GOP Tax Reform

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anonymous_coward
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GOP Tax Reform

Here's the actual working document:
https://waysandmeansforms.house.gov/uploadedfiles/tax_cuts_and_jobs_act_...

Highlights:
1) Doubles the standard deduction. Huge bonus for renters & people who don't itemize deductions (students, poor people, etc.)
2) Removes/limits a bunch of deductions:
State & Local taxes (this is under debate, so it might just be a cap)
student loan interest
mortgage interest can only be deducted on mortgages less than $500k (was $1mm before)
charitable deductions are limited
tax prep
moving expenses
etc.
3) Collapses the rate brackets into 5. Generally the levels are lower, so for most people this is a cut.
4) Cap gains on primary residence is more restrictive (must be 5 of last 8 years instead of 2 of last 5).
5) AMT is eliminated - a huge tax cut for wealthy who have a lot of deductions (usually real estate)
6) Estate tax exclusion is raised to $10mm (was $5mm) - in other words, a tax cut for 5-10 millionaires who are about to eat it. 2023 it will be eliminated (but who the hell knows what will happen between now and then)
7) corporate tax rate is cut to a flat 20% (currently has 4 tiers from 15-35, so if you're in the 1st tier, 0-50k, you're getting a tax increase).

There are obviously a lot more but those are the broad strokes.

Generally speaking as a fiscally conservative liberal, I like and don't like it (I am guessing that is the probably the common response).

On one hand, with the exception of the elimination of AMT & the estate tax, it's fairly progressive. It cuts taxes for a lot of lower and lower-middle class people, and keeps the highest tax bracket unchanged. The corporate tax cut will probably be a net positive, since even though corporate taxes are imposed on companies, a lot of economic thinking suggests that the burden is shouldered by the consumer and the employees.

On the other hand, it's going to increase the deficit. All the bullshit about stimulating the economy is just that, bullshit. We're already at 3% growth, it's not going to magically jump to 5% without some dramatic game changing technology breakthrough. The supply sider snake oil has been peddled so many times it's basically rancid at this point.

I'll be the first to say it, I'd rather have LePage style *real* fiscal discipline than have everybody get free money. Sorry, that's just how I roll.

pmconusa
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This scheme is nothing but a

This scheme is nothing but a rearrangement of the chairs on the Titanic. It still comes up with a negative outflow because the spending still exceeds the receipts to pay for them. It also posits that the increase in economic activity generated by the added money plugged into the system will generate more revenue than costs. This is impossible because, even if it is taxed at 100% it will only recover what is added. That is exactly what is not going to happen.

The corporate tax reduction will funnel more money to the firms that actually pay corporate tax and it will disappear into the pockets of the executives who manage these companies and more likely to the unions who will extract the savings as they did when many of them were replaced by machines. No new jobs will be created as a result, except in subsidized industries and government protected monopolies as the excess money available will be spent on items manufactured more cheaply in foreign countries.

As our population grows, so too will the welfare state. We have already seen the government declare there is no inflation and the Social Security payments have been capped. Government creates additional inflation, or a decrease in value in the currency for every dollar they add to the system and if you take into consideration the cost of government and not just a basket of commodities, the cost of living rises every year because it is the nature of the economic system we have adopted as has every society since the invention of currency, be it specie or paper. This failing system is described in my book The Real Economy along with a substitute that will extend the life of humans on the planet.

john w k
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GOP tax reform is tax

GOP tax reform is tax manipulation, not tax reform!

When it comes to tax reform you can bet your bottom dollar our Washington Swamp Creatures [Republican and Democrats alike] want nothing to do with tax reform which would actually alter the manner in which federal revenue is raised. What our Republican Swamp Creatures falsely claim is “tax reform”, is nothing more than a plan to manipulate the existing method of laying and collecting taxes calculated from profits, gains, salaries, wages tips and other “incomes”, and it would create a whole new set of winners and losers using this type of tax.

Keep in mind, under Kevin Brady’s so called “tax reform”, we still wind up with a direct unequal tax upon individuals and businesses which is calculated from profits, gains, salaries and other “incomes” ___ a tax system allowing our federal government to create privileged classes exempt from taxation; a tax which can, and has been used as a weapon by notoriously evil politicians to harass and punish political foes; a tax system allowing corrupt politicians to require taxpayers to divulge the most personal aspects of their private lives; a tax which has allowed our federal government from one Congress to another to micro manage our lives and businesses and place the heel of an oppressive government on the necks of America's most productive citizens and business owners, which in fact has resulted in our current repressive state of affairs.

President Trump may very well have his heart in the right place when it comes to “tax reform”, but he is being conned by slithering snakes like Kevin Brady, Paul Ryan and Mitchell McConnell who have no intention to end the authoritarian system of federal taxes calculated from profits, gains, salaries and other “incomes” ___ a system of taxation which has proven to be a tool of corrupt politicians and is destructive to our nation’s general welfare and prosperity.

Unlike our Founders who wanted America’s market place to be used to fill our national treasury using specific taxes laid upon articles of consumption ___ a kind of tax which is limited by the purchase of such articles, making it a “self-regulating” tax ___ and across-the-board imposts and duties at our water’s edge such as tonnage taxes, and if necessary a direct apportioned tax to extinguish deficits should Congress find impost, duties and excise taxes insufficient during the course of a fiscal year, Brady, Ryan and McConnell have joined forces with the Democrat Party Leadership to keep alive the notoriously evil system of income taxation, which is a primary source of power used by Washington sewer rats to reward donors, punish enemies, redistribute wealth which America’s labor, businesses and investors have worked to produce, and keeps the heel of a corrupt federal government on the necks of the American People.

Real tax reform is not found in keeping alive “income taxation” and manipulating its application. It is found by ending the socialist income tax experiment and returning to our Constitution’s ORIGINAL TAX PLAN as it was intended to operate by our Founders. Unfortunately, not one member of Congress, nor any media personality to the best of my knowledge, including those at FoxNews, has, in recent times, discussed the merits and wisdom of the Fair Share Balanced Budget Amendment which would return us to our Constitution’s original tax plan. In fact, there really isn’t any “tax reform” being discussed. Instead, all that is talked about is income tax manipulation and creating a whole new set of winners and losers, while keeping this notorious evil tax alive with all its miseries, shortfalls and never ending class warfare which is destroying America from within.

JWK

“Honest money and honest taxation, the Key to America’s future Prosperity“ ___ from “Prosperity Restored by the State Rate Tax Plan”, no longer in print.

john w k
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Paul Ryan lies on FoxNews and


Paul Ryan lies on FoxNews and no one calls him out!

 
 
Paul Ryan was on FoxNews this morning [the 8AM hour] and once again he has lied about his tax reform plan, saying that under his plan and its simplification, the American People would be able file their tax returns on a post card. The truth is, the American people will still have to determine what is and is not “taxable income” under his plan, and this is the gimmick used by Congress to grant preferences and exclusions, and select winners and losers. And for one to determine what their “taxable income” is under Paul Ryan’s alleged tax reform, will still require full knowledge of what is taxable income and the reams of pages Congress uses to define “taxable income”.

Perhaps someday one of our friends at FoxNews will ask Paul Ryan, what are the characteristics which define taxable income under his "tax reform"? Of course, this question was succinctly answered many times by our Justice system, e.g., in Eisner v. Macomber 252 U.S. 189, 206 (1920), a case challenging a tax on "income" the Court states the following:

"In order, therefore, that the clauses cited from article 1 of the Constitution may have proper force and effect, save only as modified by the amendment, and that the latter also may have proper effect, it becomes essential to distinguish between what is and what is not 'income,' as the term is there used, and to apply the distinction, as cases arise, according to truth and substance, without regard to form. Congress cannot by any definition it may adopt conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised.

The fundamental relation of 'capital' to 'income' has been much discussed by economists, the former being likened to the tree or the land, the latter to the fruit or the crop; the former depicted as a reservoir supplied from springs, the latter as the outlet stream, to be measured by its flow during a period of time. For the present purpose we require only a clear definition of the term 'income,' [252 U.S. 189, 207] as used in common speech, in order to determine its meaning in the amendment, and, having formed also a correct judgment as to the nature of a stock dividend, we shall find it easy to decide the matter at issue.


After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, 247 U.S. 183, 185 , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054)."

As you can see, defining what is and what is not taxable income requires a taxpayer to deduct all necessary expenses and outlays from gross receipts in order to arrive at taxable income. Income from a business which was wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to a tax in that case.

And, in Sullenger vs. Commissioner, 11 T.C. 1076 (1948) the Court allowed the business owner [who made illegal purchases of meat] to deduct the cost of meat purchased at a higher price then set by the Office of Price Administration, a World War II price control agency, which he then resold for profit. The “income” from those sales was being taxed which was at issue in the case. The Court went on to cite Sullivan and concluded: “No authority has been cited for denying to this taxpayer the cost of goods sold in computing his profit, which profit alone is gross income for income tax purposes.”

So, what is the cost of goods sold by a wage earner? Is it not his/her time, labor, skills, the cost of travel to and from work, etc? The value of which must be deducted from gross receipts in order to arrive at an alleged profit or gain?

Shouldn't a working person be allowed to deduct transportation costs to and from work in calculating their profit or gain? How about the costs involved with providing the necessities of life or medical expenses which a wage earner incurs when making their labor possible? Shouldn't a wage earned be allowed to deduct these costs from gross receipts in calculating his/her profit or gain?

How about the eight hour of life which a working person invests in earning a wage? Is this not to be considered as their property and a capital outlay, the value of which must be deducted from gross receipts in order to arrive at an alleged profit or gain?

Do we now see one of the reasons why Paul Ryan’s “tax reform” is still capricious, arbitrary and an immoral system of taxation, and why the power to lay and collect taxes calculated from incomes must be withdrawn from Congress' hands?

JWK

"The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property." ___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

JackStrawFromWichita
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“the American People would be

the American People would be able file their tax returns on a post card.”

Does Ryan want us to go back to mailing in tax returns versus e-filing them like 91% currently are?

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