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Re: "The Cut Cut Cut! Act" (Tax Reform) [Moonrocket] [ In reply to ]
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Moonrocket wrote:
torrey wrote:
If we change things to remove social engineering from government revenue generation there will be some losers. Lump large families, home owners, high tax states and electric car buyers in with charities. Phasing it in over a decade will avoid shocks but it will still hurt.

And people with massive medical bills.

This is the cruelest cut.

Yea people like me who have the misfortune of getting Cancer will have to file bankruptcy or lose everything they have.
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Re: "The Cut Cut Cut! Act" (Tax Reform) [torrey] [ In reply to ]
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torrey wrote:
I agree something needs to be done about that. Medical bills aren't social engineering. But that solution should really should come out of a health care bill not a tax bill.

Pulling the rug out from under people in the mean time seems cruel and disruptive.

This deduction was created during WWII and we’re just going to stop it with an empty promise to fix it in a healthcare bill?
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Re: "The Cut Cut Cut! Act" (Tax Reform) [torrey] [ In reply to ]
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But that solution should really should come out of a health care bill not a tax bill.

Should a tax "reform" bill simply have a built-in $1.5T expansion of the deficit? (under the most optimistic scenarios)
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Re: "The Cut Cut Cut! Act" (Tax Reform) [Moonrocket] [ In reply to ]
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Moonrocket wrote:
blueraider_mike wrote:
oldandslow wrote:
Yes, but the 401K deduction allows married couples to deduct 48K/year (over 50 years old), which is a single income earner penalty. This stuff is embedded everywhere. Additionally "Marriage penalty" would be far more accurately termed "two income family penalty". a single income earner gets a huge tax benefit by hitching up.


What about homes that have only one earner...? My wife stays home and has till now, not sure what she will do with all kids in college. I can't deduct 48K in 401K because she doesn't work. Yet she will need to eat when I retire, so this is penalty on families like ours. This is another reason why all deductions and credits need to go.


Well, how do you balance that against the spouse treatment for SS? You pay in the same as a single person and get 1.5x the benefits?

I don't balance it, I agree, its wrong. I have pointed out multiple examples you are just looking at one. All these deductions end up with lobbyists and folks that simply can't live without them - I call BS on all of it. SSI and Medicare and how they are funded should be changed.

Pick a way to tax, either income or Sales tax. Then eliminate ALL deductions and credits. Lets get some transparency into who pays and what they pay. But here is the big problem and the lie - the middle class is the one getting the majority of the benefit. You get married and have a couple of kids and buy a home you pay next to NOTHING. I used an example from 4 years ago where I had a down year but still made over 100K - I ended up paying a 2% effective tax because of all the goodies.
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Re: "The Cut Cut Cut! Act" (Tax Reform) [blueraider_mike] [ In reply to ]
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Pick a way to tax, either income or Sales tax....

WRONG. I get the "let's get simple" approach, but let's not get stupid. If one places the entire tax burden on one single area, one massively incentivizes tax avoidance in another area. Extremely high individual rates? Go corporate/pass-through (or off-shore). Sales tax? Black market! etc. There is a positive approach to having several smaller revenue streams to reduce the incentive for tax avoidance. That doesn't mean that there shouldn't be more transparency.

Regarding middle class tax levels, I agree, but you did pay payroll tax on that 100K, right? That matters, and cannot be ignored.
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Re: "The Cut Cut Cut! Act" (Tax Reform) [oldandslow] [ In reply to ]
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oldandslow wrote:
There is a positive approach to having several smaller revenue streams to reduce the incentive for tax avoidance.


There is another positive aspect in that it doesn't make government revenue highly sensitive to fluctuations in any one area of the economy.

Those states whose revenue depended highly on sales tax experienced a lot of drama during the Great Recession as sales volume decreased but government expenditures remained relatively constant (or even increased with jobless claims). Those that depended on a mixture of property tax, income tax, and sales tax tended to have smoother sailing.

(I have no proof of this on hand, but have read it in several places.)
Last edited by: trail: Nov 3, 17 18:50
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Re: "The Cut Cut Cut! Act" (Tax Reform) [oldandslow] [ In reply to ]
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“It’s a layup,” Rep. Kevin Cramer (R-N.D.)


(Referring to how easy it's going to be to pass the bill.)

Really, dude? That's just giving locker room bulletin board material to the legions of swamp creatures about to crawl out of the swamp to try to carve out their own precious hunks of meat. Not to mention since now there's news that Trump has been lobbying to use the tax bill to kill "ObamaCare" that will reduce the likelihood of a single Democrat crossing the aisle, meaning the Senate will be at its very narrow margin of 2. Which we've seen is no sure thing.
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Re: "The Cut Cut Cut! Act" (Tax Reform) [oldandslow] [ In reply to ]
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oldandslow wrote:
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Pick a way to tax, either income or Sales tax....


WRONG. I get the "let's get simple" approach, but let's not get stupid. If one places the entire tax burden on one single area, one massively incentivizes tax avoidance in another area. Extremely high individual rates? Go corporate/pass-through (or off-shore). Sales tax? Black market! etc. There is a positive approach to having several smaller revenue streams to reduce the incentive for tax avoidance. That doesn't mean that there shouldn't be more transparency.

Regarding middle class tax levels, I agree, but you did pay payroll tax on that 100K, right? That matters, and cannot be ignored.

I am not unreasonable...I can live with different streams, if they can be much more transparent. We could move to a national sales tax to cover Medicare and SSI and replace FICA taxes.

Not to change the subject, but this really is about income inequality, which in my mind is more a function of a modern economy with technology destroying many middle income jobs - but one half of the country simply has to have a villain - rich folks and its not about how they use the tax code its becoming more about how the poor and middle class use the code to pay little to no taxes.
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Re: "The Cut Cut Cut! Act" (Tax Reform) [blueraider_mike] [ In reply to ]
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I'm not a tax expert (though I think my wife and pay too much ;-), but it looks to me like almost everyone's going to have some skin in the tax game if this proposal can make it to the Orange-Haired Wonder's desk. Most of the sacred tax cows are going to be slaughtered or at least somewhat injured, in other words. These sacred cows all were born as the result of the progressive tax system we now have and the way in which it practically encourages carveouts and exemptions.

Like I've said: I'd like to see a Flat Tax or a Fair Tax. Obviously, that's not going to happen and this tax reform proposal is probably the best bet to get some actual reform of the tax system in place, something that's sorely needed.

We make too much income, the wife and I, at present to qualify to use it -- but I'd love to see the day when our tax filing requires only a postcard-sized form to complete.

"Politics is just show business for ugly people."
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Re: "The Cut Cut Cut! Act" (Tax Reform) [big kahuna] [ In reply to ]
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big kahuna wrote:
These sacred cows all were born as the result of the progressive tax system we now have and the way in which it practically encourages carveouts and exemptions.


The proposed plan is still very much progressive.

And sales taxes have plenty of their own carveouts. I'm not sure how one encourages that over any other plan.
Last edited by: trail: Nov 4, 17 7:28
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Re: "The Cut Cut Cut! Act" (Tax Reform) [blueraider_mike] [ In reply to ]
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blueraider_mike wrote:
sslothrop wrote:
blueraider_mike wrote:


AND/OR you have to grow the economy which is one of the goals of this tax reform plan.

Don't buy into the lie.


So, we're going to borrow our way to prosperity?

And you are not paying attention to what I am saying. You cannot take one statement I said without looking at all I have said on this issue...and this is why our country is so fucked.

Your right, what we actually need to do is increase taxes and increase complexity - that will fix out problems.

Ok, what parts of the plan are going to grow the economy?

“Read the transcript.”
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Re: "The Cut Cut Cut! Act" (Tax Reform) [trail] [ In reply to ]
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trail wrote:
big kahuna wrote:
These sacred cows all were born as the result of the progressive tax system we now have and the way in which it practically encourages carveouts and exemptions.


The proposed plan is still very much progressive.

Absolutely no argument there.

And sales taxes have plenty of their own carveouts. I'm not sure how one encourages that over any other plan.

Also 100-percent right about this one. Some include exemptions for so-called "necessities" and whatnot. Then there's the matter of making sure businesses collect and then remit taxes.

"Politics is just show business for ugly people."
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Re: "The Cut Cut Cut! Act" (Tax Reform) [big kahuna] [ In reply to ]
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Looks like some colleges -- those with endowments greater than $100,000 per student... about 140 in total -- would be subject to a 1.4% tax on investment income. Stand by for a lot of squealing from much of the Ivy League. ;-)

“Deep within the plan — look here, on Page 75 — is the language that spells out which institutions would be affected. The bottom line: Only the most-affluent colleges need worry. Colleges would be subject to the tax, set at 1.4 percent of net investment income, only if their endowment assets total at least $100,000 per student.”

TaxProf Blog

"Politics is just show business for ugly people."
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Re: "The Cut Cut Cut! Act" (Tax Reform) [big kahuna] [ In reply to ]
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Yep, there are a lot of bizarre "let's NOT simplify the tax code after all" things buried on there. Why is that there?

What will be louder, the squealing of some universities, or the deafening silence of folks who endlessly ride the high horse of "fair tax"? It seems like the goals of hitting major cut-offs for the super-wealthy (raise 39.6% rate to 1M, 20% corporate rate, ending estate tax, $1.5T deficit) creates a need to claw back revenue. Virtually all middle-class gains are funded by the increased debt.

Some analysis from Forbes:

"The analysis, issued today by the Tax Policy Center (a joint venture of the Urban Institute & Brookings Institution) projects that over the next decade the Trump/GOP plan would actually increase taxes on non-business individual income by $470 billion, while reducing taxes on business income by $2.6 trillion, and federal receipts from estate and gift taxes by $200 billion.

In dollar terms, 53% of the cut would go to the top 1% and 30% to the top 0.1% (those with expanded cash income of $3.4 million or more). Put another way, the top 1% would see an average $129,030 tax cut and the top 0.1% would save an average of $722,510, while those in the middle quintile would save an average of $660 per family.

Meanwhile, 12% of taxpayers—and more than a third of those making between $150,000 and $300,000 ---would pay more in 2018"
Last edited by: oldandslow: Nov 4, 17 8:45
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