Sunday, November 12, 2017

Tax Bill Review

I have been worried about Jerry's logic / consistency gaps lately. Hopefully he gets a check up.  NYT Tax Bill Impact Summary

"For example, I point out that the current House GOP plan would make taxes MORE progressive. Trump would pay more. Is that acceptable? It isn't fair by any means, if that is a value you wish to hold on this issue." Jerry 
"Not true at all."Sean 
"Sean, basis of that statement? I am basing that on the fact the top bracket is retained and the exclusion of SALT hits the rich harder, plus everybody else sees higher starts to their brackets and lower rates." Jerry 
"All you have to do is look at all the various analyses of the distributional impact -- whether from JCT, CBPP, TPC, Tax Foundation (which represent the full spectrum of ideologies) they all show more benefit (in absolute and % of income) accruing at the top of the scale, especially after all the temporary middle class measures fall off in five years." Sean 
"In that case I'm all for it. But you are looking at the Senate bill. Try looking at the House bill, it seems better all around, and since tax policy must originate in the House, I'm hopeful.  It's a question of "values," again. Do we value "sticking it to the rich"? Or do we value reducing taxes and promoting economic growth? I would say that one of those motivations is not like the other."Jerry

51 comments:

Anonymous said...

The rich have a different way of paying taxes. Income plays much less of a factor, what makes people rich in our society is appreciation of wealth in ways that are often unrealized with tax consequences that are deferred, sometimes forever. The people who get hammered by taxes, fairly or not, are people whose money appears on a W-2.

One of the policy triggers for me are plans designed to benefit "small business". The wealthiest person I know, a billionaire, got that way running a small business. Small businesses, like for example, the Trump Organization, can be pretty big, and they can be designed to produce vast wealth for their proprietors.

One of the curious things about Republican tax policy is the way they talk about it. They like to say things like the top one percent of this or that, pay all the taxes, as if artificially selected groups, not individuals, paid taxes.

--Hiram

jerrye92002 said...

Hiram, that's just strange. Democrats talk about "tax cuts for the rich" unceasingly, even when it isn't true. When the truth is that the rich pay a disproportionately higher percent of income taxes.

While you are correct that "the rich" get their income from investments and others get theirs from labor, two things are true: First, that in times of slow economic growth the "income gap" increases (i.e. Obama groused about "the rich get richer" when his economic policies CAUSED it), and second, that our tax policy should be about encouraging investment and economic growth. Heaping extra taxes on investments and investors is a certain way of discouraging it.

jerrye92002 said...

And John, you can award points to the NYT for consistency and logic if you like, but only in their usual "truth as we see it" way. Ryan actually was right the first time.

Anonymous said...

When the truth is that the rich pay a disproportionately higher percent oConf income taxes.

What was Mitt Romney's effective tax rate? 13%? And did that even begin to take into account is huge tax deferred holdings? No, you get rich in this country by finding ways, perfectly legal of course, to defer taxes to to shift them elsewhere.

Considering where he started, which was with an economy devastated by disastrous Republican policies, I would say Mr. Obama performed rather well. Republicans tell us the economy would do better if lower taxes gave business more money to invest, but does history show that? Money was cheap throughout the Obama years, but that didn't seem to spur investment. The stock market performed well, which meant earnings were high, but that free money wasn't invested in ways that it should have been. And we know what the rich did the last time they received a windfall tax break, they tossed it into the real estate and Wall Street casinos where the money that didn't disappear altogether, ended up in the Grand Caymans.

--Hiram


John said...

Jerry,
Do you have ANY source or convoluted logic to prove that???

"Trump would pay more"

You are saying, he is saying it and all I see is proof that both of you are incorrect.

Anonymous said...

It's a question that's very difficult to answer. Trump's financial affairs are ordered in ways designed to avoid tax liability. That's why he has all these little businesses and partnerships. Any tax policy designed to benefit small business will surely benefit Trump who basically owns and runs a myriad of small businesses.

Whenever a Republican talks about giving favorable treatment to small businesses, you know they are pretty much pulling your leg. That's because business is mercurial, it can change forms at will without affecting the substance. Wealthy people like Trump can orient their affairs to to be small businsss or large business, whatever is preferable in tax terms.

--Hiram

jerrye92002 said...

"Do you have ANY source or convoluted logic to prove that???" No. Can you prove otherwise? And if you cannot, then isn't the Democrat "screaming point" about "tax cuts for the rich" just a lie, as usual?

And if Romney pays a typical effective tax rate of 13%, he is paying a lot MORE in taxes than you or I, and a higher percent of the total taxes.

John said...

Jerry,
Then why did you write this? "Trump would pay more"

Have you gotten so used to parroting Trump that who have stopped thinking?

As for Romney, Hiram is neglecting to note that the reason Romney's effective tax rate was so low is because his charitable giving was so high. We can all reduce our income tax bill. It just means we need to give more to charity.

jerrye92002 said...

Then why did you write this? "Trump would pay more"

Because it is obvious from at least the intent and probably the contents of the bill, because authors and supporters have said so, and because Trump said so-- all "sources" which you routinely dismiss, or call "convoluted logic."

And the charitable deduction stays, though fewer will itemize to get it. Are you so determined to screw the rich you want to eliminate that "loophole"?

Anonymous said...

And if Romney pays a typical effective tax rate of 13%, he is paying a lot MORE in taxes than you or I, and a higher percent of the total taxes.

Should we pay something like a per capita rate, basically everyone paying something close to the same? Jason Lewis proposed something like that briefly and caught a lot of heck and backed off. I have always thought it was a logical position for people who are opposed to a progressive tax system. When people criticize a progressive tax system, what they are usually talking about is bracket system where higher incomes are taxed at a higher rate which strikes them as unfair. But if the unfairness is simply based on the fact that some people pay more than others, why are the brackets the problem? Even with a flat tax, presumably people with high incomes will pay more in taxes than people with low incomes for exactly the same services. How is that fair?

--Hiram

John said...

Jerry,
"They say it, so I believe it is not your normal"...

Now if they really want to be Conservative, they should be cutting spending and keeping taxes fixed. This Voodoo Economics thing has been disproven twice in modern times... At great expense to our children...

jerrye92002 said...

Hiram, I have always favored a "flat tax" on disposable income. That would be progressive in tax DOLLARS paid, and I see nothing wrong or unfair about that, other than that some means of disposing of income should be favored, such as charitable giving and investment. To correct that you need a FAIR tax and its countless additional advantages. What's proposed here is a tiny start in the right direction and of course will be opposed by those who believe government is better equipped to decide how to spend your money than you are.

John said...

Another discussion of the plan. This time in Forbes.

John said...

And here is some info regarding the supposed death tax...

Laurie said...

Raw Data: Federal Taxes and Spending Over the Past 60 Years

Robert Samuelson: Under-taxed America

I agree with Samuelson

jerrye92002 said...

Laurie, I will agree with Samuelson, too, except for one thing: You cannot solve the problem of the deficit and debt by raising taxes. A little simple math says that a 100% federal tax rate would be required for the next 7-8 years to do that. Spending must be cut,just like when one of us gets caught with too much debt.

And OK, taxes and spending have been "about" 20% of GDP for years (although spending has "averaged" more than taxes, but shouldn't those numbers, like all other things, be subject to economies of scale and actually go DOWN over time? Why are we not looking at economic growth as the way out of the deficit problem?

Laurie said...

When I have too much debt I increase my income by picking up another job. I do not skip on health care for my family.

John said...

I agree with not touching taxes, and cutting spending so it is less than revenues.

Seems logical.

jerrye92002 said...

Laurie, that works if you have the opportunity, but government does not. The only thing they have is "forcing" their "employer" to give them a big raise.

And if your debt gets high enough when you already have 3 jobs, you have to cut back on the Mercedes, dining at Le Cirque, and the golf club membership, and try to pay your medical bill and rent. Every credit counselor will tell you, "the first thing you do is cut up all the credit cards."

John said...

Jerry,
I agree. They should stop making social security and medicaid payments to people who have a net worth greater than $200,000... Is that the kind of excessive spending you are talking about?

I mean those folks sure don't need the money and yet we keep giving it to them year after year. I mean if we did that those trust funds would be solvent and there to pay for people who truly need the help for ever... I mean those really are just a form of welfare payments after all.

Are you willing to give up your food from the government trough so millionaires can pay less in taxes?

I agree, let's cut up the card and stop making those silly unnecessary payments.

John said...

My guess is that Jerry won't like my idea of means testing SS and medicare benefits.

And yet he likely would be happy to kick people off medicaid and ACA subsidies to save tax payers a few bucks, even though they would have questionable or no healthcare without them.

The problem seems to be that someone else's rent / medical bill, looks like a Mercedes, dining at Le Cirque, and the golf club membership if you are not the one reliant on it.

If I say we should cut way back on over seas military bases to save money...
Then someone else will insist that they are required...

It is always okay to sacrifice someone else's pork...

Anonymous said...

I have always favored a "flat tax" on disposable income. That would be progressive in tax DOLLARS paid, and I see nothing wrong or unfair about that, other than that some means of disposing of income should be favored, such as charitable giving and investment.

A reason why a flat tax never gets going is because it can be made progressive. For many rich and influential Americans it could mean a tax increase.

Nobody hires a lobbyist or contributes to a political campaign to make taxes fairer. They do those things to lower the amount they pay in taxes.

--Hiram

Anonymous said...

A game a lot of politicians play is a form of political three card monte. When an effort is made to hold them accountable, they will say that's not my bill, that's the other body's bill or somebody else's bill. It's not in the interest of voters to allow that. When you elect a Democrat, or even a Republican, they are responsible for what their party does. No politician should be allowed to benefit from confusion he creates. No politician should be allowed to use ambiguity as a weapon. No politician should derive political advantage by shifting difficult choices onto some other politician.

--Hiram

John said...

CNN Suburban Back Lash

jerrye92002 said...

"My guess is that Jerry won't like my idea of means testing SS and medicare benefits.
And yet he likely would be happy to kick people off medicaid and ACA subsidies to save tax payers a few bucks, even though they would have questionable or no healthcare without them."

Wrong again. I don't like means testing SS because it is NOT, by government's definition, a welfare program, but an "investment" and "insurance" program. I DO agree with cutting off payments for EVERYBODY, phased in over forty years and accompanied by a mandatory system of private retirement accounts. Sort of like the FAIR tax provides, automatically.

And I would happily "kick people off" of government-run health insurance in favor of a system of "premium support" for buying any kind of health insurance the consumer wants on the free market. I would have governments allow offering "state high-risk pools," charity hospitals, or insurance companies having "pre-existing condition exclusions."

Basically, you are impugning my motivations. Again. Are you sure you are a moderate?

jerrye92002 said...

"A reason why a flat tax never gets going is because it can be made progressive. For many rich and influential Americans it could mean a tax increase."

The reason a flat tax never gets going is because it IS progressive in dollars taxed, but it does NOT allow every special interest under the sun to have loopholes, exclusions, special credits and exemptions written into the tax code and that earn Congress-dwellers the big donations. Pass the FAIR tax and 70% of lobbyists lose their jobs.

John said...

Jerry,
I think you are just a normal American. Which means that you want low taxes and you want to maintain the government expenditures that benefit you personally. (ie cake and eat it too)

And whether you call it insurance or welfare, it is just food placed in your trough monthly at the expense of today's tax payers. And given that the previous generations:

- spent more than they collected (ie national debt)

- want more benefit than what they paid for (ie SS, SSD & Medicare trust funds going empty)

I think it could be justified to chop away at those big time entitlements starting immediately. No sense passing the consequences of the sins of the Parents on to our Grand Chidren.

Anonymous said...

The reason a flat tax never gets going is because it IS progressive in dollars taxed, but it does NOT allow every special interest under the sun to have loopholes, exclusions, special credits and exemptions written into the tax code and that earn Congress-dwellers the big donations

Sure. Rich people might very well pay more under a flat tax, and rich people have the lobbyists that keep their taxes down. The loopholes don't disappear, they just change form. What happens under a flat tax system is that the concept of income changes. People will simply redefine the way they generate wealth. As it stands now, wealthy people don't get their wealth from pay checks. That's why I am so amused at the animus displayed towards highly paid individuals, particularly athletes. They pay a huge amount in taxes because the money they make appears on a W-2, and then they are disrespected and dismissed when they speak out on issues, putting those paychecks at risk, by the way. Colin Kaepernick lost his job for standing up for what he believed. When did Donald Trump ever do something like that? Or Roger Goodell?

--Hiram

jerrye92002 said...

"I think it could be justified to chop away at those big time entitlements starting immediately." Of course it could, just as we ought to be willing to repeal Obamacare, lock, stock and toilet bowl, because as government programs they are ineffective, long on promises and short on fiscal responsibility. Replace all of them with private free enterprise accounts, supplemented by charity, and, during the transition, by federal block grants or no-strings "premium support."

jerrye92002 said...

Hiram, all you have done is identify the one fundamental flaw of the Flat tax, which is the definition of income. The FAIR tax eliminates that flaw.

And try dissing your private employer's customers and keeping your job. It is not and should not be tolerated.

Anonymous said...

"And try dissing your private employer's customers..."

How did Colin Kaepernick do that, exactly?

Moose

jerrye92002 said...

Ask yourself, who was offended? Obviously not the NFL or the team's owner, because they did not immediately fire the guy. But the FANS, the customers, are staying away in droves. One can assume they were the ones offended, and most businesses would be trying to remedy that situation by firing the offending employee. It is why so few profane, loudmouthed slobs are hired as receptionists.

Anonymous said...

So, now it's okay for people to be offended by something that isn't directly offensive toward them?

Do make up your mind who the snowflakes are.

Moose

John said...

We may all have the ability / freedom to do and say what we want...

However the other citizens also are free to do the same...

Moore and Kaepernick both did things that others found offensive...

And the others responded as is their right.

John said...

Jerry,
Again with your desire to chop away at someone else's entitlement...

Let's show some personal sacrifice by giving up your entitlements for the good of the country... :-)

jerrye92002 said...

What makes you think I want to "chop away" at anything? I simply want to do those things in a vastly more efficient and effective way. For example, reform of SS would let more people retire earlier, with greater incomes, and the economy would see a significant growth. Why would you object to that? We spend almost $62,000/year per family on welfare, yet we still have millions of families below the $20,000 poverty line. It is a fundamental and erroneous assumption of liberals that, without government, nothing would get done.

John said...

The usual... Sources?

jerrye92002 said...

For SS, see the experience of Chile. Or do the math. Better yet, both.
For welfare, we've all done this calculation a dozen times. It's not advanced calculus. But it does not agree with liberal dreams about how the world works, so we never solve the problem. Is that why you defend the status quo?

John said...

Let's try some real sources...
WAPO Jeff Sessions Misleads

Heritage WAPO is Wrong

Personally I think WAPO is correct. Jeff is using inconsistent numbers.

John said...

Now I have a lot of ideas on how to eliminate poverty, however you are against them... So it looks like we are stuck with keeping the poor folks fed with healthcare for now. Rather than your plan to cut their benefits and hope they learn quick.

Back to SS and Medicaid, it seems to me that means testing them would be simple and logical... I mean why are tax payers paying taxes so millionaires can get a check and free insurance each month? There sure isn't anything being gained through that expenditure.

jerrye92002 said...

You cite sources saying the "numbers" are incorrect. It's a typical Democrat trick, to say that when you do the math, you find a 1,3, or 20% discrepancy, without noting that any of those numbers proves the point the Republican is making. It is an error in accuracy, not in identifying the problem correctly. All that could be avoided if you did the math yourself.

jerrye92002 said...

So, just because I disagree with your ideas for ending poverty, My ideas are wrong and I want to harm these folks? How about some tolerance for different views, without demonizing others?

Yes, means testing of SS is simple and logical. So is the FAIR tax. Neither will happen because Congress would have to ADMIT that SS was NOT an insurance or retirement plan, but rather a Ponzi scheme. Just as they would have to admit that the IRS code is riddled with special interest provisions they helped to write, in response to big donations.

John said...

Here is an interesting report from our friends at Heritage.

John said...

I think it will become a post sometime...

jerrye92002 said...

Heritage is an eye-opener, if you believe them. Of course, there is still something left to individual interpretation.

John said...

Oh good Lord !!!

Heritage is a Conservative Think Tank...

I would expect that "if you believe them" from Laurie etal.

jerrye92002 said...

Exactly my point. If I cite Heritage as a source, it is usually dismissed as a "conservative think tank." And I might expect Laurie to go even further in that direction, so I would be curious what her "interpretation" of that report might be. I thought it made a lot of sense, but I would have to read it over thoroughly to suss out any policy prescriptions.

Anonymous said...

it is usually dismissed as a "conservative think tank."

I don't think something should be dismissed simply because it comes from a "conservative think tank". That would be like dismissing some environmental argument just because it happens to be Al Gore who makes it.

Our country is failing for a number of reasons. One of them is tribalism, in this case a tendency to reject arguments and facts simply because they are put forward by members of the other tribe.

--Hiram

jerrye92002 said...

Absolutely right, Hiram, and my recent experience really impressed that upon me. I find that individual liberals are "nice people," even reasonable, but the minute they get with a few members of their "tribe," they become insular, insulting and seemingly immune to reason. They do indeed dismiss anything that comes from a "conservative think tank." We do not even get to the point where we can disagree because of some good reason; we never get past "talking points." To quote President Trump, "sad."

John said...

The funny part about this is that I assume you see Conservatives as different in some way. I personally have not found this to be the case.

Anonymous said...

The funny part is that you do not. I will grant that it may be a matter of degree, but it is substantial enough that I perceive it as a difference in nature. I won't refer to any of the discussions here, because debate about debates is rather self-defeating, but notice that debate from the left of the political spectrum very quickly boils down to assumptions about the character of the opposition, rather than the subject at hand? You have done it yourself.

Let us take a great example: Trump is looking for ways to "fix" the welfare system, he says to "raise people out of poverty" (couldn't find the direct quote). Immediately he is savaged by Democrats, claiming he /wants/ to harm the poor (impugning his character, IOW, rather than debating the actual policy). Why? I suppose you could say you harm the poor by making them self-sufficient and "not-poor," but isn't that a GOOD thing?