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***Official Tax Reform Thread*** If it is good for Trump, it is good for America! (1 Viewer)

fantasycurse42

fantasycurse42

Footballguy Jr.
Specifically - Trump states "we are looking at the biggest reform ever," how is that possible? 

What I'm trying to understand is how it could be done, while spending buckets on infrastructure, increasing military spending, no agreement at all on Border Adjustment Tax, without sending our deficit through the roof? 

Please don't tell me 1+1 still equals 1, I need to see some real numbers.

 
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Simplify tax code, get rid of the rich peoples tax breaks (good example is tax rate on distributions being significantly less than income tax which middle class is forced to pay),  reduce the size of government so that we don't need to pay so much tax, revamp Medicare so we don't bankrupt the country, balance the budget then institute an aggressive repayment plan of existing debt so we stop paying interest.  Really should be easy right?  I am going to have a beer because I just stressed myself out.

 
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sbonomo said:
Simplify tax code, get rid of the rich peoples tax breaks (good example is tax rate on distributions being significantly less than income tax which middle class is forced to pay),  reduce the size of government so that we don't need to pay so much tax, revamp Medicare so we don't bankrupt the country, balance the budget with an aggressive repayment plan so we stop paying interest.  Really should be easy right?  I am going to have a beer because I just stressed myself out.
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How much of this will be in his plan? You think he'll get rid of billionaire tax breaks?

 
fantasycurse42 said:
So there are no real answers... I'm pretty excited to see this plan.
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The plan will be YUUUUGE. A YUUUUUGE Plan. Just wait. The biggest plan yet. It's a plan, comprised of smaller plans. Inside those plans are plans that are YUGE in their own right. But when packed inside plans to form an even bigger package of plans. It's unbeleivable. This plan nesting effect is really the secret behind my plan. 

 
Perhaps it was only 2 written notifications.  Towing your car was the third.  It'd be easy to miss 2 pieces of paper nailed to your door but pretty hard to ignore a towed car. 

 
fantasycurse42 said:
How much of this will be in his plan? You think he'll get rid of billionaire tax breaks?
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I have no idea what his plan will entail but I know that he mentioned taxing US based corporations that are hoarding cash offshores so they don't have to pay US tax.  This is actually a huge problem. Take Apple for example, they have $100 billion sitting in Ireland (I don't know what the exact number is but it is huge) that has not been taxed.  Let that back into the US with a reduced one-time tax payment and you have a huge tax income stream.  There are literally 1000's of companies with billions if not trillion's of $$ sitting outside of the US that could be brought in with the right tax incentive.  It is BS that they get a break but IMO it is better than nothing if the quid pro quo is making them keep cash in the US post the one-time tax holiday.  This is just me thinking out loud with nothing to substantiate it. 

 
James Daulton said:
Perhaps it was only 2 written notifications.  Towing your car was the third.  It'd be easy to miss 2 pieces of paper nailed to your door but pretty hard to ignore a towed car. 
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I could see him towing more cars to increase government revenue, like where you're going with this.

 
I do not have the answer but after sitting with my accountant and going over everything there has to be a way to simplify things.

For go through every item on a home use Turbo Tax..it is crazy.

 
Seems like some of that could be simplified so you don't need an accounting degree to do personal simple taxes without fear of missing something.  That is probably not what will happen, but he could.

Increased tax code size

I didn't read the article, just liked the graphic showing how many pages are in the tax code now.

Also - start adding an extra tax on towed vehicles.

 
sbonomo said:
I have no idea what his plan will entail but I know that he mentioned taxing US based corporations that are hoarding cash offshores so they don't have to pay US tax.  This is actually a huge problem. Take Apple for example, they have $100 billion sitting in Ireland (I don't know what the exact number is but it is huge) that has not been taxed.  Let that back into the US with a reduced one-time tax payment and you have a huge tax income stream.  There are literally 1000's of companies with billions if not trillion's of $$ sitting outside of the US that could be brought in with the right tax incentive.  It is BS that they get a break but IMO it is better than nothing if the quid pro quo is making them keep cash in the US post the one-time tax holiday.  This is just me thinking out loud with nothing to substantiate it. 
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But for what purpose?  And why should overseas money, made overseas be taxed in the US as if it was made in the US?

 
I just can't see Republicans agreeing on "revenue neutral" tax reform.  And no Democrat is going to vote for this.

 
[icon] said:
Flat tax. Effectively abolish the IRS. 
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The Federal budget spends about $11B per year on the IRS. We couldn't take it to zero but could save several billion per year in the budget.

Much worse, it has been estimated that compliance with IRS regulations costs nearly 9 billion hours and more than $400 billion in lost productivity per year. Those are hours andn dollars that could be put to better use in our lives and in our economy.

Simplifying the tax code is long overdue and would be a tremendous accomplishment for Trump and the rest of the politicians who would approve of the legislation.

However, I remain skeptical it will happen, at least on a significant scale. There are about 95K people who work for the IRS, and about 1.2M people who make their living in tax preparation. That is a lot of people to push into unemployment.

 
Just Win Baby said:
However, I remain skeptical it will happen, at least on a significant scale. There are about 95K people who work for the IRS, and about 1.2M people who make their living in tax preparation. That is a lot of people to push into unemployment.
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One thing I've learned in the economy is, more often than not, then need to keep people employed is eventually trumped by efficiency and profitability. It sucks, but I think anyone involved in the field should be looking to reposition themselves. 

 
Vanilla Guerrilla said:
Seems like some of that could be simplified so you don't need an accounting degree to do personal simple taxes without fear of missing something.  That is probably not what will happen, but he could.

Increased tax code size

I didn't read the article, just liked the graphic showing how many pages are in the tax code now.

Also - start adding an extra tax on towed vehicles.
Click to expand...
8 point font, single spaced, narrow margins. Cuts the tax code in half!  :thumbup:

 
Much lower tax rates for individuals and corps, $2 trillion less.  he'd pay for it with border adjustment and ellimination of tax deductibility of interest for corps, as well as a lot of personal deductions (state and local taxes, mortgage interest).  That only gets him about a trillion though, the other trillion was supposed to come from a lower baseline due to ACA repeal.  That would have been deficit neutral so would have been doable with 51 votes, AFTER a budget had been passed and signed into law.

OR 60 votes in the senate.

in other words, none of this is worth considering because he can get any of it done.

 
culdeus said:
sbonomo said:
I have no idea what his plan will entail but I know that he mentioned taxing US based corporations that are hoarding cash offshores so they don't have to pay US tax.  This is actually a huge problem. Take Apple for example, they have $100 billion sitting in Ireland (I don't know what the exact number is but it is huge) that has not been taxed.  Let that back into the US with a reduced one-time tax payment and you have a huge tax income stream.  There are literally 1000's of companies with billions if not trillion's of $$ sitting outside of the US that could be brought in with the right tax incentive.  It is BS that they get a break but IMO it is better than nothing if the quid pro quo is making them keep cash in the US post the one-time tax holiday.  This is just me thinking out loud with nothing to substantiate it. 
Click to expand...


But for what purpose?  And why should overseas money, made overseas be taxed in the US as if it was made in the US?
Click to expand...
:shrug:

Because there is tax due on those profits? 

U.S. Corporations are taxed on global profits. That money has not been taxed anywhere.

Tax inversion is the practice of relocating a corporation's legal domicile to a lower-tax nation, or tax haven, usually while retaining its material operations in its higher-tax country of origin. One of the most common tax avoidance techniques is earnings stripping. Here's how it works:

  1. A U.S. corporation uses loans between different divisions of the same company to shift profits out of high-tax jurisdictions and into lower-tax ones.
  2. For example, an American subsidiary borrows money from a foreign parent company
  3. American sub then deducts the interest on that loan against its earnings.
  4. This allows U.S. companies to not only avoid tax on non-U.S. profits, inversion also allows them to avoid taxes on some domestic profits because it facilitates several techniques for re-allocating U.S. profits to lower-tax foreign jurisdictions.
  5. Most tax saving was generated by earnings stripping, not by avoiding tax on genuinely foreign profits.
The details never get discussed when people bring up "Let's have a Tax Holiday and bring that $2.5 trillion home!"

Several studies have shown the last tax holiday had little positive effect because they gave the companies such a huge break (35% reduced to 14%.) To be clear, the overseas profits have a tax due, but the current IRS code allows U.S. companies to defer foreign profits. It's a strong incentive for multinationals to hoard cash overseas and then negotiate a lower rate via a tax holiday.

Large U.S. multinational companies which are known to have significant untaxed profits

  • General Electric $110 billion profits abroad (as of 2013)
  • Microsoft $108.3 billion (2016)
  • Pfizer $69 billion(2013) On 23 November 2015, Pfizer and Irish Allergan, Plc announced their intention to merge for an approximate sum of $160 billion making this the largest pharmaceutical deal ever, and the third largest merger in history. The terms of the merger propose that the merged company will maintain Allergan's Irish Republic domicile, resulting in the new company being subject to corporation tax at the Irish rate of 12.5%.
  • Merck & Co $57.1 billion (2013)
  • Apple $215 billion (2016)
  • Abbott Labs, had $40 billion (as of 2011)
  • Johnson & Johnson, had $14.8 billion (as of 2012)
  • IBM 68.1 billion (2016)
  • Google 58.3 billion (2016)
  • Cisco 58.0 billion (2016)
  • Oracle 38.0 billion (2016)
  • Intel 26.9 billion (2016)

 
sbonomo said:
Simplify tax code, get rid of the rich peoples tax breaks (good example is tax rate on distributions being significantly less than income tax which middle class is forced to pay),  reduce the size of government so that we don't need to pay so much tax, revamp Medicare so we don't bankrupt the country, balance the budget then institute an aggressive repayment plan of existing debt so we stop paying interest.  Really should be easy right?  I am going to have a beer because I just stressed myself out.
Click to expand...
I don't think what you posted about distributions is true. Sure, they are exempt from Medicare and SS taxes, but most "rich" people exceed the SS threshold anyway. Distributions from an S corp are taxed as ordinary income, just like salary is.

 I'm assuming an S corp distribution is what you mean by "distribution." If you mean something different, please let me know.

 
[icon] said:
One thing I've learned in the economy is, more often than not, then need to keep people employed is eventually trumped by efficiency and profitability. It sucks, but I think anyone involved in the field should be looking to reposition themselves. 
Click to expand...
I agree, but I am skeptical that our politicians will really make decisions that will push several hundred thousand people into unemployment, because they will not be willing to endure the political fallout.

 
It's not as simple as "look, Apple ripped us off by parking money overseas so let's tax them more!" Sure maybe they simply do deserve to pay more, but the problem is that every cent you tax them more they take out of the consumer. 

 
fantasycurse42 said:
Specifically - Trump states "we are looking at the biggest reform ever," how is that possible? 

What I'm trying to understand is how it could be done, while spending buckets on infrastructure, increasing military spending, no agreement at all on Border Adjustment Tax, without sending our deficit through the roof? 

Please don't tell me 1+1 still equals 1, I need to see some real numbers.
Click to expand...
The easy answer to this is that it cannot be done. 

However, conservatives have never let the deficit or debt stop them before when it came to tax cuts, so I doubt they will this time. 

 
Major tax reform =  0 taxes on wages over $200,000

That will lead to lots of spending and investing, and trickling.  Under Trump's Tax Plan, there will be lots of Trickling.  Golden Trickles.

 
I'm a transactional tax attorney in DC that follows this pretty closely, and I think anyone who claims to know what will be in the plan is Gary Cohn posting under a pseudonym. The Ryan plan (with the border adjustment tax) is basically dead. The Camp plan from a couple years ago also seems dead.

Latest rumor is taking away the deduction for state and local taxes as a pay-for for a rate reduction. But there was also a rumor last week of a carbon tax being on the table (as crazy as it would be for Republicans to get behind that). So, who knows.

 
sbonomo said:
Simplify tax code, get rid of the rich peoples tax breaks (good example is tax rate on distributions being significantly less than income tax which middle class is forced to pay),  reduce the size of government so that we don't need to pay so much tax, revamp Medicare so we don't bankrupt the country, balance the budget then institute an aggressive repayment plan of existing debt so we stop paying interest.  Really should be easy right?  I am going to have a beer because I just stressed myself out.
Click to expand...
You do realize that the US has been financing debt at around 2% interest for some time now.

 
[icon] said:
I'm certain these YOOOOOGE tax cuts will benefit the common American just as much as the wealthy and large corporations. 
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Of course the people that pay the most will always save the most under any reform plan.  But let's keep laughing and doing nothing, that helps.

 
The Big Guy said:
Of course the people that pay the most will always save the most under any reform plan.  But let's keep laughing and doing nothing, that helps.
Click to expand...
A review of his tax plan showed the wealthy would benefit the most simply due to the lowering of the highest bracket.  The poor wound pay more due to an increase to the lowest bracket and reduction in exemptions.   Oh, and he wants to do away with the estate tax and AMT.  Surely a boon to the poor those.  Trump's tax plan like him sucks. 

 
ffldrew said:
You do realize that the US has been financing debt at around 2% interest for some time now.
Click to expand...
Which would be great if we invested $$ at a higher rate.  It is a huge number every year.  Do think it is okay to borrow trillions because it is cheap?????  We should have a blanced budget imo.

 
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