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Trump's Full Court Press on Tax Reform

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Trump's Full Court Press on Tax Reform

Post by stessier » Wed Sep 27, 2017 11:37 am

I suspect this will be worthy of it's own thread. The GOP released details of the plan today.

Some income tax specifics
  • Reduce individual income tax rates: The framework shrinks the number of tax rates to just three from seven today. The proposed rates are 12%, 25% and 35%. But it will be up to the tax committees to assign income ranges to each rate.
  • Increase standard deduction: The plan doubles the standard deduction, to $24,000 for married couples and $12,000 for single filers.
  • Get rid of valuable tax breaks: The framework proposes the elimination of most itemized deductions, including the state and local tax deduction.
    It also eliminates personal exemptions, worth $4,050 per person. So a family of four could no longer reduce their taxable income by more than $16,000.
  • Preserve some deductions: Again without specifics, the framework calls for lawmakers to retain tax incentives for home ownership, retirement savings, charitable giving and higher education.
  • Repeal the Alternative Minimum Tax:
  • Kill the estate tax
There are a bunch of business specifics at the link as well.

How in the world are they going to pay for this?
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Re: Trump's Full Court Press on Tax Reform

Post by Unagi » Wed Sep 27, 2017 11:40 am

Mexico?

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Re: Trump's Full Court Press on Tax Reform

Post by El Guapo » Wed Sep 27, 2017 11:44 am

The political impact of proposing to lower the highest tax rate, repeal the AMT and estate tax, and raise the lowest tax rate will be something to behold.

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Re: Trump's Full Court Press on Tax Reform

Post by Smoove_B » Wed Sep 27, 2017 11:58 am

stessier wrote:[*]Get rid of valuable tax breaks: The framework proposes the elimination of most itemized deductions, including the state and local tax deduction.
Ah. I see war has been declared on NJ. Good luck with that one.

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Re: Trump's Full Court Press on Tax Reform

Post by RunningMn9 » Wed Sep 27, 2017 11:59 am

El Guapo wrote:The political impact of proposing to lower the highest tax rate, repeal the AMT and estate tax, and raise the lowest tax rate will be something to behold.
The problem (for those making the proposal) is that they are likely reducing taxes on the lower income side of things - but they are going to have to explain math to show that (raising the rate, but doubling the deduction almost certainly lowers the effective tax rate).

Right now, I am able to exist because NJ State Income tax, my stupid goddamn NJ Property Tax, and my stupid goddamn NJ house mortgage interest deductions prevent me from getting fisted by the Feds as well. If that goes away, shit's gonna be unpleasant.
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Re: Trump's Full Court Press on Tax Reform

Post by Kraken » Wed Sep 27, 2017 12:03 pm

stessier wrote:
How in the world are they going to pay for this?
Magical economic growth! Or deficits. Definitely one or the other.

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Re: Trump's Full Court Press on Tax Reform

Post by stessier » Wed Sep 27, 2017 12:21 pm

Kraken wrote:
stessier wrote:
How in the world are they going to pay for this?
Magical economic growth! Or deficits. Definitely one or the other.
:lol:
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Re: Trump's Full Court Press on Tax Reform

Post by NickAragua » Wed Sep 27, 2017 12:36 pm

This is great though, because, before, the Trump policies were just for black or brown people (health care excluded). Now, they're going to hit regular white people right in the wallet (I personally estimate that, should this "tax proposal" go through, it will be going directly through my colon with no lube and a retractable baton). Now if my extra tax money was going to go to something useful like research funding or testicle sandpaper subsidies, I could be ok with it. But it's probably going to go directly into the pockets of Trump and his golfing buddies.

I bet Joe Average is going to be real happy when his tax return comes back with "you owe us money".

Well, guess what, you vote for a numbnuts, you get numb nuts.

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Re: Trump's Full Court Press on Tax Reform

Post by Carpet_pissr » Wed Sep 27, 2017 1:49 pm

stessier wrote:
  • Reduce individual income tax rates: The framework shrinks the number of tax rates to just three from seven today. The proposed rates are 12%, 25% and 35%. But it will be up to the tax committees to assign income ranges to each rate.
  • Increase standard deduction: The plan doubles the standard deduction, to $24,000 for married couples and $12,000 for single filers.
  • Get rid of valuable tax breaks: The framework proposes the elimination of most itemized deductions, including the state and local tax deduction.
    It also eliminates personal exemptions, worth $4,050 per person. So a family of four could no longer reduce their taxable income by more than $16,000.
  • Preserve some deductions: Again without specifics, the framework calls for lawmakers to retain tax incentives for home ownership, retirement savings, charitable giving and higher education.
  • Repeal the Alternative Minimum Tax:
  • Kill the estate tax
I suspect they know they won't get most of those items. Given the political and longstanding teeth-gnashing regarding the last item, if they get that, they would be pleased. Especially given their astonishing lack of ability to pass a damn thing, recently. Would be a huge win for them, given the current dysfunction.

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 1:53 pm

Smoove_B wrote:
stessier wrote:[*]Get rid of valuable tax breaks: The framework proposes the elimination of most itemized deductions, including the state and local tax deduction.
Ah. I see war has been declared on NJ. Good luck with that one.
I suspect this plan will change most here - it affects CA, NJ, CT, NY, MA, IL and several other states heavily and doesn't discriminate between R and D there. The support for dropping that will dry up rapidly. Doubling the standard deduction doesn't even come close to making up for it. I had expected these changes from the bare bones and personally I stand to pay $5K more per year. I'm definitely joking but in an alternate universe I'd seriously consider taking up arms if it happens since it literally is used to fuel a tax cut for billionaires and more robbing blue to pay red. And blue has just about had it with that bullshit.

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 2:00 pm

BTW I just noticed they are deleting the personal exemptions so the doubling of the standard deduction is baked in there. This is a huge scam. I'm looking at close to +$8K here. And we already pay my wife's *entire* salary in local, state, and federal taxes. Fuck this noise.

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Re: Trump's Full Court Press on Tax Reform

Post by Octavious » Wed Sep 27, 2017 2:26 pm

Hmm wonder how the old man will like seeing his taxes fly through the roof. :lol: I think me personally it would be a wash. As I have a small house in a crappy town my taxes aren't that high. Others would get massively f'd by this though.
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Re: Trump's Full Court Press on Tax Reform

Post by Octavious » Wed Sep 27, 2017 2:34 pm

Dumb question. Can they just ram this through without any of the dems voting for it? That seems to be what I'm reading. It would mean it only applies for 10 years, but considering how captain fuckface is so old that doesn't matter to him anyway. :P I think NJ would totally collapse so we have that going for us at least. :P
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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 2:38 pm

Octavious wrote:Hmm wonder how the old man will like seeing his taxes fly through the roof. :lol: I think me personally it would be a wash. As I have a small house in a crappy town my taxes aren't that high. Others would get massively f'd by this though.
It won't wash - as in zero chance. They are dropping the personal exemptions as part of it. Your state and property taxes would need to be under $6K to fall under the proposed standard deduction compared to baseline. That seems unlikely.
Dumb question. Can they just ram this through without any of the dems voting for it? That seems to be what I'm reading. It would mean it only applies for 10 years, but considering how captain fuckface is so old that doesn't matter to him anyway. :P I think NJ would totally collapse so we have that going for us at least. :P
It will certainly put blue state's with high debt under considerable strain. That money will leave the state outright and not go to the lottery, sales taxes, or local businesses. It is straight up robbery and will potentially set off a financial catastrophe.

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 3:10 pm

Goddamn I missed another detail - they left the mortgage deduction in there. Who benefits from that the most? The very wealthy. This tax plan is overwhemingly a massive tax cut for the super wealthy. Nice job assholes - exactly the people who need the *least* help.

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Re: Trump's Full Court Press on Tax Reform

Post by raydude » Wed Sep 27, 2017 3:20 pm

RunningMn9 wrote:
El Guapo wrote:The political impact of proposing to lower the highest tax rate, repeal the AMT and estate tax, and raise the lowest tax rate will be something to behold.
The problem (for those making the proposal) is that they are likely reducing taxes on the lower income side of things - but they are going to have to explain math to show that (raising the rate, but doubling the deduction almost certainly lowers the effective tax rate).

Right now, I am able to exist because NJ State Income tax, my stupid goddamn NJ Property Tax, and my stupid goddamn NJ house mortgage interest deductions prevent me from getting fisted by the Feds as well. If that goes away, shit's gonna be unpleasant.
This I don't get. I realize that technically this is a deduction because you can deduct the cost of state and local taxes from your federal income tax. But shouldn't this really be viewed as a "No double dipping" clause? Because that's essentially what it is. The Federal govt wants to consider state and local taxes that you paid and don't get to enjoy, as income.

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 3:29 pm

That'd be a fair representation. The Rs have been claiming it is a way for the Federal government to prop up spending in the these states...while on balance more money flows out than in. Federal tax dollars in general flow from blue to red. That is why tax policy is so complicated. It is incredibly unfair to residents in blue states already. This makes it *incredibly* unfair. On top of the loss of political control. This is civil war or more likely test secession from the union again tax policy to be honest. And people won't even notice until tax time a year after. I imagine home values will fall as well because it is priced in to some extent. This is ugly, ugly policy. I'd like to think it can't pass but who knows anymore.

Edit: Actually I imagine there will be a paycheck effect instead of a lump sum effect. The payroll processors will have to guess what it'll mean and average it out over time. That'll be a fun blind exercise for them but good governance be damned if the Koch brothers get more money to tilt the table their way. America fuck yeah!

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Re: Trump's Full Court Press on Tax Reform

Post by Kraken » Wed Sep 27, 2017 4:00 pm

Opening positions don't make it into eventual policy, so I wouldn't make any plans based on this proposal. In the end, Trump and his ilk will enjoy a big tax cut, the rest of us might see a token cut, and any payment mechanisms will be stripped out, because nobody supports paying for stuff. The ultimate effect on the economy will be comparable to the Bush tax cuts -- negligible at best.

Cynical, moi? Sorry, I've seen this movie before.

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Re: Trump's Full Court Press on Tax Reform

Post by Pyperkub » Wed Sep 27, 2017 4:04 pm

stessier wrote: How in the world are they going to pay for this?
By it creating a magical 7% growth in GDP, duh.

What I would like to see is the tax cuts which benefit the current top % (choose a percentage, say 5%), including the estate tax elimination be contingent upon the tax cuts for the bottom % (say 95% here). Meaning actual growth needs to be demonstrated (without expanding the deficit).

So if the GDP does grow by over 5% in the fiscal year the tax cuts are affective, then the other tax cuts can kick in, as long as the tax cuts aren't being deficit-financed/the growth isn't deficit financed.

If it doesn't and the tax cuts (and other operations) don't stimulate the economy to the degree the GOP claims it will, the tax cuts for the top segment never kick in.
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Re: Trump's Full Court Press on Tax Reform

Post by stessier » Wed Sep 27, 2017 4:10 pm

malchior wrote:
Octavious wrote:Hmm wonder how the old man will like seeing his taxes fly through the roof. :lol: I think me personally it would be a wash. As I have a small house in a crappy town my taxes aren't that high. Others would get massively f'd by this though.
It won't wash - as in zero chance. They are dropping the personal exemptions as part of it. Your state and property taxes would need to be under $6K to fall under the proposed standard deduction compared to baseline. That seems unlikely.
I make good money but in SC I'm pretty sure I'd come out ahead. My itemized deductions are only 15k (including mortgage and state taxes) - I'd get 24k under the new plan for being married.

I don't think it's a good idea, but they certainly know how to appeal to their base.
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Re: Trump's Full Court Press on Tax Reform

Post by El Guapo » Wed Sep 27, 2017 4:12 pm

stessier wrote:
malchior wrote:
Octavious wrote:Hmm wonder how the old man will like seeing his taxes fly through the roof. :lol: I think me personally it would be a wash. As I have a small house in a crappy town my taxes aren't that high. Others would get massively f'd by this though.
It won't wash - as in zero chance. They are dropping the personal exemptions as part of it. Your state and property taxes would need to be under $6K to fall under the proposed standard deduction compared to baseline. That seems unlikely.
I make good money but in SC I'm pretty sure I'd come out ahead. My itemized deductions are only 15k (including mortgage and state taxes) - I'd get 24k under the new plan for being married.

I don't think it's a good idea, but they certainly know how to appeal to their base.
Is that factoring in the removal of personal exemptions?

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Re: Trump's Full Court Press on Tax Reform

Post by stessier » Wed Sep 27, 2017 4:19 pm

El Guapo wrote:
stessier wrote:
malchior wrote:
Octavious wrote:Hmm wonder how the old man will like seeing his taxes fly through the roof. :lol: I think me personally it would be a wash. As I have a small house in a crappy town my taxes aren't that high. Others would get massively f'd by this though.
It won't wash - as in zero chance. They are dropping the personal exemptions as part of it. Your state and property taxes would need to be under $6K to fall under the proposed standard deduction compared to baseline. That seems unlikely.
I make good money but in SC I'm pretty sure I'd come out ahead. My itemized deductions are only 15k (including mortgage and state taxes) - I'd get 24k under the new plan for being married.

I don't think it's a good idea, but they certainly know how to appeal to their base.
Is that factoring in the removal of personal exemptions?
Hmmm, I'm not sure. I use Turbo Tax and obviously claim those but I'm not sure which rolled up number I looked at to get the 15k. I think it might include them - that would be like 8k in personal exemption (me and wife), 1k for property tax, 2k for state tax, and the rest in mortgage interest and donations - which seems about right.

Did I mention the tax situation in South Carolina is really, really nice? I've lived in MA, IN, MI, FL, MD, WI, and SC and think SC is the best choice. Oh sure, our roads are a disaster and while the schools in my area are nice, they are bottom in the nation in the rest of the state - but very low taxes!
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Re: Trump's Full Court Press on Tax Reform

Post by RunningMn9 » Wed Sep 27, 2017 4:29 pm

malchior wrote:Who benefits from that the most? The very wealthy.
I don't believe that is true. The mortgage deduction phases out as income rises (as do all itemized deductions). The people that it helps the most are those whose mortgage interest represent a considerable portion of their adjusted gross income. That is absolutely not true for the super wealthy.
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Re: Trump's Full Court Press on Tax Reform

Post by RunningMn9 » Wed Sep 27, 2017 4:33 pm

stessier wrote:My itemized deductions are only 15k (including mortgage and state taxes)
That's not much more than just my property taxes. :)

Or rather :(
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
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Re: Trump's Full Court Press on Tax Reform

Post by stessier » Wed Sep 27, 2017 4:36 pm

RunningMn9 wrote:
stessier wrote:My itemized deductions are only 15k (including mortgage and state taxes)
That's not much more than just my property taxes. :)

Or rather :(
I'm sure you're living in a $1.5 million manse, though, right? Right??? :)

My sister-in-law and her family live in NJ. I have no idea how they do it.
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Re: Trump's Full Court Press on Tax Reform

Post by Jeff V » Wed Sep 27, 2017 4:38 pm

stessier wrote: Did I mention the tax situation in South Carolina is really, really nice? I've lived in MA, IN, MI, FL, MD, WI, and SC and think SC is the best choice. Oh sure, our roads are a disaster and while the schools in my area are nice, they are bottom in the nation in the rest of the state - but very low taxes!
As other have mentioned - tax code tends to take from the blue states and give to the red. My property taxes are $9K and state tax $7.5K; 25% of that is an extra $4,125 out of my pocket to fill your pot holes instead of ours. Married with 2 kids also puts me on the losing side of the increased standard deduction/no exemption equation. And that's before personal deductions... :angry-screaming:

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 4:44 pm

RunningMn9 wrote:
malchior wrote:Who benefits from that the most? The very wealthy.
I don't believe that is true. The mortgage deduction phases out as income rises (as do all itemized deductions). The people that it helps the most are those whose mortgage interest represent a considerable portion of their adjusted gross income. That is absolutely not true for the super wealthy.
it is complicated but the stats are that most of the benefit is for people with jumbo mortgages. Maybe not .1% super wealthy but top 5% is probably a fair statement.

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Re: Trump's Full Court Press on Tax Reform

Post by RunningMn9 » Wed Sep 27, 2017 4:45 pm

stessier wrote:I'm sure you're living in a $1.5 million manse, though, right? Right??? :)
Sadly, no. But I do have the pleasure in living in a house that is worth about 25% less than what I paid for it back in 2003. So I've got that going for me. My property taxes have only doubled in that time, so I'm still doing so much winning.
And in banks across the world
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Re: Trump's Full Court Press on Tax Reform

Post by RunningMn9 » Wed Sep 27, 2017 4:47 pm

malchior wrote:it is complicated but the stats are that most of the benefit is for people with jumbo mortgages. Maybe not .1% super wealthy but top 5% is probably a fair statement.
A jumbo mortgage is anything over $300k. Welcome to most houses in NJ. :)

Either way, the very wealthy aren't paying mortgage interest to get sweet income tax deductions (who would pay $1 to get $0.38 back?).
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
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The raccoon and the groundhog neatly
Make up bags of change
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Well he's slowly drifting out of range

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Re: Trump's Full Court Press on Tax Reform

Post by LordMortis » Wed Sep 27, 2017 4:51 pm

RunningMn9 wrote:Either way, the very wealthy aren't paying mortgage interest to get sweet income tax deductions (who would pay $1 to get $0.38 back?).
People who expect that their home is going to increase in value at a rate of 10-20% a year while they live in it.

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 4:53 pm

RunningMn9 wrote:A jumbo mortgage is anything over $300k. Welcome to most houses in NJ. :)
Incorrect. Non-jumbos can go up to about $600K but the mortgage deduction phases out at $1M anyway. The rich also have the most control over their income for tax purposes. Don't take my word on it - here is a piece that explains how it overwhelmingly benefits the rich. That doesn't mean that they should get rid of it but not touching it at all is because it overwhelmingly benefits the rich.
Either way, the very wealthy aren't paying mortgage interest to get sweet income tax deductions (who would pay $1 to get $0.38 back?).
How is that the point? It doesn't matter whether they target it or not. They still derive a large benefit and it was intentionally left out of the equation. It affects their donor class. Many signs indicate that this tax reform proposal is incredibly politically targeted to perpetuate GOP power at the expense of good governance.

Edit: Another article that goes into way more depth with case studies about benefits for the wealthy versus everyone else.

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Re: Trump's Full Court Press on Tax Reform

Post by PLW » Wed Sep 27, 2017 5:17 pm

Plus the estate tax is by far the most progressive tax we have.

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Re: Trump's Full Court Press on Tax Reform

Post by malchior » Wed Sep 27, 2017 5:30 pm

Oh I don't even think the estate tax stuff is in question by most (i.e. benefits the wealthy). Especially in its current form which has a huge phase out. The mortgage deduction however flies under the radar because most people think it benefits many. And that is highly inaccurate. It skews heavily to the wealthy and IMO it is very misunderstood.

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Re: Trump's Full Court Press on Tax Reform

Post by Zarathud » Wed Sep 27, 2017 5:47 pm

I don't think people will accept taking away their tax deductions for dependent children. Another example of how Trump policy hurts his core voter.
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Re: Trump's Full Court Press on Tax Reform

Post by stessier » Thu Sep 28, 2017 3:36 pm

I found this table from CNBC interesting.

Code: Select all

Who uses the mortgage interest deduction, by income

Income range*	       # of filings	   Total amount
0 to $50,000	         2.32 million	 $1.11 billion
$50,000 to $100,000     9.77 million	 $9.19 billion
$100,000 to $200,000	14.6 million 	$24.85 billion
$200,000 & up	        7.18 million	$29.78 billion
Totals:	             33.87 million	$64.93 billion
Source: 2016 data from Joint Committee on Taxation report. *Income ranges include AGI plus variety of untaxed items (i.e., employer contributions to health care plan, nontaxable social security benefits, etc.)
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Re: Trump's Full Court Press on Tax Reform

Post by Skinypupy » Thu Sep 28, 2017 4:23 pm

RunningMn9 wrote:
stessier wrote:I'm sure you're living in a $1.5 million manse, though, right? Right??? :)
Sadly, no. But I do have the pleasure in living in a house that is worth about 25% less than what I paid for it back in 2003. So I've got that going for me. My property taxes have only doubled in that time, so I'm still doing so much winning.
That's just nuts.

Every time I read stuff like this, I thank my lucky stars that we moved into our neighborhood exactly when we did.
“Don’t tickle the wall clown.” - MST3K

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Smoove_B
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Re: Trump's Full Court Press on Tax Reform

Post by Smoove_B » Thu Sep 28, 2017 4:37 pm

Skinypupy wrote:Every time I read stuff like this, I thank my lucky stars that we don't live in NJ.
Fixed for accuracy.

EDIT: I think our house has dropped about 22% in alleged value from our purchase. Tax reform? Hilarious.
Last edited by Smoove_B on Thu Sep 28, 2017 4:42 pm, edited 1 time in total.

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coopasonic
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Re: Trump's Full Court Press on Tax Reform

Post by coopasonic » Thu Sep 28, 2017 4:38 pm

Smoove_B wrote:
Skinypupy wrote:Every time I read stuff like this, I thank my lucky stars that we don't live in NJ.
Fixed for accuracy.
Well that too, but that has little to do with home prices or property tax rates
-Coop

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Fireball
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Re: Trump's Full Court Press on Tax Reform

Post by Fireball » Fri Sep 29, 2017 12:50 pm

My 2016 taxes would have been $1,006 higher under this plan than under current tax law. As a single person living in Virginia with a mortgage of just over $300,000, this hits me in a bad way in just about every direction. My boyfriend is clergy, and his taxes are already weird. No idea how badly he gets screwed here.

Edited to add: I don't mind the idea of paying more in Federal taxes. I'd be fine with paying $1,006 more in Federal income taxes if that money was going towards repairing our infrastructure, giving more people medical care, or solving veteran homelessness. I do, however, object to paying $1,006 more so that I can help partially offset a multi-million dollar tax cut for worthless parasites like Donald Trump's kids.
Wed Oct 20, 2004 1:17 am
Zarathud: The sad thing is that Barak Obama is a very intelligent and articulate person, even when you disagree with his views it's clear that he's very thoughtful. I would have loved to see Obama in a real debate.
Me: Wait 12 years, when he runs for president. :-)

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LordMortis
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Re: Trump's Full Court Press on Tax Reform

Post by LordMortis » Fri Sep 29, 2017 4:31 pm

I'm not smart enough to know the truth of it but it jives with the executive branches control of the Internet I've seen.

http://theweek.com/speedreads/727796/tr ... t-argument
The Treasury Department has removed from its website a 2012 economic analysis that found the burden of corporate taxes primarily falls on business owners and shareholders, not workers, undermining a key argument Treasury Secretary Steven Mnuchin has been making to promote the Republicans' plans to cut the corporate tax rate, The Wall Street Journal reports. Munchin and other Trump administration officials argue that workers would be the big beneficiary of cutting the tax on corporate profits to 20 percent, from 35 percent, but the 2012 paper from the Office of Tax Analysis shows that workers only bear 18 percent of the cost of corporate taxes, versus 82 percent for corporate owners.

Most mainstream economists broadly agree with that analysis — the nonpartisan Joint Committee on Taxation and Congressional Budget Office, for example, found that capital's corporate tax burden is 75 percent, versus 25 percent for workers, WSJ notes. (The Week's Jeff Spross has a good explainer on the theory and realities of corporate tax burdens.) "The paper was a dated staff analysis from the previous administration," a Treasury spokeswoman told The Wall Street Journal. "It does not represent our current thinking and analysis." The newspaper noted that the Treasury site still has up other technical papers from the Obama administration and working papers dating back to 1974. Peter Weber

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