Trump's Proposed Tax Plan

[jllundqu]

https://www.consumeraffairs.com/news/trumps-tax-plan-cuts-rates-removes-some-deductions-042617.html


President Trump is unveiling a tax reform plan that would sharply cut taxes for businesses as well as most individual taxpayers. In perhaps the most far-reaching proposal for individuals, Trump wants to eliminate the federal deduction for state and local taxes.

This wouldn't mean much to residents of states like Nevada that don't have a state income tax, but it would take a big bite out of taxpayers from New York, New Jersey, California, and other high-tax states, many of which are Democratic.

But while the local tax deduction would go away, Trump proposes to double the standard deduction for everyone. The top tax rate for individuals would fall from today's 39.6% to 35%. There would be lower rates of 10% and 25% for those with lower incomes.

The estate tax and alternative minimum tax -- which often snares high-income taxpayers who take a lot of deductions -- would both be eliminated.

Effect on real estate

Real estate interests were earlier concerned that Trump would eliminate the deduction for mortgage interest. But even without that, doubling the standard deduction and cutting tax rates might make the mortgage deduction less valuable, thereby reducing consumers' inclination to go into debt to buy a home.

Businesses would get a hefty helping of tax relief. The corporate tax rate would be more than halved, dropping to 15% from 35%, and most foreign profits would not be taxed, as is the case in most countries.

The tax rate on business income that "flows through" to individual returns from LLCs, Subchapter S corporations, and similar corporate entities would also drop to 15% instead of being taxed at individual tax rates.

The stated goal, of course, is to stimulate growth of the economy, but the many tax cuts would also increase the deficit, which may spark opposition from more conservative members of Congress.

“It’s our intention to create a huge tax cut and equally as important, a huge simplification of the tax system in America,” said Gary Cohn, the director of Trump’s National Economic Council, in a briefing to a small group of reporters today, the Wall Street Journal reported.

But skeptics say it won't be that easy.

“Trump's proposal to cut corporate tax rates won't boost growth or create jobs," said Marshall Steinbaum, Senior Economist and Fellow at the Roosevelt Institute. "In fact, it will discourage corporate investment, as corporations and their shareholders earn even higher profits and pocket more of the cash -- just like they did last time we tried a big corporate tax cut."

If Trump wants to encourage investment, Steinbaum said, "He should close loopholes that CEOs exploit to move profits offshore and increase the effective tax rate on corporations, their CEOs, and their shareholders.”


So basically they would go from 7 tax brackets to 3: 35%, 25%, and 10% (although they don't say what income levels trigger each bracket)... eliminates Alt Min and Death Tax, cuts Corp Tax rate to 15%... doubles the standard deduction, which would reduce taxes (or increase your tax return) by a lot... not sure if this tax plan keeps the mortgage interest deduction as I've read differing accounts.

It's definitely a step in the right direction. I'm pretty sure I'd be in the 10% category, especially with the doubling of the standard deduction to $24,000 for AGI.

I'd support this. Not my ideal tax plan, but shit I'd go for this in a heartbeat.

[Origanalist]

“Trump's proposal to cut corporate tax rates won't boost growth or create jobs," said Marshall Steinbaum, Senior Economist and Fellow at the Roosevelt Institute. "In fact, it will discourage corporate investment, as corporations and their shareholders earn even higher profits and pocket more of the cash -- just like they did last time we tried a big corporate tax cut."


Bite me Marshall.

[Zippyjuan]

Congress will have to agree and pass his suggestions. Only they can write changes in tax laws. It does lack detail (like where the lines would be drawn for his proposed reductions).

https://www.nytimes.com/2017/04/26/upshot/winners-and-losers-in-the-trump-tax-plan.html?_r=0


Winners and Losers in the Trump Tax Plan

The tax plan the Trump administration released Wednesday consists (so far) of a single page of bullet points.

If this were a more rounded plan, we could wait for the tax wonks at various think tanks to run it through their models and tell with some precision how it would affect people at different income levels and who would benefit from different deductions.

Lacking that level of detail, we can know only in broad-brush strokes which Americans would win and which would lose. In a homage to the Trump plan itself, here are those winners and losers in bulleted form.

Winners

■ Businesses with high tax rates. The plan would cut the 35 percent corporate income tax to 15 percent. While few businesses pay the full 35 percent rate, those that pay something close to it are in line for a huge tax cut.

■ High-income earners. The plan would reduce the top rate on individual income tax — now 39.6 percent for income over around $470,000 for a married couple — to 35 percent. But that’s only part of the gain for high-income earners. It also would eliminate a 3.8 percent tax, used to help fund Obamacare, that applies to investment income over $250,000 for a couple.

■ People with creative accountants. The 15 percent business tax rate could open a huge loophole for people to receive business income through a limited liability company or other pass-through entity instead of as wages. Depending on how the law is drafted, that could enable some people to pay that low 15 percent rate on their earnings instead of an individual income rate up to 35 percent. People who already receive their income through investment vehicles wouldn’t have to change anything for a windfall.

■ Multimillionaires who want to pass money to their heirs tax-free. The plan would eliminate the estate tax, which currently applies to individuals with estates of $5.5 million or couples with estates worth $11 million.

■ People who still fill out their tax returns by hand. Administration officials said the plan would simplify paying taxes, particularly emphasizing plans to eliminate the alternative minimum tax. The A.M.T. can definitely be annoying, and costly, but if you use an online tax preparation service, the software does most of the work.

■ Retailers and other companies that feared a “border adjustment tax.” The Trump administration did not embrace House Republicans’ big strategy to pay for the tax cut, which was strongly opposed by the retail industry and others that thought they would be losers.

■ Donald J. Trump. It is striking how many of the categories listed above affect the president and his family. He is a high-income earner. He receives income from 564 business entities, according to his financial disclosure form, and could take advantage of the low rate on “pass-through” companies. According to his leaked 2005 tax return, he paid an extra $31 million because of the alternative minimum tax that he seeks to eliminate. And his heirs could eventually enjoy his enormous assets tax-free.

Losers

■ Upper-middle-income people in blue states. The plan would eliminate the federal tax deduction for state and local income tax. If you are in a place where such taxes are high, like New York or California, you would lose a valuable deduction.

■ Deficit hawks. The Trump plan doesn’t come with any estimates of its impact on the federal deficit. But his campaign plan, to which the new document is distinctly similar, was estimated by the analysts at the Tax Policy Center to reduce federal revenue by $6.2 trillion over a decade. That implies either a very large increase in the national debt or huge reductions in federal spending.

■ People who want Congress to pass something. While the Trump plan solves some of the policy contradictions of his earlier promises with a “candy for everyone” approach to cutting taxes, that leaves it with even bigger political contradictions. The plan’s tilt toward businesses and the affluent means that Democratic support will be scarce to nonexistent. A law passed via the Senate’s budget reconciliation process — preventing a filibuster by Democrats and allowing a narrow majority of Republicans to prevail — is not permitted to increase the deficit beyond a 10-year window. That means the major provisions would probably have to be temporary. Even if adjusted to be temporary, the presence of deficit hawks among Republicans would make the Trump plan no slam dunk to pass.

[jllundqu]

Question for you Zippyjuan :

Is all money inherently the government's money? The tone of your posts on economic matters suggests you think that all money is 'spoken for' already by the government and it's by the good graces of the State that they let us poor citizens keep a portion of it.

I don't give a good god damn about 'lost revenue.' It's not the god damned government's money. It's the PEOPLE's money. If letting people keep more of THEIR PROPERTY AND DOLLARS is too much for poor old uncle sam to handle... might I suggest that GOVERNMENT IS TOO FUCKING BIG and they should cut spending by trillions, not search for more of MY property to fund their bullshit statist fantasies like endless war, the MIC, endless welfare, etc.

[CPUd]

857667765997637633
https://twitter.com/FoxNews/status/857667765997637633

[Zippyjuan]

Question for you Zippyjuan :

Is all money inherently the government's money? The tone of your posts on economic matters suggests you think that all money is 'spoken for' already by the government and it's by the good graces of the State that they let us poor citizens keep a portion of it.

I don't give a good god damn about 'lost revenue.' It's not the god damned government's money. It's the PEOPLE's money. If letting people keep more of THEIR PROPERTY AND DOLLARS is too much for poor old uncle sam to handle... might I suggest that GOVERNMENT IS TOO $#@!ING BIG and they should cut spending by trillions, not search for more of MY property to fund their bull$#@! statist fantasies like endless war, the MIC, endless welfare, etc.

The proposed tax cuts do not address the issue of "is government too big". It ignores that while increasing the need for the government to borrow more money. Trump is saying we can have lots of government spending and it won't hurt you a bit. The average income tax filer will not have their taxes reduced by the proposed new taxes (about half of all income tax filers didn't owe any income taxes) and the level of government won't be reduced.

[specsaregood]

So this plan would eliminate property tax deductions? Great, make it even more expensive for the middle class to "own" property, we can't have that.

[TheCount]

857667765997637633
https://twitter.com/FoxNews/status/857667765997637633Only liberals say things like that. (http://www.ronpaulforums.com/showthread.php?510096-Are-tax-cuts-without-reduced-spending-a-good-thing&p=6459036&viewfull=1#post6459036)

[oyarde]

So this plan would eliminate property tax deductions? Great, make it even more expensive for the middle class to "own" property, we can't have that.

I oppose most tax plans I read . Many for this .

[oyarde]

I even think I should get to vote in all counties I pay property tax in if I would like to .

[wizardwatson]

Trump Tax Plan: Just Print Money

http://www.cnn.com/2016/05/09/politics/donald-trump-national-debt-strategy/

...been public knowledge for some time.

What is the point in analyzing winners and losers? If you don't decrease spending, a tax cut is just a move towards more regressive inflation taxation. "Stealing from poor people" as Ron calls it.

[harikaried]

So this plan would eliminate property tax deductions? Great, make it even more expensive for the middle class to "own" property, we can't have that."More expensive" is probably not accurate for most people in that the doubled standard deduction will more than cover the elimination of the deduction unless one has a very expensive house. The average property tax is around 1%, and the doubled standard deduction for married is an extra $12,700, so those with houses less than $1.27 million would be paying less income tax. However, it would remove this additional incentive of reduced property taxes for purchasing a home.

[NorthCarolinaLiberty]

The proposed tax cuts do not address the issue of "is government too big".

You did not answer his question. Neg rep for you dodge. And many others, btw.

[specsaregood]

"More expensive" is probably not accurate for most people in that the doubled standard deduction will more than cover the elimination of the deduction unless one has a very expensive house. The average property tax is around 1%, and the doubled standard deduction for married is an extra $12,700, so those with houses less than $1.27 million would be paying less income tax. However, it would remove this additional incentive of reduced property taxes for purchasing a home.

it occurs to me that the property tax change would affect blue states more than red states overall. For me, in my modest little house the net effect would be about zero for an individual; but our property tax rate is closer to 3% and property here costs a lot more.

[Zippyjuan]

Is this part of Trump keeping his plan to raise the US deficit to $24 trillion? "We will be there soon".


You know, we're at $18 trillion now. We're soon going to be at $20 trillion. According to the economists (who I'm not big believers in but nevertheless, this is what they're saying) that $24 trillion (we're very close) - that's the point of no return. $24 trillion. We will be there soon.

No mention of his "border adjustment tax" in the "new plan". Is that idea now dead?


https://www.youtube.com/watch?v=gR6RCJqmCxM

[Occam's Banana]

“Trump's proposal to cut corporate tax rates won't boost growth or create jobs," said Marshall Steinbaum, Senior Economist and Fellow at the Roosevelt Institute. "In fact, it will discourage corporate investment, as corporations and their shareholders earn even higher profits and pocket more of the cash -- just like they did last time we tried a big corporate tax cut."
Bite me Marshall.

I can't help but wonder what this guy thinks corporations and shareholders do with their profits and cash. Dump it all in a pit and set it on fire?

[Zippyjuan]

I can't help but wonder what this guy thinks corporations and shareholders do with their profits and cash. Dump it all in a pit and set it on fire?

Don't expect much of it to be passed along in the form of lower prices or higher wages. Trickle down has not worked in the past.

[NorthCarolinaLiberty]

Trickle down has not worked in the past.


Right, because a guy turning a better profit this year never gives his employees a raise or a bonus. He'll never invest in another store.

[Zippyjuan]

Right, because a guy turning a better profit this year never gives his employees a raise or a bonus. He'll never invest in another store.

Executives will get nice bonuses and the stock holders will get more money. The average worker will get scraps.

http://dailybail.com/storage/chart-corporate-profits-employee-wages.jpg?__SQUARESPACE_CACHEVERSION=1318432887443

[NorthCarolinaLiberty]

Those are both going up. If trickle down did not work, then the red line would be going down.


Executives will get nice bonuses and the stock holders will get more money. The average worker will get scraps.

http://dailybail.com/storage/chart-corporate-profits-employee-wages.jpg?__SQUARESPACE_CACHEVERSION=1318432887443

[NorthCarolinaLiberty]

Executives will get nice bonuses and the stock holders will get more money. The average worker will get scraps.



Is there anything preventing the average worker from becoming an executive, getting a bonus, or becoming a stockholder?

[Zippyjuan]

Those are both going up. If trickle down did not work, then the red line would be going down.

If trickle down worked, they would both be moving up at the same rate. Wages have not kept up with corporate profits. Nor have they kept up with productivity.
https://systemicdisorder.files.wordpress.com/2014/09/productivity-chart-1948-2013.png?w=640&h=412

[NorthCarolinaLiberty]

If trickle down worked, they would both be moving up at the same rate.


According to your own definition.

[devil21]

Question for you Zippyjuan :

Is all money inherently the government's money? The tone of your posts on economic matters suggests you think that all money is 'spoken for' already by the government and it's by the good graces of the State that they let us poor citizens keep a portion of it.

I don't give a good god damn about 'lost revenue.' It's not the god damned government's money. It's the PEOPLE's money. If letting people keep more of THEIR PROPERTY AND DOLLARS is too much for poor old uncle sam to handle... might I suggest that GOVERNMENT IS TOO FUCKING BIG and they should cut spending by trillions, not search for more of MY property to fund their bullshit statist fantasies like endless war, the MIC, endless welfare, etc.

Come on. The money says who owns it right on it! You are allowed to use it, subject to a somewhat voluntary use tax called "income tax". Under the banker's system you own NOTHING, because you can not pay for anything. You can not use debt to pay debt. You only hold equitable (user) title to anything but you do not hold legal (ownership) title to anything. Get it?

I'm not defending Zippy. Rather I am telling you the reality of the system. Zippy knows this to be true but will never admit it.

[NorthCarolinaLiberty]

Wages have not kept up with corporate profits. Nor have they kept up with productivity.



So?

[Zippyjuan]

According to your own definition.

What is your definition?

https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572


Definition: Trickle-down economics is a theory that says benefits for the wealthy trickle down to everyone else. These benefits are usually tax cuts on businesses, high-income earners, capital gains and dividends.

Trickle-down economics assumes investors, savers and company owners are the real drivers of growth. They use any extra cash from tax cuts to expand businesses. Investors buy more companies or stocks.

Banks increase business lending. Owners invest in their operations and hire workers. These workers spend their wages, driving demand and economic growth.

Benefits to the wealthy tend to stay with the wealthy.

[Occam's Banana]

Don't expect much of it to be passed along in the form of lower prices or higher wages. Trickle down has not worked in the past.

I didn't say I expected anything. I was wondering about what HE (Marshall) expected.

Nor did I say anything about "trickle down" working or not. I merely expressed curiosity as to what he imagines they do with that money (and why that is somehow any different from or doesn't have any of the effects that occur when others do whatever it is they do with their money - such spend or save or invest or etc.).

Do they dump it all in a pit and set it on fire? No? What, then? :confused:

[NorthCarolinaLiberty]

What is your definition?



You said it's not trickling down, but those wage lines are up.

[CCTelander]

I can't help but wonder what this guy thinks corporations and shareholders do with their profits and cash. Dump it all in a pit and set it on fire?


And then they roast infants over those fires to be consumed during their hedonistic pagan rituals. Profit is bad, m'kay?

What a putz.

[Occam's Banana]

If trickle down worked, they would both be moving up at the same rate.

By the very definition of "trickle down" that you yourself supply (see below), that ^^^^^ is a non sequitur.


What is your definition?

https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572


Definition: Trickle-down economics is a theory that says benefits for the wealthy trickle down to everyone else. These benefits are usually tax cuts on businesses, high-income earners, capital gains and dividends.

Trickle-down economics assumes investors, savers and company owners are the real drivers of growth. They use any extra cash from tax cuts to expand businesses. Investors buy more companies or stocks.

Banks increase business lending. Owners invest in their operations and hire workers. These workers spend their wages, driving demand and economic growth.

Benefits to the wealthy tend to stay with the wealthy.

There is nothing in that defintion that states or even implies that both would have to be "moving up at the same rate" in order for "trickle down" to work.

[eleganz]

Heard Corey Booker on radio saying how badly this tax proposal would hurt lower class Americans, laughed out loud.

[TheTexan]

“Trump's proposal to cut corporate tax rates won't boost growth or create jobs," said Marshall Steinbaum, Senior Economist and Fellow at the Roosevelt Institute. "In fact, it will discourage corporate investment, as corporations and their shareholders earn even higher profits and pocket more of the cash -- just like they did last time we tried a big corporate tax cut."

Ya, fuck corporations. All they do is fuck over the little guy.

BRB gonna go grab me another Bud Lite

[KrokHead]

I'd support this. Not my ideal tax plan, but $#@! I'd go for this in a heartbeat.

Trump is a fool and I have no idea (rhetoric, deceit spending!) how such a sweet tax plan is going to be paid for but it's a HUGE step in the right direction. Hopefully Americans get used to having their own money and won't tolerate an increase in entitlements.

[Danke]

Ya, fuck corporations. All they do is fuck over the little guy.

BRB gonna go grab me another Bud Lite

Yep, they will just pocket the cash and not let government redistribute it to more worthy causes. Their competition will meanwhile reinvest and grow until they put these greedy corporations out of business and disrupt they lives of thousands if not millions. We need more taxes and intervention to prevent this.

[KrokHead]

Heard Corey Booker on radio saying how badly this tax proposal would hurt lower class Americans, laughed out loud.

Ignorant tools believe this. It's pretty much a huge handout to everyone, with of course the rich getting the most profound handout. My family would hypothetically come out 3 to 5 thousand ahead.



■ Upper-middle-income people in blue states. The plan would eliminate the federal tax deduction for state and local income tax. If you are in a place where such taxes are high, like New York or California, you would lose a valuable deduction.

It's these turd goblins who feel little about yanking my money that way someone who barely or doesn't work has virtually the same standard of living as me.

[Origanalist]

https://www.youtube.com/watch?v=sXe5sWVITNg

[kcchiefs6465]

The stated goal, of course, is to stimulate growth of the economy, but the many tax cuts would also increase the deficit, which may spark opposition from more conservative members of Congress.
How about you cut the spending too?

The 'more conservative' would cover Trump's unapologetically deficit/spend happy ass.

It's surprising yet unsurprising that the so called conservatives can't pinch pennies when the rubber hits the road.

ETA: Or is unsurprising yet surprising?

Or are they all whores who ought get real goddamn jobs?

Stay tuned for more Trump raping freedom.

[otherone]

Heard Corey Booker on radio saying how badly this tax proposal would hurt lower class Americans, laughed out loud.

There will be consequences if EIC is eliminated.

[specsaregood]

Heard Corey Booker on radio saying how badly this tax proposal would hurt lower class Americans, laughed out loud.

As I mentioned this, this proposed plan hurts or helps less in the blue states with high property tax rates, eg: NJ where Booker is the Senator.

[Brian4Liberty]

The talking heads on TV (i.e. Wall St, establishment propagandists) keep saying how this will increases wages for everyone! Really? So, if an entity brings in more money, that means they will just offer to pay more for things? "That big screen TV was $2000 yesterday, but we get a tax break, so we'll go ahead and pay $2300 today." The supply and demand (and easy access) equation does not change just because a person or company got a tax break.