Jump to content

chasfh

America And The Terrible, Horrible, No Good, Very Bad GOP Tax Plan

Recommended Posts

Feels like, since this is a major major deal, this one should get its own thread.

Let's open the discussion with this, with data courtesy from the Congressional Budget Office:

5a242e1e86b5b_CBOtaxplan.thumb.jpg.04a512937e4fcaaa5977f6cae8664456.jpg

Share this post


Link to post
Share on other sites

From what I can tell, the biggest losers are those with multiple dependents who are ineligible for the child credit.   And those who formerly had significant state tax and medical expenses to itemize.  

That chart doesn't tell us much.  Are these singles?  Married couples?  Any dependents?

Share this post


Link to post
Share on other sites
27 minutes ago, Melody said:

From what I can tell, the biggest losers are those with multiple dependents who are ineligible for the child credit.   And those who formerly had significant state tax and medical expenses to itemize.  

That chart doesn't tell us much.  Are these singles?  Married couples?  Any dependents?

I agree the chart does not say much, but I don't think there should be any losers in a tax bill advertised as the biggest tax cut in history.  

Share this post


Link to post
Share on other sites
6 minutes ago, tiger337 said:

I agree the chart does not say much, but I don't think there should be any losers in a tax bill advertised as the biggest tax cut in history.  

Generally the people paying the most tax to begin with get more in the way of cuts. That's just math. What are we supposed to do, give more massive refundable credits to people who don't pay hardly any tax anyway? 

The reason for a progressive tax system in the first place is to encourage people to actually succeed and want to make enough money to pay a good amount of tax. 

Share this post


Link to post
Share on other sites
12 minutes ago, stanpapi said:

 

The reason for a progressive tax system in the first place is to encourage people to actually succeed and want to make enough money to pay a good amount of tax. 

I think we have different definitions of success, but I not think anything about taxes is done to encourage people to succeed 

Share this post


Link to post
Share on other sites
6 minutes ago, tiger337 said:

I think we have different definitions of success, but I not think anything about taxes is done to encourage people to succeed 

You don't tax people when they're down before they've made it. Once they've made it, they pay taxes. 

Share this post


Link to post
Share on other sites
1 hour ago, tiger337 said:

I agree the chart does not say much, but I don't think there should be any losers in a tax bill advertised as the biggest tax cut in history.  

I want to know how they are ending up paying more tax, especially since the tax brackets are lower at all levels.  

Share this post


Link to post
Share on other sites

None of it really matters until the bill is final.  Either way, the chart is presumably a bunch of averages by income level. 

Share this post


Link to post
Share on other sites

At a higher level, given that the economy is currently robust and growing (as Stan often reminds us), is this really even the time for a big tax cut to begin with?

Share this post


Link to post
Share on other sites
2 minutes ago, mtutiger said:

At a higher level, given that the economy is currently robust and growing (as Stan often reminds us), is this really even the time for a big tax cut to begin with?

If you'd like to grow at more than 3+ percent some day....yeah. 

Share this post


Link to post
Share on other sites
2 minutes ago, mtutiger said:

At a higher level, given that the economy is currently robust and growing (as Stan often reminds us), is this really even the time for a big tax cut to begin with?

Good question.  Especially a drastic one like this one.  Of course, none of this is about growing the economy.  

Share this post


Link to post
Share on other sites
1 minute ago, tiger337 said:

Good question.  Especially a drastic one like this one.  Of course, none of this is about growing the economy.  

My point yesterday about double tax on corporate profits- you can't ignite an economy when corporate profits are taxed once at 35% at the corporate level and then another time at upwards of 44% at the individual level. That's been wrong for a long time. 

Share this post


Link to post
Share on other sites
8 minutes ago, stanpapi said:

My point yesterday about double tax on corporate profits- you can't ignite an economy when corporate profits are taxed once at 35% at the corporate level and then another time at upwards of 44% at the individual level. That's been wrong for a long time. 

Is that why the economy was so good during Clinton's presidency?  

Share this post


Link to post
Share on other sites

In a rational world, Kansas’ notorious experiment with radical business tax cuts, which came to a close this year after a half decade of disaster, would serve as a cautionary tale for the Republicans who are now attempting to pass their own tax bill through Capitol Hill—a historical example to be avoided at all costs.

Instead, they’re on the verge of repeating it, nearly step for step.

At this point, Kansas’ budget nightmares have become a part of public policy lore. In 2012, Gov. Sam Brownback attempted to turn his state into a conservative model for the nation by enacting a series of sweeping tax cuts. Most importantly, he entirely eliminated taxes on what are known as pass-through businesses—which around that time made up 94 percent of all U.S. firms and accounted for about half of the country’s business profits. Brownback insisted that the move would act “like a shot of adrenaline into the heart of the Kansas economy” and create “tens of thousands of new jobs.”

Pass-throughs are often misleadingly described as “small businesses” in order to justify lightening their tax loads. In reality, they’re simply firms like partnerships or S-corps that aren’t subject to the corporate tax rate. Instead, they pass profits through to their owners, who pay taxes on them on their personal returns (hence the name). They are often small—your corner bodega or pediatrician’s office is probably a pass-through—but can also be huge. The Trump Organization? Its various tentacles are organized as pass-throughs.

Suffice to say, cutting taxes on these businesses didn’t do Kansas’ economy much good. Instead of a jobs boom, the state found itself slogging through years of unimpressive growth and massive budget deficits as its tax base disappeared, forcing lawmakers to cut spending on public schools, colleges, Medicaid, and more. The state’s credit rating was humiliatingly downgraded. Eventually, legislators got fed up with the pain, and this year they finally voted to reverse the cuts, with Republicans joining Democrats to override Brownback’s veto.

In April, a group of economists took stock of the Kansas misadventure, using administrative tax data to figure out whether the cuts had done any good at all. In short, the researchers concluded, they had not. The main effect, it seemed, was that business owners relabeled some of their income as “profits” rather than wages in order to cut their tax bills. Business investment by passthroughs actually seemed to decline slightly.

If states are supposed to be the laboratories of democracy, then Kansas now looks like a blown-out chemistry workshop where some reckless kids got burned in a chemical fire. You would have to be blind to follow in its footsteps.

But that is exactly what Republicans have decided to do.

Republicans Are Getting Ready to Repeat Kansas’ Tax Cut Disaster

  • Like 1

Share this post


Link to post
Share on other sites
1 hour ago, stanpapi said:

You don't tax people when they're down before they've made it. Once they've made it, they pay taxes. 

But that isn't done to encourage people to succeed.

Share this post


Link to post
Share on other sites
14 minutes ago, chasfh said:

If states are supposed to be the laboratories of democracy, then Kansas now looks like a blown-out chemistry workshop where some reckless kids got burned in a chemical fire.

No need to bring Walt into it.

Share this post


Link to post
Share on other sites
16 minutes ago, chasfh said:

In a rational world, Kansas’ notorious experiment with radical business tax cuts, which came to a close this year after a half decade of disaster, would serve as a cautionary tale for the Republicans who are now attempting to pass their own tax bill through Capitol Hill—a historical example to be avoided at all costs.

Instead, they’re on the verge of repeating it, nearly step for step.

At this point, Kansas’ budget nightmares have become a part of public policy lore. In 2012, Gov. Sam Brownback attempted to turn his state into a conservative model for the nation by enacting a series of sweeping tax cuts. Most importantly, he entirely eliminated taxes on what are known as pass-through businesses—which around that time made up 94 percent of all U.S. firms and accounted for about half of the country’s business profits. Brownback insisted that the move would act “like a shot of adrenaline into the heart of the Kansas economy” and create “tens of thousands of new jobs.”

Pass-throughs are often misleadingly described as “small businesses” in order to justify lightening their tax loads. In reality, they’re simply firms like partnerships or S-corps that aren’t subject to the corporate tax rate. Instead, they pass profits through to their owners, who pay taxes on them on their personal returns (hence the name). They are often small—your corner bodega or pediatrician’s office is probably a pass-through—but can also be huge. The Trump Organization? Its various tentacles are organized as pass-throughs.

Suffice to say, cutting taxes on these businesses didn’t do Kansas’ economy much good. Instead of a jobs boom, the state found itself slogging through years of unimpressive growth and massive budget deficits as its tax base disappeared, forcing lawmakers to cut spending on public schools, colleges, Medicaid, and more. The state’s credit rating was humiliatingly downgraded. Eventually, legislators got fed up with the pain, and this year they finally voted to reverse the cuts, with Republicans joining Democrats to override Brownback’s veto.

In April, a group of economists took stock of the Kansas misadventure, using administrative tax data to figure out whether the cuts had done any good at all. In short, the researchers concluded, they had not. The main effect, it seemed, was that business owners relabeled some of their income as “profits” rather than wages in order to cut their tax bills. Business investment by passthroughs actually seemed to decline slightly.

If states are supposed to be the laboratories of democracy, then Kansas now looks like a blown-out chemistry workshop where some reckless kids got burned in a chemical fire. You would have to be blind to follow in its footsteps.

But that is exactly what Republicans have decided to do.

Republicans Are Getting Ready to Repeat Kansas’ Tax Cut Disaster

Good story, but hopefully you copy and pasted this and didn't waste your time actually typing all that out.

The highlighted item above was specifically dealt with in both the house and senate bills.There are provisions to make sure people don't play games by recharacterizing wages to profits to avoid a higher tax.

Additionally, after the bill is signed, there will also likely be a technical corrections bill to fix anything that was missed. And likely also subsequent regulations to provide interpretations of the new bill. 

Translation: not the same issue as Kansas. 

 

Share this post


Link to post
Share on other sites

It appears as though the issue at the lowest income levels is that the child credit would no longer be refundable.    That should never have been the case to start with, imo. 

Share this post


Link to post
Share on other sites
1 hour ago, Melody said:

It appears as though the issue at the lowest income levels is that the child credit would no longer be refundable.    That should never have been the case to start with, imo. 

Yes, checks for nothing is never good policy, in my view. 

Just wanted to point out an area where we can agree.

Share this post


Link to post
Share on other sites
3 hours ago, stanpapi said:

If you'd like to grow at more than 3+ percent some day....yeah. 

because that's the effect of tax cuts

 

Share this post


Link to post
Share on other sites
1 hour ago, stanpapi said:

Yes, checks for nothing is never good policy, in my view. 

Just wanted to point out an area where we can agree.

To be clear, I don't necessarily object to helping low income families. I just believe that it needs to be done through various social services and not a lump sum "refund," check via the IRS to people who have paid no taxes.  

Share this post


Link to post
Share on other sites
2 minutes ago, Melody said:

To be clear, I don't necessarily object to helping low income families. I just believe that it needs to be done through various social services and not a lump sum "refund," check via the IRS to people who have paid no taxes.  

Agree, I should have said "tax policy". 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×