Tax reform

[GAVol]

Taxation and revenue: Tax rates are not correlated to federal government revenue. Rates change what an individual pays. Rates do not change what federal government receives in revenue. Revenue average remains relatively constant at about 19% of GDP. The historical trend has been tracked since before WW2. Tax policy has changed frequently over those years. Tax rates have fluctuated dramatically as well. Therefore, one must be careful using phrases like, "deficit increasing tax cuts", or, "revenue neutral". These types of phrases are oxymoronic, at best. They are likely an outright lie used by the political class to manipulate the constituency, at worst.

Those who worry about revenue would have more success by championing aggressive growth in GDP. So far, this is the only historically valid method to increase money in the federal cofer. 19% of 100 Trillion is more than 19% of 20 Trillion. The rate one pays has no effect on how little or how much revenue is collected. GDP grows, currently, regardless of the policies of any particular administration. Both Rs and Ds have been in power during booms and busts. Economic expansion and retraction in America has been largely insulated from central planning by both parties.

For me then the question becomes: if revenue percentage is constant relative to GDP and only increased by increasing GDP and GDP is relatively uncontrollable by politicians, then what are we arguing about? The only control politicians have on tax monies is the spending of the revenue. Neither party and no configuration of DC, save two, has shown any evidence over 70 years that spending is a legitimate concern.

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[Septic]

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My understanding of the laffer curve is that higher taxes (on corporations for example) actually results in less revenue.

Which I believe is the premise behind the 'anticipated' job and revenue growth due to the reduction the corporate tax rate from 35 to 20% which I guess falls below the arc of the curve...

 

[Vol737]

If the tax rate were zero your kids would still be walking down pig trails to one room schools heated with pot belly stoves.

Not if replaced with a consumption tax, which would be preferable IMO.

 

[Ernest T. Vol]

My understanding of the laffer curve is that higher taxes (on corporations for example) actually results in a less revenue.

Which I believe is the premise behind the 'anticipated' job and revenue growth due to the reduction he corporate tax rate from 35 to 20% which I guess falls below the arc of the curve...

The idea is the same. A 100% tax practically gets the same result as a 0% tax. A long-term parasite needs a healthy host. Consider the repatriation example. Estimated 4 trillion dollars stuck in other countries. If only half comes back at the proposed rate of 5% (.05 x 2 trillion), that's a lot of government revenue. Compare to 0 coming back with the current structure.

 

[armchair]

hard to argue with this

I believe the Republicans and conservative groups have acknowledged that their tax plan would result in a loss of federal revenue of about $1.5 Trillion over the next decade. There was a lot of talk from them about how the tax cuts would have to be offset by spending cuts, so as not to increase the deficit, but I think they've decided not to worry about that anymore.

The GOP always likes to claim that tax cuts for wealthy and corporations will lead to skyrocketing economic growth but most economists say that is not the case, that's not going to happen--it's the usual white-is-black GOP BS. The U.S. economic engine will roar and money will "trickle down" to the masses. We've heard this more than once before from conservatives. The economy doesn't roar--and there is no "trickle-down." The Republican Party always want to cut taxes on the wealthy--that is their schtick. Why? So the wealthier can be even wealthier? That party is also fixated on giving ever more breaks to big corporations at the expense of average Americans. Why?

 

[Ernest T. Vol]

I believe the Republicans and conservative groups have acknowledged that their tax plan would result in a loss of federal revenue of about $1.5 Trillion over the next decade. There was a lot of talk from them about how the tax cuts would have to be offset by spending cuts, so as not to increase the deficit, but I think they've decided not to worry about that anymore.

The GOP always likes to claim that tax cuts for wealthy and corporations will lead to skyrocketing economic growth but most economists say that is not the case, that's not going to happen--it's the usual white-is-black GOP BS. The U.S. economic engine will roar and money will "trickle down" to the masses. We've heard this more than once before from conservatives. The economy doesn't roar--and there is no "trickle-down." The Republican Party always want to cut taxes on the wealthy--that is their schtick. Why? So the wealthier can be even wealthier? That party is also fixated on giving ever more breaks to big corporations at the expense of average Americans. Why?

What do you do with more money in your pocket, Chair?

 

[armchair]

That's exactly what the income tax rate should be. Taxing income is not only absurd but also requires an insane amount of intrusion into our personal lives to achieve.

that a demented individual, living deep in the woods, would make after an evening of drinking fermented raccoon juice. In other words, it's absurd. A well-functioning, progressive tax system is a hallmark of well-functioning, cohesive societies.

 

[Vol8188]

that a demented individual, living deep in the woods, would make after an evening of drinking fermented raccoon juice. In other words, it's absurd. A well-functioning, progressive tax system is a hallmark of well-functioning, cohesive societies.

So society doesn't function without progressive taxes? Why not?

 

[armchair]

Nope.

Taxes pay for roads and highways, schools, the army, the police, medical and scientific research, health care for the elderly and assistance for the indigent--and many other essential things. Where do you think the money would come from otherwise? Are you going to wave a magic wand?

 

[Vol8188]

I believe the Republicans and conservative groups have acknowledged that their tax plan would result in a loss of federal revenue of about $1.5 Trillion over the next decade. There was a lot of talk from them about how the tax cuts would have to be offset by spending cuts, so as not to increase the deficit, but I think they've decided not to worry about that anymore.

The GOP always likes to claim that tax cuts for wealthy and corporations will lead to skyrocketing economic growth but most economists say that is not the case, that's not going to happen--it's the usual white-is-black GOP BS. The U.S. economic engine will roar and money will "trickle down" to the masses. We've heard this more than once before from conservatives. The economy doesn't roar--and there is no "trickle-down." The Republican Party always want to cut taxes on the wealthy--that is their schtick. Why? So the wealthier can be even wealthier? That party is also fixated on giving ever more breaks to big corporations at the expense of average Americans. Why?

1.5 trillion over 10 years isn't a lot given our current annual deficit. And this isn't a problem we can spend our way out of. We have to cut spending.

 

[Septic]

The idea is the same. A 100% tax practically gets the same result as a 0% tax. A long-term parasite needs a healthy host. Consider the repatriation example. Estimated 4 trillion dollars stuck in other countries. If only half comes back at the proposed rate of 5% (.05 x 2 trillion), that's a lot of government revenue. Compare to 0 coming back with the current structure.

I understand how the curve works, it makes sense.

 

[theFallGuy]

How did the United States become one of the most powerful nations in the world without one for so long then? Relative to the rest of the world, the United States was not some backwater outpost in 1913.

government revenues were mainly supported by tariffs prior to the ratification of the federal income tax

 

[Vol8188]

Taxes pay for roads and highways, schools, the army, the police, medical and scientific research, health care for the elderly and assistance for the indigent--and many other essential things. Where do you think the money would come from otherwise? Are you going to wave a magic wand?

Health care for the elderly should be paid for by the elderly or their families. Assistance for the indigent? If they need assistance, they can help themselves.

The rest, we had all of that prior to 1913. And schools should be privatized

 

[armchair]

Laffer's theories have been discredited.

Here's one link--there are many showing his ideas are junk economics.

Five Critiques of Arthur Laffer’s Supply-Side Model Show Tax Cuts as Junk Economics – ITEP

 

[Vol8188]

Laffer's theories have been discredited.

Here's one link--there are many showing his ideas are junk economics.

Five Critiques of Arthur Laffer’s Supply-Side Model Show Tax Cuts as Junk Economics – ITEP

A man who believes in Keynesian economics should never call another's views "junk economics".

 

[Septic]

1.5 trillion over 10 years isn't a lot given our current annual deficit. And this isn't a problem we can spend our way out of. We have to cut spending.

This.

It amazes me that the people who whine most about the deficit and out of control spending aren't addressing this. Instead knowingly adding to the deficit...

Maybe it shouldn't. The politicians who depend on the wealthiest to support their careers are giving a present back to them under the guise of an ~$1,200 "Christmas present" to the middle class.

LOL

As a S-Corp business owner and after reading the details of how they've carved out caveats for us - this plan is a joke for small businesses. This was the one thing I was really hoping that trumpo and company would get right. Sad, very sad.

 

[Vol8188]

This.

It amazes me that the people who whine most about the deficit and out of control spending aren't addressing this. Instead knowingly adding to the deficit...

Maybe it shouldn't. The politicians who depend on the wealthiest to support their careers are giving a present back to them under the guise of an ~$1,200 "Christmas present" to the middle class.

LOL

As a S-Corp business owner and after reading the details of how they've carved out caveats for us - this plan is a joke for small businesses. This was the one thing I was really hoping that trumpo and company would get right. Sad, very sad.

That's where I lost my respect for "conservatives". Both sides are unwilling to cut spending, but it should be the conservatives pushing hardest for this.

 

[05_never_again]

That's where I lost my respect for "conservatives". Both sides are unwilling to cut spending, but it should be the conservatives pushing hardest for this.

Neither political party is fiscally conservative. One of the two major parties pays lip service to it as part of its schtick.

 

[Vol8188]

Neither political party is fiscally conservative. One of the two major parties pays lip service to it as part of its schtick.

And their lip service is why I have lost respect for them. Outside of the Liberty caucus, there are no real conservatives.

 

[Septic]

At a time like this - it's important that American tax payers subsidized religions more than $82,500,000,000 last year.

 

[Vol8188]

At a time like this - it's important that American tax payers subsidized religions more than $82,500,000,000 last year.

Everyone's income should be tax exempt.

Corporations especially. I've never heard a single good argument for why you should tax corporate profit given that you already tax the income of the owners. Why should they be taxed twice?

 

[Ernest T. Vol]

This.

It amazes me that the people who whine most about the deficit and out of control spending aren't addressing this. Instead knowingly adding to the deficit...

Maybe it shouldn't. The politicians who depend on the wealthiest to support their careers are giving a present back to them under the guise of an ~$1,200 "Christmas present" to the middle class.

LOL

As a S-Corp business owner and after reading the details of how they've carved out caveats for us - this plan is a joke for small businesses. This was the one thing I was really hoping that trumpo and company would get right. Sad, very sad.

I've looked at the whole bill. It is being sold as a middle class tax cut but is really more of a large C corporate cut (which is great). I don't know why they wont just tell the truth. The R's are so afraid of being demonized by people like Chair, they have bent over backwards to tax high income individuals. They might as well be D's themselves. If you're an S corp, you know the IRS is looking at how much payroll you are paying yourself vs taking a distribution. The IRS, wants almost all your S corp earnings coming out as a paycheck, therefore, the pass through amount subject to the lower 25% rate will be minimal (not much tax savings for you).

 

[Septic]

Everyone's income should be tax exempt.

Corporations especially. I've never heard a single good argument for why you should tax corporate profit given that you already tax the income of the owners. Why should they be taxed twice?

They shouldn't and there's a mechanism for some to avoid it. I do.

As I stated yesterday, there has to be a vehicle to provide infrastructure, defense etc.

A consumption tax could work, but would it? Again, spending has always been the issue - not revenue.

 

[Septic]

I've looked at the whole bill. It is being sold as a middle class tax cut but is really more of a large C corporate cut (which is great). I don't know why they wont just tell the truth. The R's are so afraid of being demonized by people like Chair, they have bent over backwards to tax high income individuals. They might as well be D's themselves. If you're an S corp, you know the IRS is looking at how much payroll you are paying yourself vs taking a distribution. The IRS, wants almost all your S corp earnings coming out as a paycheck, therefore, the pass through amount subject to the lower 25% rate will be minimal (not much tax savings for you).

I suspect that a few items like the mortgage interest deduction for homes >$500k and the deductions for state and local taxes will be capitulated to get a few votes back on board and this will pass.

Congratulations to the ultra wealthy and the C-Corps.

 

[Ernest T. Vol]

I suspect that a few items like the mortgage interest deduction for homes >$500k and the deductions for state and local taxes will be capitulated to get a few votes back on board and this will pass.

Congratulations to the ultra wealthy and the C-Corps.

The lower C corp rate is a red hot winner. They have to keep that. The individual side is only luke-warm, ready to be spewed. The high earners (tax payers) are not getting anything. They are not even getting the benefit of filling the new lower brackets on the way up. There is a bubble tax that will claw back the lower bracket benefits when income goes above $1m.