flippers and housing prices.

 

- Simplifying tax brackets doesn't really appeal to me too much -- I don't care if you can do your taxes on a post-card paper. 

 

- They use the chained CPI index rather than straight CPI (GOP loves chained CPI because it is lower). 

 

- No talk of how this would effect state taxes, but I would imagine you would see an increase in both Federal and state because of reducing deductions.  So this is a double whammy to blue state taxpayers (who wouldn't be able to deduct the higher state taxes). 

 

- Seems like there is some reform of taxes on corporate compensation like stock options -- unsure what that means. 

 

Changes that I would like to see:  

- 15 % tax cut for corporations is too high.  Split the difference or maybe a 5-8% cut. Take the savings and roll it straight into the deficit.

- Don't monkey around with the blue-state vs. red state SALT.  Allow state/local/property taxes all to be deductible up to $10k (or perhaps a higher cap like $15k).  Don't treat one type of state/local tax differently....  (because you are the chair of a House committee and your state has no income tax).

- Don't repeal the estate tax.  I understand the impact is negligible, but the optics are horrible.

 

Perhaps with some of those adjustments to make it more fair to blue-state taxpayers (note -- it would not affect the red state tax cuts), lower the corporate tax rate cut -- it could be an acceptable bill. 

 

Don't know when the Senate introduces their bill. 

 

*Edit to add: It is still cynical as heck for me to see them do tax cuts prior to budget reform.  If your agenda is power/elections, sure -- give tax cuts to your donors.  If your agenda is GOP governance that people like to hear about - push for the same type of Grand Bargain that Boehner-Obama were going for.  Pretty obvious that Trump doesn't believe in spending cuts, government debt reform, but the GOP deficit hawks are looking like and should look like hyopcrites over this. 

 

 

 

Edited November 3, 2017 by Fergasun
Cynical Point at end

[PeterMP]

1 hour ago, MartinC said:

 

Here is the central problem. Strange as it may seem there is no observable link between corporate tax rates and profits nor is there any observable correlation between corporate tax rate and GDP rates.

 

There is however a psychological impact and higher investment levels are shown to result. Why this investment does not then lead to higher GDP is something of a mystery. Complicated stuff - probably not something that can be addressed by a group of people throwing **** against a wall to get to a number.

 

It will probably keep the stock markets high which is good for your 401K and other investments and give Trump something to tweet about I suppose.

 

https://blogs.cfainstitute.org/investor/2017/04/04/corporate-taxes-matter-but-not-in-the-way-you-think/

 

In terms of an over all possible impact on the economy that tax cuts to corporations are going to cause economic growth (even ignoring the effect on the deficit and what that means with respect to ease of access to capital) requires an inherent assumption is that corporations are some how more efficient with respect to the whole economy in spending the money then the federal government.

 

I'm not sure there is any actual evidence supporting that.

[MartinC]

1 hour ago, PeterMP said:

I'm not sure there is any actual evidence supporting that.

 

The conclusion of lots and lots of research on this question is there isn't.

[bearrock]

4 hours ago, MartinC said:

 

Here is the central problem. Strange as it may seem there is no observable link between corporate tax rates and profits nor is there any observable correlation between corporate tax rate and GDP rates.

 

There is however a psychological impact and higher investment levels are shown to result. Why this investment does not then lead to higher GDP is something of a mystery. Complicated stuff - probably not something that can be addressed by a group of people throwing **** against a wall to get to a number.

 

It will probably keep the stock markets high which is good for your 401K and other investments and give Trump something to tweet about I suppose.

 

https://blogs.cfainstitute.org/investor/2017/04/04/corporate-taxes-matter-but-not-in-the-way-you-think/

 

But that article itself says that lower corp rate only boosts the stock market for year or two at best.  So we're supposed to slash the rates by 15%, not for the reasons that are touted by the proponents, but for another reason that only lasts for a year or two?  How about we try giving that same amount back to the consumers and see if that spurs spending, which I would assume would also result in stock market growth based on actual increase in economic activity, not just based on Capex expectations.

[The Evil Genius]