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The Proposed Trump Tax Overhaul legislation

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  • Independent
    Washington
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    I am confused, I thought every thread was about Bernie Sanders because the entire site is devoted to Bernie Sanders. :D

  • Independent
    Washington
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    Schmidt Wrote:

    Carlitos -- I certainly support more simplicity, but my view is that reducing the number of tax brackets does nothing for simplicity since no one has to take into account those individual brackets when calculating taxes. I would favor more brackets instead of fewer to make the progressive taxation more like a smooth curve than a few giant steps.

    Obfuscation is a Trump trait.

    Yeah, figure out which one your in, do your taxes. If figuring out which bracket you're in now is a hard problem to solve, going down to three is not going to solve that problem.

    Maybe there is more too it than than that, and if there is, I'd like to know how going to from 7 down to 3 makes it easier for people to do their taxes.

    Sorry for getting off topic, where were we, something about what super powers Bernie Sanders would have if he came into contact with Kryptonite. ;)

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    "about what super powers Bernie Sanders would have if he came into contact with Kryptonite. ;)"

    Finally an original thought!

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Another obfuscation of Trump's "tax cuts for the rich plan" is his so called doubling of the standard deduction. If you have always used the standard deduction then maybe it sounds good to you. The current standard deduction is $6,350 or $12,700 if your are married and filing jointly. Trump almost double it to a flat $12,000 ($24,000 for joint returns). Sound good at first glance.

    But along with that increase is the elimination of the personal exemption ($4,050 or $8,100 for a joint return). If you are over 65 you also lose the senior exemption of $1,250. If you have children at home, you lose those personal exemptions as well. However, if you are able to claim a child tax credit, the loss of those exemptions will be offset in part by an increase in the child tax credit.

    Everything is supposedly rolled into that flat $12,000 standard deduction. That's the "simplicity" he is selling.

    Nevertheless you can still choose to itemize your deductions if you have high interest payments on a mortgage and have high charitable deductions...like you give a ton of money to your church. But that's it. You can no longer include your property taxes or state and local taxes or high medical expenses in Schedule A as an itemized deduction. Just the mortgage deduction and charitable deductions are all that is allowed.

    Furthermore, if you still choose to itemize you also lose the benefit of the personal exemption because that exemption is now a part of the standard deduction. You cannot claim the standard deduction if you itemize.

    Again getting back to my earlier point on simplicity. A couple of the easiest lines in the Form 1040 are the lines for personal exemptions and standard deductions. For both you just enter the applicable amounts and subtract them from your taxable income. Now as proposed by Trump you make one subtraction instead of two. No big deal.

    However, if you are one that has high itemized deductions and still choose to use Schedule A, you lose a bunch of money from not having the benefit of the personal exemptions as well as the deductions that are no longer allowed. The bottom line is that more people will be compelled to use the standard deduction, but those who previously itemized and continue to do so will find that their taxes will likely go up as a result.

    For me and my wife, we have a slight benefit. We lose the over 65 benefit, but still come out slightly ahead depending on the incomes associated with the new tax brackets, which we don't know yet. For those with children, however, it might be a different story depending on whether you qualify for the child tax credit.

  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Schmidt Wrote: For me and my wife, we have a slight benefit. We lose the over 65 benefit, but still come out slightly ahead depending on the incomes associated with the new tax brackets, which we don't know yet. For those with children, however, it might be a different story depending on whether you qualify for the child tax credit.

    The same goes for my wife and I, but I always try to think in a binary way. What's good for my wife and I personally may not be so good for other people. And if it's not so good for lower income individuals and families then I tend to be opposed to it, even if it is a boon for me personally.

    Pushing for a two percent tax hike on the poorest among us in order to give the richest among us a tax cut is simply cruel. Put simply - this Republican plan is proposing to rob Peter in order to pay for Paul's tax cuts.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Mulvaney said yesterday that tax reform needs to result in new deficits to sustain 3% growth.

    Hell has frozen over.

    If they cut taxes and “pay for it” thru govt spending cuts then the result will be unambiguously negative. Not all of the tax cuts will be spent, but govt spending is spending by definition (outside of transfer payments, but the propensity to spend transfer payments is probably higher than that for tax cuts).

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    It is self evident that Republicans only have a problem with deficits when Democrats are in office. Trump’s tax plan needs to be attacked not because it adds to the deficit but because it benefits rich people, fuels wealth inequality, and all the while doing little to boost economic growth. Democrats need to embrace massive tax cuts for the working class, a steaper progressive tax code, and more govt spending for public purpose. Unfortunately, too many Democrats fall for Republican propaganda that we can’t do anything without raising taxes or cutting other spending. Deficit Terrorism by Democrats has never won an election for Democrats, ever.
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Carlitos Wrote: It is self evident that Republicans only have a problem with deficits when Democrats are in office.

    We have always known that. The Bush tax cuts added billions to the deficit and trillions to the debt, but that doesn't matter because it was passed by Republicans.

    Carlitos Wrote: Trump’s tax plan needs to be attacked not because it adds to the deficit but because it benefits rich people, fuels wealth inequality, and all the while doing little to boost economic growth.

    Not to beat a dead horse, but this wouldn't be an issue if Bernie or busters didn't vote for a narcissistic sociopath last November.

    Any rational Democrat understood that Republicans only care about protecting the rich, but a handful of people in three states overruled the majority of this country.

    Carlitos Wrote:Democrats need to embrace massive tax cuts for the working class, a steaper progressive tax code, and more govt spending for public purpose.

    I wholeheartedly disagree outside of investing far more on public purposes.

    What Democrats need to do is have a discussion with the working class and be frank with them. There's no such thing as free lunch. If we want "free" healthcare and "free" this or that then people need to understand that their taxes are going to go up. You can tax the 1% at 99% and not come close to paying for everything the far left is promising.

    However, you get no push back from me when it comes to massive investments in infrastructure. Our dams are failing and our bridges are crumbling. Not just that, but technology is changing and we need to adapt to that changing technology.

    Investing in our crumbling infrastructure can solve a short term problem, but in the long term we have to realize that machines are going to replace humans in the vast majority of these types of jobs. We can dig our heads in the sand and try to convince ourselves that isn't going to happen or we can start figuring out how to deal with that reality before it's too late.

    Carlitos Wrote: Unfortunately, too many Democrats fall for Republican propaganda that we can’t do anything without raising taxes or cutting other spending. Deficit Terrorism by Democrats has never won an election for Democrats, ever.

    Neither has being honest with the American people...

    I'm a realist, but the sad thing is that realism isn't a sexy thing. I don't fall for Republican propaganda, but I don't fall for Bernie's propaganda either.

    President Obama was a realist. He was an idealist, but he was also a realist. He understood that compromise isn't a dirty word and that incremental positive change is better than no positive change at all.

    Bernie or busters don't get that. They would rather blow everything up than compromise. That type of thinking has given us President Donald - a narcissistic sociopath who will make the lives of the weakest among us worse than they could ever imagine.

    Their ideological purity may help them sleep better at night, but it's never going to bring about the change they profess to want.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    If the economy was maxed out and running at full capacity, and the government sought to create a new benefit provided by govt to citizens, then yes you would have to raise taxes to guarantee that benefit to citizens. The tax would be needed to reduce our spending to make ‘space’ for the new govt spending. Otherwise, the new govt spending would create ‘demand pull’ inflation and the new benefits might not be guaranteed.

    The purpose of taxation is not to raise revenues but regulate inflation and provision real resources for sale in the govt’s currency for the govt to purchase.

    So in a world where the economy is maxed out, what you are saying would apply.

    But in a world where American industrial capacity utilization hovers in the 70% range, 15-20 million Americans can’t find full time, stable work, immigrants are beating down our doors to take jobs on the cheap, foreigners begging to sell us stuff for our govt’s currency at lower prices than our industries can produce at, flat wage growth, and low inflation, it is self evident that the economy is not maxed out and that there is space for new net govt spending (govt spending minus taxes).

  • Liberal Democrat
    Democrat
    Kenosha, WI
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    No tax cuts right now please, we have at least 3 national disasters to pay for.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Business Insider has shown how Trump's proposed new tax brackets line up with the 2017 tax brackets...except that the income ranges for those new brackets have not yet been specified.

    How your tax bracket may change under Trump's new tax plan, in one chart

    Single filers:

    Joint filers:

    There may be one more unspecified tax bracket at the very high end, but this hasn't been specified either.

    This is what I hate about politicians. Putting out all the propaganda selling the plan, but leaving out the most important part. Those so called simplified tax brackets above are nothing more than a smoke screen for manipulation. They can be moved all over the place to disguise true intent

    It's like buying a house based on the outside looks but never being allowed to step inside to see what it looks like. We just need to trust them. Ha!

    You hear that Bernie?

  • Independent
    Ft.myers, FL
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    I guess it is an bit early to analyse this. Since we know the "idiot" and his cronies may cook up anything, as well nothing may materialize in this la la land, I would not speculate that anything at all will work for the middle class or poor people. Don't forget the only objective is making the rich richer. A dead duck process.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Carlitos Wrote:

    If the economy was maxed out and running at full capacity, and the government sought to create a new benefit provided by govt to citizens, then yes you would have to raise taxes to guarantee that benefit to citizens. The tax would be needed to reduce our spending to make ‘space’ for the new govt spending. Otherwise, the new govt spending would create ‘demand pull’ inflation and the new benefits might not be guaranteed.

    The purpose of taxation is not to raise revenues but regulate inflation and provision real resources for sale in the govt’s currency for the govt to purchase.

    So in a world where the economy is maxed out, what you are saying would apply.

    But in a world where American industrial capacity utilization hovers in the 70% range, 15-20 million Americans can’t find full time, stable work, immigrants are beating down our doors to take jobs on the cheap, foreigners begging to sell us stuff for our govt’s currency at lower prices than our industries can produce at, flat wage growth, and low inflation, it is self evident that the economy is not maxed out and that there is space for new net govt spending (govt spending minus taxes).

    Carlitos -- I bolded the one part that seems to be an issue in our arguments in another thread. When I look at the want ads, there are lots of jobs going unfilled because the employers either do not pay enough or the applicants do not have the skill sets or the mobility or the health necessary to do the jobs. Those are the categories that largely comprise the 15-20 million Americans who can't find full time stable work.

    Of course employers could pay more, and some do to just hold onto their existing employees. But some cannot afford to pay more or it will drive them out of business.

    Certainly also a whole bunch of workers from the Rust Belt and Coal Country have migrated to other cities across the USA to find employment, but as I read articles on the destitute that chose to remain, the only solution it seems if for the employers to move shop to them. And some have...a solar energy company for example.

    In any case, the current unemployment rate is 4.2 percent, approaching one of our best years of 4.0 percent in 2000. You have to go all the way back to 1969 to find a rate under 4.0 percent or 1953 to find a rate under 3 percent.

    So for all practical purposes we are pretty close to maximum employment now if we say 4.0 percent is that practical limit. To get under that, a whole bunch of things need to change...and perhaps not for the good.

    Baby boomers retiring in big numbers create opportunities for young people...if they have the skills. It's part of what is driving the unemployment rate down now. And why wages apparently are not rising as fast as young people are paid less than the older folks retiring.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    I’m not saying the BLS U3 number is wrong, but you have to know who it counts.

    monthly data keeps showing that a large amount of those taking new jobs were considered ‘not in the labor force’ the day before they accepted the job offer.

    then there are the regional disparities. Some places have very high unemployment; other places very low.

    Likewise, some places have a lot of people not in the labor force, etc.

    Nevertheless, you got a lot of people that might be unemployable. They are like a buffer stock that has turned sour because it wasn’t rotated. And they need a transitional employment opportunity to get back in the labor force.

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Carlitos -- Yes there are anomalies, but at least the methodology has not changed over the last several decades. You pointed out that there are regional differences -- some places with high employment and some places low. That's absolutely true and is part off the problem. Some people are just not mobile and cannot uproot themselves from family to travel hundreds of miles for a new job. It's always been that way. You cannot change that. Nor can you easily change the heath and physical fitness requirement of employers.

    Basically when you take away many of these people and a few other demographics, you kind of reach 4 percent unemployment as the base line of "maximum employment". At that level it is more about musical chairs than creating new jobs.