The tax reform thread

#1
lawgator1

lawgator1

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#1
Trump is supposed to release his tax reform proposal this week. The debate seems likely to go on for awhile since apparently the budget, a continuing resolution, Obamacare repeal, and the wall are all tethered together. So there will be much to discuss this summer.

So I'll ask the first question: what is the one thing that the proposal the week must contain?

Now, I'm going to answer that both politically and practically. I think THE KEY component is that the NET reduction in taxes for the middle class on the whole-- lets say the group of households with 50k to 150k of gross income -- must be AT LEAST three times as much as the net reduction for the top 10 percent.

Rumor is that the reform will have both simpler terms, read elimination of deductions, along with rate reductions. My point is that if you add up the net change in taxes for all middle class families, it has to be triple the reduction for all the households in the top ten percent.

I think Trump and the GOP need that politically for 2018 and beyond. The Trump base is gong to be almighty pissed if the net result is more for the top, or even equal terms, as a group. Plus that will create just too easy an attack for the Dems next year.

Plus, practically speaking, I think they SHOULD focus cuts on the middle class because long term it is demand, created by a better net income in the middle class, that is gong to drive economic growth. Everyone wants that, and it is what is supposed to pay for any cuts.

So that's what I'll be looking for, first and foremost. What do you think is the SINGLE most important aspect that the tax reform proposal needs to have?
 
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#2
#2
This fight is going to be more fun to watch than repealing Obamacare.
 
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#4
#4
lawgator1 said:
Trump is supposed to release his tax reform proposal this week. The debate seems likely to go on for awhile since apparently the budget, a continuing resolution, Obamacare repeal, and the wall are all tethered together. So there will be much to discuss this summer.

So I'll ask the first question: what is the one thing that the proposal the week must contain?

Now, I'm going to answer that both politically and practically. I think THE KEY component is that the NET reduction in taxes for the middle class on the whole-- lets say the group of households with 50k to 150k of gross income -- must be AT LEAST three times as much as the net reduction for the top 10 percent.

Rumor is that the reform will have both simpler terms, read elimination of deductions, along with rate reductions. My point is that if you add up the net change in taxes for all middle class families, it has to be triple the reduction for all the households in the top ten percent.

I think Trump and the GOP need that politically for 2018 and beyond. The Trump base is gong to be almighty pissed if the net result is more for the top, or even equal terms, as a group. Plus that will create just too easy an attack for the Dems next year.

Plus, practically speaking, I think they SHOULD focus cuts on the middle class because long term it is demand, created by a better net income in the middle class, that is gong to drive economic growth. Everyone wants that, and it is what is supposed to pay for any cuts.

So that's what I'll be looking for, first and foremost. What do you think is the SINGLE most important aspect that the tax reform proposal needs to have?
Click to expand...

Start with the AMT then. Can't say it's the single most important, but it should be in the top 5 items that are accomplished with a new tax code.
 
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#8
#8
R in the White House, R's controlling the Senate and the House.

The stars are aligned, surely they will be able to come together and reduce taxes and balance a budget, right?
 
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#9
#9
Vol737 said:
Start with the AMT then. Can't say it's the single most important, but it should be in the top 5 items that are accomplished with a new tax code.
Click to expand...

AMT is a joke. Index it better or trash it. Too many average people are finding themselves in AMT, it was billed as a tax on millionaires.

If rational people were involved I would be more hopeful. But I point to J.C. Penney's. They hired that guy from Apple, he did away with coupons and just lowered the prices. People went ape****. They were paying the same price or lower but they LIKED the gimmicks. They wanted the hoops of coupons and sales. Because they felt it was a better deal. The tax code is almost exactly the same. If you offered someone a lower rate but took their mortgage deduction they would revolt. Even if it led to a neutral or lower bill. And you can bet Quicken loans and the Realtor association will throw stupid money at that issue to scare people into attacking their reps. If they can't tout the tax advantage of loans and home buying what does that do to their sales? Again don't think of it like you would approach it, think of how the average moron will approach it. This is one single issue and it will be a bloodbath. People want tax reform, they just want it to happen to someone else.
 
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#10
#10
lawgator1 said:
Is that really a middle class tax issue?
Click to expand...

http://money.cnn.com/2015/04/07/pf/taxes/amt-wealth-tax/

People look at the amounts and think it's no big deal. The issue becomes that all their exemptions get eliminated by the AMT so their net income is reduced even further. I would prefer a consumption tax, but we have to assume any tax reform will still be a progressive income tax. So I say go with 4 or 5 greatly reduced straight up tax rates, remove all the exemptions and eliminate the AMT.
 
#11
#11
Septic said:
R in the White House, R's controlling the Senate and the House.

The stars are aligned, surely they will be able to come together and reduce taxes and balance a budget, right?
Click to expand...

Nobody is saying that. But we have a spending problem, not a revenue problem. And you can only put a dent in our debt and deficit with a GDP that's on fire, not by taxing citizens to death.
 
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#12
#12
Vol737 said:
Nobody is saying that. But we have a spending problem, not a revenue problem. And you can only put a dent in our debt and deficit with a GDP that's on fire, not by taxing citizens to death.
Click to expand...

I agree on the spending and not a revenue issue. This is put up or shut up time for the R's to get a balanced budget and institute tax reform. The party of fiscal conservatism has the power, lets see what they do with it.
 
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#16
#16
Lower corporate tax rates.

Incentivize American companies to invest offshore cash in domestic capital projects.

Change capital gains rates from just LT and ST to an indexed rate that will encourage true LT investment instead of one year plus a day.

Not exactly tax reform, but eliminate any disincentive for companies to cap their employee head counts at arbitrary levels and do the same with the number of hours worked for PT/hourly jobs. Encourage companies to create jobs instead of putting in layers of additional, required administrative BS that discourages growth.
 
#17
#17
Septic said:
R in the White House, R's controlling the Senate and the House.

The stars are aligned, surely they will be able to come together and reduce taxes and balance a budget, right?
Click to expand...

No one wants to balance the budget. Besides, we need to be wildly unbalanced (with a surplus) for decades to pay off debt.
 
#18
#18
McDad said:
No one wants to balance the budget. Besides, we need to be wildly unbalanced (with a surplus) for decades to pay off debt.
Click to expand...

I have low expectations for this administration, I'd settle for a balanced budget. Somehow I feel that even with that low bar, they won't get there.
 
#19
#19
Septic said:
I agree on the spending and not a revenue issue. This is put up or shut up time for the R's to get a balanced budget and institute tax reform. The party of fiscal conservatism has the power, lets see what they do with it.
Click to expand...

They ain't doing **** but i hope they prove me wrong
 
#20
#20
Any tax reform that, combined with the fed budget, doesn't yield a budget surplus each and every year and reduce the fed debt is an utter failure. Any thing short of that is merely shuffling the deck chairs on the Titanic.
 
#21
#21
n_huffhines said:
They ain't doing **** but i hope they prove me wrong
Click to expand...

I feel the same way, not that it's been remotely true in the past but the right will lose any semblance of being fiscally competent if they screw this up.
 
#22
#22
lawgator1 said:
Trump is supposed to release his tax reform proposal this week. The debate seems likely to go on for awhile since apparently the budget, a continuing resolution, Obamacare repeal, and the wall are all tethered together. So there will be much to discuss this summer.

So I'll ask the first question: what is the one thing that the proposal the week must contain?

Now, I'm going to answer that both politically and practically. I think THE KEY component is that the NET reduction in taxes for the middle class on the whole-- lets say the group of households with 50k to 150k of gross income -- must be AT LEAST three times as much as the net reduction for the top 10 percent.

Rumor is that the reform will have both simpler terms, read elimination of deductions, along with rate reductions. My point is that if you add up the net change in taxes for all middle class families, it has to be triple the reduction for all the households in the top ten percent.

I think Trump and the GOP need that politically for 2018 and beyond. The Trump base is gong to be almighty pissed if the net result is more for the top, or even equal terms, as a group. Plus that will create just too easy an attack for the Dems next year.

Plus, practically speaking, I think they SHOULD focus cuts on the middle class because long term it is demand, created by a better net income in the middle class, that is gong to drive economic growth. Everyone wants that, and it is what is supposed to pay for any cuts.

So that's what I'll be looking for, first and foremost. What do you think is the SINGLE most important aspect that the tax reform proposal needs to have?
Click to expand...

Flat-rate personal income tax. Would simplify everything and be fair. But, will never happen, of course.
 
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#23
#23
Danl said:
Any tax reform that, combined with the fed budget, doesn't yield a budget surplus each and every year and reduce the fed debt is an utter failure. Any thing short of that is merely shuffling the deck chairs on the Titanic.
Click to expand...

Not true. Having a reasonable amount of government debt is not a bad thing, in fact it's the smart thing to do.

Our real problem is the upcoming slug of baby boomers into retirement. The pyramid is becoming too tall and narrow. We need a large slug of them to voluntarily remove themselves from living.
 
#24
#24
I've said it before and I'll say it again, eliminate all loopholes in the tax code (be quiet McDad)

Get rid of all the exemptions, special laws and everything else and start fresh. As well as making it a Constitutional Amendment to have to be able to add exemptions into the system. Four tier system based on income levels: $0-50,000, $50-150K, $150-200K, $200K and beyond with a gradual tier rate of 10-15-20-30% of combined income.

That's a good start.
 
#25
#25
OuterBanksVol said:
Not true. Having a reasonable amount of government debt is not a bad thing, in fact it's the smart thing to do.

Our real problem is the upcoming slug of baby boomers into retirement. The pyramid is becoming too tall and narrow. We need a large slug of them to voluntarily remove themselves from living.
Click to expand...

FFS! We already have an EXTREMELY unreasonable amount of government debt. So, no, we shouldn't any more to the debt.
 
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