Trump tax reform! Latest CBO update shows increase in deficit projections of 1T (1 Viewer)

[fantasycurse42]

How hard will it be to overturn or rewrite these tax cuts? 

If the Dems are smart, they'll lobby on flipping those massive cuts from the corporations to the individuals and passing them back to the corporations. 

They can sell it like Trump to the corporations; these cuts will be huge for consumers, so even though your taxes will go back up, the consumers will have so much more money, your net will still be positive with all that consumer spending. 

 

[bigbottom]

That’s from the AEI...so it’ll be much worse than what they are showing.

A related point made by the presenter is that the bottom 91% tend to donate to different types of charities than the top 9%. As such, by effectively eliminating the charitable deduction for 21 million Americans, while preserving the deduction only for the highest 9% of taxpayers, there are likely to be types of charities that are disproportionally affected by tax reform. 

Edit:  I suspect metropolitan symphonies will be okay. 

 

[bigbottom]

Isn't the conservative position against social programs that the private sector does a better job through charitable contributions? I guess that was all bs too just like trickle down economics, protecting us from voter fraud, the stupid wall protecting us from crime and drugs and on and on. I can't think of a single conservative position I sympathize with anymore. It's the party of fraud. 

Honestly, I don’t think they thought it through. Surely, hurting charities could not have been an intended consequence of GOP tax reform.

 

[Dedfin]

Honestly, I don’t think they thought it through. Surely, hurting charities could not have been an intended consequence of GOP tax reform.

Consider the other downright malicious things the Rs have done.

 

[fantasycurse42]

I can't think of a single conservative position I sympathize with anymore. It's the party of fraud. 

The GOP is supposed to be fiscally responsible, that is something that I've always identified with. 

This administration is the most fiscally irresponsible to ever take office and it makes me ####### sick. Most people don't understand the problems being created by running sustained trillion dollar deficits during expansions - you don't blow up the deficit when the economy is supposed to be good, wtf? 

 

[jonessed]

How hard will it be to overturn or rewrite these tax cuts? 

If the Dems are smart, they'll lobby on flipping those massive cuts from the corporations to the individuals and passing them back to the corporations. 

They can sell it like Trump to the corporations; these cuts will be huge for consumers, so even though your taxes will go back up, the consumers will have so much more money, your net will still be positive with all that consumer spending. 

Extremely hard.  They will likely get chipped at over time though.

 

[fantasycurse42]

Extremely hard.  They will likely get chipped at over time though.

What do they need, the House, Senate, & WH?

 

[jonessed]

What do they need, the House, Senate, & WH?

Yes.  And pass the new bill under budget reconciliation rules.

 

[ffldrew]

A related point made by the presenter is that the bottom 91% tend to donate to different types of charities than the top 9%

Like the Trump Foundation?

 

[fantasycurse42]

Yes.  And pass the new bill under budget reconciliation rules.

Pretty sure this wouldn't be hard considering how they pushed the last one through and this would actually increase revenue, and not in the same way the current tax bill will over the next decade with sustained GDP over 12 gazillion percent, rainbow unicorns ####ting diamonds, and some other interesting magic they included. 

 

[jonessed]

Pretty sure this wouldn't be hard considering how they pushed the last one through and this would actually increase revenue, and not in the same way the current tax bill will over the next decade with sustained GDP over 12 gazillion percent, rainbow unicorns ####ting diamonds, and some other interesting magic they included. 

These things are hard to undo because people like to keep their goodies.  If Democrats get full control they can increase corporate taxes, but the deficit impact would be minimal and there is going to be a massive lobbying effort to water it down.  Obamacare had a Democratic supermajority and ended up so watered down it could hardly stand.

 

[fantasycurse42]

These things are hard to undo because people like to keep their goodies.  If Democrats get full control they can increase corporate taxes, but the deficit impact would be minimal and there is going to be a massive lobbying effort to water it down.  Obamacare had a Democratic supermajority and ended up so watered down it could hardly stand.

We’re in different times, getting messages out is much easier.

If you can’t sell “less taxes for consumers, more for corporations,” you need to hire some different salespeople. That product sells itself.

 

[jomar]

The GOP is supposed to be fiscally responsible, that is something that I've always identified with. 

This administration is the most fiscally irresponsible to ever take office and it makes me ####### sick. Most people don't understand the problems being created by running sustained trillion dollar deficits during expansions - you don't blow up the deficit when the economy is supposed to be good, wtf? 

this was an important area I agreed with back when I was a Republican but looking back, I can't find a time in my lifetime where they weren't running bigger deficits than Democrats.  it was a slogan to get votes but never put into practice.  same thing with pretty much every area I had previously sided with Republicans, it was all a sham to get votes and I fell into the trap.  

the only areas conservatives have stayed consistent and practiced what they preached was on social issues, which I have always found deplorable.  so they won't get a vote for me for quite some time, if ever again

 

[The Commish]

Most of the individual tax cuts that were part of this travesty expire in 2025.

 

[The Commish]

Summary here:

https://taxfoundation.org/look-ahead-expiring-tax-provisions/

 

[Jobber]

this was an important area I agreed with back when I was a Republican but looking back, I can't find a time in my lifetime where they weren't running bigger deficits than Democrats.  it was a slogan to get votes but never put into practice.  same thing with pretty much every area I had previously sided with Republicans, it was all a sham to get votes and I fell into the trap.  

the only areas conservatives have stayed consistent and practiced what they preached was on social issues, which I have always found deplorable.  so they won't get a vote for me for quite some time, if ever again

Thank you for eloquently stating my EXACT experience as a former several decade long Republican. 

 

[BobbyLayne]

wrong place sorry lol

 

[Da Guru]

Bernie Sanders‏Verified account @SenSanders

It is particularly obscene for Trump to repeal the estate tax which would provide a $269 billion tax break to the top 0.2%.

Like Patrick Ewing said "We top 0.2% make a lot of money..but we spend a lot of money too"

So a little will trickle down to us peasants.

 

[msommer]

Like Patrick Ewing said "We top 0.2% make a lot of money..but we spend a lot of money too"

So a little will trickle down to us peasants.

Yeah, but they tend to not solely buy American. Buy a Ferrari, a couple of diamond studded Jäger-Leocultres, nice villa in Cannes, yatch in the Carib...

 

[The Commish]

Seems that the new standard for "good for the middle class" is simply removing the burden of itemizing and being able to just take the standard deduction.  It doesn't matter that in a lot of cases, the refund isn't going to be far less because of other things taken away.  Their standard now is that it's good because more people can use the standard deduction over itemize.  

 

[Don't Noonan]

Seems that the new standard for "good for the middle class" is simply removing the burden of itemizing and being able to just take the standard deduction.  It doesn't matter that in a lot of cases, the refund isn't going to be far less because of other things taken away.  Their standard now is that it's good because more people can use the standard deduction over itemize.  

. Link?  I have heard nobody say anything of the sort.

 

[The Commish]

. Link?  I have heard nobody say anything of the sort.

Check your spam folder....it might be in there.

 

[Hilts]

Business Insider: Trump said tax cuts would be 'rocket fuel' for the US economy. Here's why they weren't.

 

[dkp993]

On first blush this “tax cut” is going to cost me $7500.  So glad I could help those at the top who so clearly needed the tax cut.   FML.  

 

[Sheriff Bart]

From the Trump friendly WSJ

Expecting a Big Tax Refund? Don’t Be So Sure

Many households already have received the bulk of their tax cuts. That is because the IRS changed the default rules for calculating how much is withheld from paychecks for taxes. Those changes took effect in February, though some taxpayers manually adjusted their withholding with their 2019 refunds in mind.

We worry very much that there will be a perception that ‘My refund went down, I’m in a worse economic position,’” said Mark Steber, chief tax officer at Jackson Hewitt Tax Service Inc., which prepared two million returns last year. “When, in fact, the reality could be the opposite.”

The results of tax-refund season may ripple into consumer spending with surprises showing up in retail sales as taxpayers cut back if they get less than expected or spend windfalls.

At the same time, the IRS says it expects more people than usual to owe taxes and penalties, including from people who usually get refunds. Those most at risk of underwithholding are people who used to itemize deductions but now don’t, households with two wage earners and people with complex situations, according to the IRS.

I didn't read this literally anywhere but in this thread:

The government urged taxpayers to adjust their withholding to get close to the refund they want or make sure they were paying enough over the year. But it isn’t clear how many people did that.

“People don’t understand this,” said Kathy Pickering, executive director of the Tax Institute at H&R Block Inc., which prepared 20 million U.S. tax returns last year. “People generally think they’re going to get the same refund as they did in the prior year.”

Trump supporters might not care about the lies and all of the crimes but I expect a tsunami of anger from them in the coming months.  They are soon going to realize that it isn't just the libs that have been getting pwned. 

 

[tommyGunZ]

Just did my family’s taxes last night - the SALT deduction cap ended up being around a negative $4k swing.  In fairness, as Bart’s article above notes we benefited all year from slightly increased take home pay, but my wife certainly didn’t see it that way when she saw that we owe this year as opposed to normally getting a few thousand in refund.  I suspect a ton of families in coastal urban areas will be in for the same surprise.  

 

[Sheriff Bart]

Just did my family’s taxes last night - the SALT deduction cap ended up being around a negative $4k swing.  In fairness, as Bart’s article above notes we benefited all year from slightly increased take home pay, but my wife certainly didn’t see it that way when she saw that we owe this year as opposed to normally getting a few thousand in refund.  I suspect a ton of families in coastal urban areas will be in for the same surprise.  

I would wager almost nobody noticed unless it changed from say $1950 a pay period to $2000 a pay period. Even then most of those people probably never understood why it changed. 

 

[James Daulton]

Just did my family’s taxes last night - the SALT deduction cap ended up being around a negative $4k swing.  In fairness, as Bart’s article above notes we benefited all year from slightly increased take home pay, but my wife certainly didn’t see it that way when she saw that we owe this year as opposed to normally getting a few thousand in refund.  I suspect a ton of families in coastal urban areas will be in for the same surprise.  

Trump supporters will likely cheer this news.  That's what you get for living in Comifornia!

 

[tommyGunZ]

Trump supporters will likely cheer this news.  That's what you get for living in Comifornia!

Yeah - I'll clarify that I'm extremely fortunate and this won't affect our family and certainly it's our choice to live in a high tax state, for better or for worse! 

 

[The Commish]

I expect a tsunami of anger from them in the coming months. 

Don't hold your breath...you'll certainly pass out.

 

[stlrams]

Yeah - I'll clarify that I'm extremely fortunate and this won't affect our family and certainly it's our choice to live in a high tax state, for better or for worse! 

Wasn’t that the intent of tax change, punish states with high taxes that effectively lowers federal tax.  Low tax states pay more vs states with high tax states..

 

[tommyGunZ]

Wasn’t that the intent of tax change, punish states with high taxes that effectively lowers federal tax.  Low tax states pay more vs states with high tax states..

That’s one way to look at it. Another way is that we’re being punished for providing better/more services for our citizens.  Which was probably some of the intent from the Republican Congress.  

 

[stlrams]

That’s one way to look at it. Another way is that we’re being punished for providing better/more services for our citizens.  Which was probably some of the intent from the Republican Congress.  

Or maybe some states are more efficient at controlling costs.. Personally I’m from a state that caters to unions so we just keep providing benefits that we can’t continue to pay for.. 

 

[Ignoramus]

I am attending a non-profit sector conference and the first session of the day covers the impact of the tax reform bill.  This was a very scary slide in the deck:

- Charities estimated to lose $17.2 billion in donations in 2018 alone per American Enterprise Institute estimate

- 21 million taxpayers will lose ability to claim a deduction

- Charitable deduction now limited to top 9% of taxpayers

- Most of loss  attributable to combined effect of doubled standard deduction, $10,000 state and local tax cap, reduced mortgage interest deduction

- Some of the loss also due to increased estate tax exemption

The presenter noted that the longevity of the charitable deduction is in peril as it is now an incentive for high-income donors only, noting that broadly applicable deductions have a larger constituency, while narrowly applicable deductions are more at risk for elimination.

This is why you can’t rush through tax policy without truly thinking through all the consequences.

Yes, but did they talk about all the additional Costco memberships people will eventually be able to afford one day?

 

[Sheriff Bart]

...you'll certainly pass out.

Finally, something I'm good at.

 

[The Commish]

So far, it looks like the 20% tax break isn't all it's been cracked up to be or it may be fairer to say it's a mixed bag.  Yes, it's great for those who qualify, but caveats abound beyond what was "sold" to us on how it would work.  Taxable income has to be under $157,500 if single or $315,000 if married filing jointly.  Everyone under that threshold gets the 20% regardless of their business.  If you're above that, the type of business matters. You can have two people doing the same work for the same pay, but because of other factors be treated differently under the law.  I've seen it three times now. One case had two partners in the same business.  One qualified, the other didn't so neither got the benefit   

Generally speaking, it's relatively simple.  You get either 20% credit on business income or 20% credit on taxable income (minus capital gains...of course) whichever is lower.  It's always in the caveats and exceptions to the rule where it gets fuzzy.  Most of the time you can sort of tell where they're trying to go and what they are trying to achieve, but so far, I am at a loss on why a lot of these caveats exist.  I'm not exactly sure what they are trying to achieve.  It seems like they are trying to set up a progressive tax structure within the rule, but it's an incredibly convoluted way to approach this...so much for "simplifying the tax code".  I still haven't figured out the motive for making they type of business a condition for qualification.

 

[Banger]

John Harwood‏Verified account @JohnJHarwood

Trump/GOP said tax-cuts would pay for themselves by lifting growth to 3% level Obama couldn't reach CBO projections today: --2019-2023 deficits $1-trillion higher than forecast in 1/17 as Trump took office --2024-29 growth of 1.8%, down from 1.9% for 2021-27 forecast in 1/17

7:41 AM - 28 Jan 2019

 

[The Commish]

John Harwood‏Verified account @JohnJHarwood

Trump/GOP said tax-cuts would pay for themselves by lifting growth to 3% level Obama couldn't reach CBO projections today: --2019-2023 deficits $1-trillion higher than forecast in 1/17 as Trump took office --2024-29 growth of 1.8%, down from 1.9% for 2021-27 forecast in 1/17

7:41 AM - 28 Jan 2019

The administration actually said that GDP at 3% growth would help pay for them.  We all knew that the $1.5T added to the debt would be best case scenario and likely be much more than that because giveaways like this to the rich and large companies never works.  I'm finding fewer and fewer "fiscally conservative" trump supporters these days.  

 

[Banger]

 "fiscally conservative" trump supporters  

is an oxymoron...

 

[Dedfin]

John Harwood‏Verified account @JohnJHarwood

Trump/GOP said tax-cuts would pay for themselves by lifting growth to 3% level Obama couldn't reach CBO projections today: --2019-2023 deficits $1-trillion higher than forecast in 1/17 as Trump took office --2024-29 growth of 1.8%, down from 1.9% for 2021-27 forecast in 1/17

7:41 AM - 28 Jan 2019

Which economics genius here criticized Obama for the GDP growth% and said this cut would do so much better?

 

[Gr00vus]

Just did my family’s taxes last night - the SALT deduction cap ended up being around a negative $4k swing.  In fairness, as Bart’s article above notes we benefited all year from slightly increased take home pay, but my wife certainly didn’t see it that way when she saw that we owe this year as opposed to normally getting a few thousand in refund.  I suspect a ton of families in coastal urban areas will be in for the same surprise.  

I imagine we'll be in the same boat. I've been tempering expectations (and planning accordingly) since the tax law changes passed. Haven't gotten to do the taxes yet though. But it won't be a surprise to see a less rosy outcome than previous years when I do.

 

[dkp993]

Just did my family’s taxes last night - the SALT deduction cap ended up being around a negative $4k swing.  In fairness, as Bart’s article above notes we benefited all year from slightly increased take home pay, but my wife certainly didn’t see it that way when she saw that we owe this year as opposed to normally getting a few thousand in refund.  I suspect a ton of families in coastal urban areas will be in for the same surprise.  

Yep. SALT change is the reason for the $7500 swing for me too.  Granted I didn’t factor in the $50 more a month in take home so the swing is just under $7k but still huge.  Sucks.  

 

[Hilts]

From the Trump friendly WSJ

Expecting a Big Tax Refund? Don’t Be So Sure

I didn't read this literally anywhere but in this thread:

Trump supporters might not care about the lies and all of the crimes but I expect a tsunami of anger from them in the coming months.  They are soon going to realize that it isn't just the libs that have been getting pwned. 

I fear they're going to say this only happened after the Democrats came into power with the blue wave. No, it doesn't make any sense. But the timing in crazy town works for a good bold faced lie. 

 

[The Commish]

Which economics genius here criticized Obama for the GDP growth% and said this cut would do so much better?

There were several.  They were sprinkled in with the "woot....I gots minez!!!!!!#@ so this be goodz!!@!#!#" types.

 

[Banger]

#TRUMPREALITY

Donald J. Trump‏Verified account @realDonaldTrump

Tariffs on the “dumping” of Steel in the United States have totally revived our Steel Industry. New and expanded plants are happening all over the U.S. We have not only saved this important industry, but created many jobs. Also, billions paid to our treasury. A BIG WIN FOR U.S.

5:16 AM - 28 Jan 2019

Jake Tapper Retweeted Donald J. Trump

CFR, Jan 18: “...since Trump announced steel tariffs on March 1, 2018, steel-producer stock prices have plummeted 22 percent—while the S&P 500 index has fallen only three percent.” https://www.cfr.org/blog/trumps-tariffs-are-killing-american-steel …

 

[Shula-holic]

So far, it looks like the 20% tax break isn't all it's been cracked up to be or it may be fairer to say it's a mixed bag.  Yes, it's great for those who qualify, but caveats abound beyond what was "sold" to us on how it would work.  Taxable income has to be under $157,500 if single or $315,000 if married filing jointly.  Everyone under that threshold gets the 20% regardless of their business.  If you're above that, the type of business matters. You can have two people doing the same work for the same pay, but because of other factors be treated differently under the law.  I've seen it three times now. One case had two partners in the same business.  One qualified, the other didn't so neither got the benefit   

Generally speaking, it's relatively simple.  You get either 20% credit on business income or 20% credit on taxable income (minus capital gains...of course) whichever is lower.  It's always in the caveats and exceptions to the rule where it gets fuzzy.  Most of the time you can sort of tell where they're trying to go and what they are trying to achieve, but so far, I am at a loss on why a lot of these caveats exist.  I'm not exactly sure what they are trying to achieve.  It seems like they are trying to set up a progressive tax structure within the rule, but it's an incredibly convoluted way to approach this...so much for "simplifying the tax code".  I still haven't figured out the motive for making they type of business a condition for qualification.

We appear to have qualified. Made it where it was advantageous for me to up my salary component even paying more SS. Also made it very apparent we benefit by employing people more hours. We were going to be strangled off by the wage limitations. 

 

[Hilts]

Why Trump's $1.5 Trillion Tax Cut Hasn’t Sparked Hiring or Investment

 

[Steve Tasker]

How hard will it be to overturn or rewrite these tax cuts? 

If the Dems are smart, they'll lobby on flipping those massive cuts from the corporations to the individuals and passing them back to the corporations. 

They can sell it like Trump to the corporations; these cuts will be huge for consumers, so even though your taxes will go back up, the consumers will have so much more money, your net will still be positive with all that consumer spending. 

In all seriousness, it was the biggest overhaul of the tax code since 1986.  It has caused fundamental changes to much of the tax system that are not necessarily easy to undo.  That's not to say it can't be undone, but it would likely require another full-scale overhaul.  They say the 1986 tax reform took about 13 months to fully come to fruition, start-to-finish.

 

[Steve Tasker]

So far, it looks like the 20% tax break isn't all it's been cracked up to be or it may be fairer to say it's a mixed bag.  Yes, it's great for those who qualify, but caveats abound beyond what was "sold" to us on how it would work.  Taxable income has to be under $157,500 if single or $315,000 if married filing jointly.  Everyone under that threshold gets the 20% regardless of their business.  If you're above that, the type of business matters. You can have two people doing the same work for the same pay, but because of other factors be treated differently under the law.  I've seen it three times now. One case had two partners in the same business.  One qualified, the other didn't so neither got the benefit   

Generally speaking, it's relatively simple.  You get either 20% credit on business income or 20% credit on taxable income (minus capital gains...of course) whichever is lower.  It's always in the caveats and exceptions to the rule where it gets fuzzy.  Most of the time you can sort of tell where they're trying to go and what they are trying to achieve, but so far, I am at a loss on why a lot of these caveats exist.  I'm not exactly sure what they are trying to achieve.  It seems like they are trying to set up a progressive tax structure within the rule, but it's an incredibly convoluted way to approach this...so much for "simplifying the tax code".  I still haven't figured out the motive for making they type of business a condition for qualification.

Generally, the idea was to not #### over small business owners.  The tax reform dropping the max corporate rate 14% means that it would have been much better off for people to be in a C-Corp structure rather than an S / partnership / sole proprietorship.  There would have been a massive freakout, tons of businesses converting into C-Corps, and a PR nightmare.  So to theoretically equalize the benefits for the major C-Corps with the pass-through small businesses, they passed the QBI rules you're referring to.

How they arrived at the income thresholds and the definitions of specified services, I'm not really entirely sure.  Clearly the specified service rules serve to limit deductions for what are essentially personal service businesses.  

 

[ericttspikes]

"they'll pay for themselves"

How many more times can the GOP con people on tax cuts?