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

I'm a conservative and this tax reform is crap.  Flat tax would work just 13-15% no deductions of any kind and boom it's done.  But you have too many impacted industries...cuts the overhead of the IRS by 80%, crushes accounting firms, tax lawyers, etc....  While we are at stick some term limits on congress (6) and senate (2)

 
Juxtatarot said:
It would work just fine if you want to hurt the poor more and explode the deficit.
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How does it hurt the poor more? A percentage is graduated in nature - it is proportionally the same amount of money from everyone.  Also explain the deficit explosion.

 
Noah Davis said:
I'm a conservative and this tax reform is crap.  Flat tax would work just 13-15% no deductions of any kind and boom it's done.  But you have too many impacted industries...cuts the overhead of the IRS by 80%, crushes accounting firms, tax lawyers, etc....  While we are at stick some term limits on congress (6) and senate (2)
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Oh, my.  These are unabashedly good things for the US and the economy.  Having industries based solely on tax compliance is kind of crazy.  

Reducing IRS overhead is a great thing - that agency really needs a ton more investigators to go after tax cheats.  Current investigators don't even scratch the surface of likely evasion practices.

Juxtatarot said:
It would work just fine if you want to hurt the poor more and explode the deficit.
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Doubling the standard deduction would drop the poor's tax rate to a very low amount.  While we need specifics, this isn't a crushing blow, in a general sense.

 
Sand said:
Doubling the standard deduction would drop the poor's tax rate to a very low amount.  While we need specifics, this isn't a crushing blow, in a general sense.
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My response was for Noah Davis' proposal which would allow "no deductions of any kind".

 
Noah Davis said:
How does it hurt the poor more? A percentage is graduated in nature - it is proportionally the same amount of money from everyone.  Also explain the deficit explosion.
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No deductions mean the poor would pay more than they do.  (Currently something like half of households don't pay federal income tax).

Your flat tax would result in a large tax cut for the wealthy.

 
Sand said:
Oh, my.  These are unabashedly good things for the US and the economy.  Having industries based solely on tax compliance is kind of crazy.  

Reducing IRS overhead is a great thing - that agency really needs a ton more investigators to go after tax cheats.  Current investigators don't even scratch the surface of likely evasion practices.

Doubling the standard deduction would drop the poor's tax rate to a very low amount.  While we need specifics, this isn't a crushing blow, in a general sense.
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Zero chance this is anywhere close to getting approved, dead on arrival, here is why:

One way the plan proposes to raise money is by eliminating the state and local tax deductions, something that would disproportionately hit districts in California, New York, Minnesota, Michigan and New Jersey. "This is very easy to label the "blue state" tax, which means all Congressional Republicans will vote for the elimination," wrote Krueger, noting it's a "no-brainer" to dump in and raise $1.3 trillion.

But there's a potential problem in getting it approved. There are 52 Republicans in the House from those states and the GOP has a 24-seat majority. "The central canon of tax reform is the goring of the sacred cows," he wrote. "One of the problems with that is that the most expensive cows are holier than others."
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parrot said:
Not when they are simultaneously eliminating personal exemptions.  It's a bait and switch.  
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All in the details.  Again I'd like to see what really turns out on paper to see how this affects different income groups.

 
So he has actual people in the audience to use as examples instead of made up people. Kudos. That said, the family where both mom and dad work full-time and they have four kids, will save $1000 a year in taxes isn't exactly a windfall. 

 
Sheriff Bart said:
So he has actual people in the audience to use as examples instead of made up people. Kudos. That said, the family where both mom and dad work full-time and they have four kids, will save $1000 a year in taxes isn't exactly a windfall. 
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Not watching the speech. How is he supporting that, if he is?  Without brackets, I'm not sure how they could model.  I'm a tax attorney and have no idea if I'd go up or down.

 
Steve Tasker said:
I tried to read these details (tax CPA) and I really have no idea what's happening here.  It's all so vague.  How can anyone know if they support or oppose this?
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I only read the bullet points but it seems obvious that it will substantially reduce taxes for businesses and the wealthy.  It also seems likely that many in the middle class with see a modest reduction.  That's enough for me to oppose it.

 
Juxtatarot said:
I only read the bullet points but it seems obvious that it will substantially reduce taxes for businesses and the wealthy.  It also seems likely that many in the middle class with see a modest reduction.  That's enough for me to oppose it.
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Wait until we see the size of the surcharge on the wealthy before making pronouncements.  Really, the details are what matter here and they haven't released them.

 
fantasycurse42 said:
Zero chance this is anywhere close to getting approved, dead on arrival, here is why:

One way the plan proposes to raise money is by eliminating the state and local tax deductions, something that would disproportionately hit districts in California, New York, Minnesota, Michigan and New Jersey. "This is very easy to label the "blue state" tax, which means all Congressional Republicans will vote for the elimination," wrote Krueger, noting it's a "no-brainer" to dump in and raise $1.3 trillion.

But there's a potential problem in getting it approved. There are 52 Republicans in the House from those states and the GOP has a 24-seat majority. "The central canon of tax reform is the goring of the sacred cows," he wrote. "One of the problems with that is that the most expensive cows are holier than others."
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That's an interesting point.  I don't think one can make good tax policy while having to account for horrific tax policy in some localities, though.

 
Juxtatarot said:
I only read the bullet points but it seems obvious that it will substantially reduce taxes for businesses and the wealthy.  It also seems likely that many in the middle class with see a modest reduction.  That's enough for me to oppose it.
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https://www.cnbc.com/2017/09/27/wall-street-likes-it-but-most-americans-disagree-with-cutting-corporate-taxes.html

Who cares about reducing taxes for corporations and letting them repatriate overseas profits (to buy back more shares)? It appears the overwhelming majority of Americans don't care for that... I sure as #### don't, not like they invest that extra money into people.

This tax plan is for Wall Street/Investment Banks/Billionaires. 

I doubt it can get through as A) it doesn't seem close to revenue neutral B) No chance any Republican in NJ/NY/CA/CT or a few others would vote for it (at least if their intention is to ever be elected to any political office again)

 
fantasycurse42 said:
No chance any Republican in NJ/NY/CA/CT or a few others would vote for it (at least if their intention is to ever be elected to any political office again)
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Everyone in cali is rich so they're getting a nice cut in their rate

 
fantasycurse42 said:
https://www.cnbc.com/2017/09/27/wall-street-likes-it-but-most-americans-disagree-with-cutting-corporate-taxes.html

Who cares about reducing taxes for corporations and letting them repatriate overseas profits (to buy back more shares)? It appears the overwhelming majority of Americans don't care for that... I sure as #### don't, not like they invest that extra money into people.

This tax plan is for Wall Street/Investment Banks/Billionaires. 

I doubt it can get through as A) it doesn't seem close to revenue neutral B) No chance any Republican in NJ/NY/CA/CT or a few others would vote for it (at least if their intention is to ever be elected to any political office again)
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When I was working in business development and international strategy, country taxes definitely did influence the footprint that you'd put into certain countries. I couldn't tell if you if the magic number on corporate rates is 15 or 20, but it does influence American jobs. 

This is about the only Trump thing that I can get behind. Hate everything else. 

 
fantasycurse42 said:
This tax plan is for Wall Street/Investment Banks/Billionaires. 
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The tax plan is squarely aimed at small business owners.  The group, BTW, who are the economic engine of the country. 

It's impossible to drive growth in this area without the falsetto, indignant voice of unfairness creep in because we're not throwing gobs of cash at those who won't ever create a job or grow wealth. 

 
Sand said:
Because DC works off of what's in crisis, rather than what's important.  So these things are thrown into the swamp just before they need a vote so no one can examine it.  

Same game as always.  
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You know I disagree with you on so many issues, but I agree 100% with your analysis here. And anyone who doesn't understand the bolded will never get Washington.

 
The OMB director is on Tucker right now.  He makes some pretty strong arguments on this tax plan.  First impression is the guy is pretty brilliant - very interesting to listen to.  He's a big proponent of the tax plan proposals and, in his estimations, the big winners are the middle class and the economy at large.  Big losers include the rich that live in tax laden states - the Federal tax system would now quit subsidizing these states with their large deductible taxes.  

On taxes on labor vs. capital - the new tax rates are driving toward more equality between these classes of taxes.  The tax-drive behavior of citizens will decrease because the taxes charged are more indifferent on behavior.  Businesses will lose a lot of deductions.

Whether you agree with these positions or not I heartily recommend that people see this on rerun later.  The guy gives a great interview and it's a good data point to begin to evaluate this as he's obviously much more in tune with what's going to come out than others.  

 
Sand said:
The OMB director is on Tucker right now.  He makes some pretty strong arguments on this tax plan.  First impression is the guy is pretty brilliant - very interesting to listen to.  He's a big proponent of the tax plan proposals and, in his estimations, the big winners are the middle class and the economy at large.  Big losers include the rich that live in tax laden states - the Federal tax system would now quit subsidizing these states with their large deductible taxes.  

On taxes on labor vs. capital - the new tax rates are driving toward more equality between these classes of taxes.  The tax-drive behavior of citizens will decrease because the taxes charged are more indifferent on behavior.  Businesses will lose a lot of deductions.

Whether you agree with these positions or not I heartily recommend that people see this on rerun later.  The guy gives a great interview and it's a good data point to begin to evaluate this as he's obviously much more in tune with what's going to come out than others.  
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Really, the details are what matter here and they haven't released them.
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Up in the air on this one.  Losing deductible of local taxes could really hurt me but if I can get taxed at business rate (I am in a partnership) so all my earnings are profits my the partnership I could make out well.  If not I am totally against this.

 
Noah Davis said:
I'm a conservative and this tax reform is crap.  Flat tax would work just 13-15% no deductions of any kind and boom it's done.  But you have too many impacted industries...cuts the overhead of the IRS by 80%, crushes accounting firms, tax lawyers, etc....  While we are at stick some term limits on congress (6) and senate (2)
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Total personal income in the US ~15 trillion.  A lot of money no?

Total Federal tax income collected ~3.5 trillion.  Total State and Local income collected an additional ~3 Trillion.  Granted a lot of the State/Local income is property taxes/sales taxes.  But we're talking around 40% taxes currently when you add them all up.

So is your plan 1) Cut 2/3 of all taxes?  If so it would be popular but would probably be pretty bad for our deficit.  Or 2) Have 13-15% flat tax plus an additional 25% tax (average) that will be calculated other ways?  Because if you have a flat income tax plus sales taxes/property taxes which are both progressive your total tax is going to be progressive.  Not flat.  You're just switching from the rich paying more to the poor paying more.

I'm not against a flat tax.  But if you want a truly flat tax it has to be around 40% of our income and all other taxes are removed.  Otherwise your flat tax is anything but.  If you want a flat tax of 13-15% with no additional taxes we'd have to cut something like 2/3 of spending which isn't happening.

 
Sheriff Bart said:
Trump says he won't benefit under his tax proposal. :lmao:
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How dumb is it that he's even bringing this up?  He's bragging that he's promoting a bill that wouldn't benefit him (but it will).  It's like he wants bonus points for doing something that may not benefit him directly.  Hey buddy, you're President of the United States, you shouldn't be making decisions based on how it will help you personally.

 
Sand said:
 Big losers include the rich that live in tax laden states - the Federal tax system would now quit subsidizing these states with their large deductible taxes.  
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So the states that are contributing the most already in federal taxes and taking the least in federal spending will no longer "be subsidized" by the leech states.

 
Biff84 said:
How dumb is it that he's even bringing this up?  He's bragging that he's promoting a bill that wouldn't benefit him (but it will).  It's like he wants bonus points for doing something that may not benefit him directly.  Hey buddy, you're President of the United States, you shouldn't be making decisions based on how it will help you personally.
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He is right.  When you don't pay taxes then a tax cut isn't going to benefit you.

 
I have no idea if the Trump plan will benefit me or not because the details are sketchy but if the deduction for local property taxes is eliminated it is probably going to hurt.   I'm not getting too worked up about it now cause who knows what this thing will look like if/when it passes but I have a bad feeling about this.

 
I don't expect this to pass. The Los Angeles Times put out a report, which I suspect will be the first of many, about how bad this is going to be for California. Sand's analysis was essentially correct; much like the healthcare bill, this bill is essentially a transfer of wealth from the big Democratic states to the smaller Republican states.

There's going to be tremendous pressure on California Republicans to resist this bill unless it is changed significantly. We may see some kind of tax cut come out of all of this, but I doubt it will look anything like what was presented yesterday.

 
timschochet said:
Sand's analysis was essentially correct; much like the healthcare bill, this bill is essentially a transfer of wealth from the big Democratic states to the smaller Republican states
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Just like everything that the GOP has done since 1995 except for a short break at the end of the last decade.  

ETA: And no!  The prior 50 years show that both sides did not do this!

 
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timschochet said:
I don't expect this to pass. The Los Angeles Times put out a report, which I suspect will be the first of many, about how bad this is going to be for California. Sand's analysis was essentially correct; much like the healthcare bill, this bill is essentially a transfer of wealth from the big Democratic states to the smaller Republican states.

There's going to be tremendous pressure on California Republicans to resist this bill unless it is changed significantly. We may see some kind of tax cut come out of all of this, but I doubt it will look anything like what was presented yesterday.
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I still have a hard time seeing something that blows such  big hole in the debt getting passed

 
Slapdash said:
I still have a hard time seeing something that blows such  big hole in the debt getting passed
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You assume they care.  

Rattner was getting into the wealth transfer involved in this and it's basically a net negative to households while be a huge giveaway to large corporations.  

There's also some real wonky slight of hand in there.  By eliminating state and local tax deduction (along with the medical deduction) they basically are eliminating the mortgage deduction for anyone with less than 24K in mortgage payments since that is the only large deduction left.  So basically unless you are uber wealthy everyone will be getting a 24K for married or 12K for singles standard deduction which should be reduced to by your current exemption (4150 for most).  It's a net negative to most people.  

 
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