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The result of the tax cuts

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    In 1953, the CEO of General Motors was asked if he could make a decision that goes against the interests of GM. Wilson said he would, but that he couldn't conceive of such a situation "because for years I thought what was good for our country was good for General Motors, and vice versa".

    Times have changed, and it is all because of the ill-advised tax cuts from last spring.

    Right now, however, what's good for GM is bad for the US.

    Workers - and the media and economists - should not have expected an increase in industrial jobs to follow tax cuts, they should have expected job cuts.

    They should have expected job cuts for two reasons - one trivial and one significant.

    The trivial reason is that almost anything that Donald Trump promises is likely not to materialize. The much more significant reason is that history tells us job cuts usually follows tax cuts.

    https://www.aljazeera.com/indepth/opinion/general-motors-job-cuts-harbinger-crash-181129153107220.html

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    that guy in AZ Wrote:

    In 1953, the CEO of General Motors was asked if he could make a decision that goes against the interests of GM. Wilson said he would, but that he couldn't conceive of such a situation "because for years I thought what was good for our country was good for General Motors, and vice versa".

    Times have changed, and it is all because of the ill-advised tax cuts from last spring.

    Right now, however, what's good for GM is bad for the US.

    Workers - and the media and economists - should not have expected an increase in industrial jobs to follow tax cuts, they should have expected job cuts.

    They should have expected job cuts for two reasons - one trivial and one significant.

    The trivial reason is that almost anything that Donald Trump promises is likely not to materialize. The much more significant reason is that history tells us job cuts usually follows tax cuts.

    https://www.aljazeera.com/indepth/opinion/general-motors-job-cuts-harbinger-crash-181129153107220.html

    As far back as data is available it is shown that recessions always follow significant tax cuts. Tax cuts directly cost jobs and that spending loss alone is recessionary .
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    By now, more people disapprove of the Tax Cuts and Jobs Act than approve of it. Just like Reagan's tax cuts, this one is also just "smoke and mirrors, since it will actually INCREASE taxes for most people.

    http://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017

    Republican legislators in Arizona just came to the realization that the act would INCREASE taxes on individual filers by $195 million, so they just passed SB1143, which would mitigate the increase. Ducey, however, just VETOED the bill, which means that the guy who swore to reduce taxes every year just INCREASED taxes for individual filers. His veto, though, did have the effect of preserving a $40 million tax cut for businesses. If you are quick with math, you'll realize that Ducey just increased taxes by a net of $155 million overall.

    http://www.azcentral.com/story/news/politics/legislature/2019/02/01/arizona-gov-doug-ducey-vetoes-bill-erase-higher-state-income-taxes/2748132002/?utm_source=azcentral-News%20Alert&utm_medium=email&utm_campaign=news_alerts&utm_term=news_alert

    As the article at the top of the page points out, the CBO estimates that the act will increase the national debt by $2.289 trillion over the next decade. Did it actually produce the desired boost in the economy? For that answer, let's go to the highly respected Brookings Institute.

    Their calculations determined that the growth in GDP after 10 years would be .4 percent, or .04 percentage point a year.

    That ain't much to brag about.

    http://www.brookings.edu/bpea-articles/macroeconomic-effects-of-the-2017-tax-reform/

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    I just downloaded the 2018 IRS tax forms this morning, and was surprised to discover that the forms were much shorter than before.

    That's the good news.

    Unless you're a millionaire, though, you are getting screwed.

    Now that the adults are in charge again in the House, I hope that they repeal the 2017 Tax Cuts and Jobs Act as soon as possible. The link below goes into more detail, but here are a few highlights:

    The bill will cut taxes three times more for business owners than workers.

    The Senate Finance Committee found that the tax cut will generate little economic growth.

    The tax bill may trim taxes at first, but raise them for half of all households by 2017.

    The tax cut will cut taxes mostly for high income households.

    https://www.taxpolicycenter.org/tags/2017-tax-bill

    Average tax refunds were down last week 8.4 percent for the first week of the tax season over the same time last year, according to the Internal Revenue Service. Dipping refunds are inflaming a growing army of taxpayers stunned by the
    consequences of the Trump administration’s tax law — and the effects of the partial
    government shutdown.

    The average refund check paid out so far has been $1,865, down from $2,035 at the same point in 2018, according to IRS data. Low-income taxpayers often file early to pocket the money as soon as possible. Many taxpayers count on the refunds to make important payments, or spend the money on things like home repairs, a vacation or a car.

    The IRS had estimated it would issue about 2.3 percent fewer refunds this year as a result of the changes in the federal tax law, according to Bloomberg. MSNBC reports that 30 million Americans will owe the IRS money this year —
    3 million more than before Trump’s tax law.

    “There are going to be a lot of unhappy people over the next month,” Edward Karl of the American Institute of CPAs told Politico. “Taxpayers want a large refund.” Some 71 percent of taxpayers received refunds last year worth about $3,000 on average, according to Karl.

    Scads of taxpayers are complaining on Twitter that they have always received a refund — but now owe the IRS instead.

    The number of refunds sent out by the IRS was also down — about 24 percent — as the agency struggled to get up to speed after the government shutdown. The agency sent out about 4.67 million tax refunds in the week ending Feb. 1, compared with about 6.17 million in the same period in 2018, according to
    IRS data.

    This year’s filing season, which began two days after the shutdown ended on Jan. 25, is complicated because it’s the first after the 2017 tax law was enacted. Though President Donald Trump boasted that the new code would be so simplified that people could file their taxes on a postcard, that’s not the case.

    In addition, the changes complicated payroll withholding, so that not enough money was withheld by employers in many cases, meaning that people now owe more taxes. The new law also capped IRS deductions for paid state and local taxes, including real estate taxes, resulting in a nasty surprise for many filers.


    Several other deductions are no longer allowed.

    The frustrations will likely continue to fuel support for plans to boost taxes on the ultra-wealthy. A poll last month found that nearly
    60 percent of registered voters support a plan by Rep. Alexandria Ocasio-Cortez to impose a 70 percent marginal tax rate on the portion of annual income that exceeds $10 million a year.

    Twitter is filling up with complaints from people whose situation has changed radicall

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    If you use TurboTax or another of those online tax software organizations, the new forms probably make little difference.

    Form 1040 2018 Tax Year

    About Form 1040, U.S. Individual Income Tax Return

    Form 1040 2018 Instructions

    As noted, the familiar 1040 form above has been completely redesigned with much of the previous information and calculations now relegated to a new series of six schedules numbered 1 through 6. Forms 1040A and 1040EZ have been eliminated.

    The new 1040 form is now two "half pages" with the front half page basic information and the second half page the actual calculations. The required information resides only on the top half of each page while the bottom half is left blank. I notice that the font is also smaller.

    I really don't see the point of Schedules 1 thru 6. With the exception of Schedule 1, all of those numbered schedules are just a few lines at the top of the page...a waste of paper with all the blank space below. Plus it's a bit tedious (and a step backward for me) to transfer the total numbers from the alphabetical schedules (e.g. Schedules A, B, C, and D and various numbered Forms) to a new set of numbered Schedules (1, 2, 3, 4, 5, or 6) and to then move those totals to Form 1040 for consolidation and final calculation of taxes.

    I do my own taxes using only an Excel spreadsheet. Soon they will force me to use TurboTax as well.

    PS - I'm one of those who owes money to the U.S. Treasury this year.

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    For the second year in a row, the U.S. Treasury is set to borrow $1 trillion in order to finance the debt.

    http://www.bloomberg.com/news/articles/2019-01-28/another-year-another-1-trillion-in-new-debt-for-u-s-to-raise

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    There are going to be a lot unhappy people this tax season because of the 2017 tax bill. Due to the loss of some deductions that they had previously (like state and local income taxes) people who used to get refunds are now having to pay money to the IRS. Those who ARE getting refunds, are getting less back than in prior years.

    In a move reminiscent of Reagan's "smoke and mirrors", the Trump administration ordered the IRS to lower the amount that was withheld, in order to give people the impression that the tax scam bill was actually saving them money. The withholding on my checks from the school district went down a bunch, and would have forced me to pay in to the government if my wife and I were younger than 65. As a result, I am getting back ALL of the money that I paid in to the IRS, all $38.29 of it - not even enough for a meal out for 2 people.

    If you are getting a refund check, there are only 4 offices in the entire country that do the processing - Kansas City, Fresno, Ogden, and Austin.

    If you owe money, you'll find that there are only 5 offices that process the returns. They are in Louisville, San Francisco, Cincinnati, Hartford, and Charlotte.

    Though the IRS brings in most of the revenue needed to fund the federal government, its resources have been cut year after year. In 2016 the American College of Tax Counsel wrote to the Congressional leadership stating, "We have watched the agency struggle with significant decreases in funding that have caused staffing and morale issues. In our practices, we have seen the negative impact this has had on our clients, the taxpayers.

    In the 2017 fiscal year, the IRS processed more than 245 million returns and collected more than $3.4 trillion in gross revenue, spending 34¢ for every $100 it collected.

    On June 28, 2018, Bloomberg News wrote, "The agency has been reeling from budget cuts. The current budget of $11.43 billion is less than in fiscal 2008, and the IRS pared about 15 percent of its workforce over the past five years. The enforcement staff has plunged by more than 25 percent since 2010.

    In the 2018 fiscal year, the U.S. federal government spent $779 billion more than it brought in. It's estimated that in fiscal year 2019 the loss will be close to $1 trillion. In fiscal year 2019 the IRS plans to cut an additional 2,200 employees.

    Logically, if you ran a business, you would employ enough people to ensure that you are getting the money that is owed to you. Since our government is facing a deficit of close to $1 trillion, you would think that you would want to INCREASE the funding for the collection arm of the government, NOT reduce staffing. Why in the world would you reduce the enforcement staff by 25% over a period 8 years?

    https://en.wikipedia.org/wiki/Internal_Revenue_Service

    The table below shows Federal tax revenue collected by each state. If you compare taxes collected to the state's GDP, you'll discover that Delaware is more generous than any other state, since the state collects 34.2% of its GDP. Minnesota is #2, at 31.9%. New Mexico is the only state that collects LESS than 10% of its GDP

    https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state

    Economists have determined that the 2017 has had only a minimal effect on economic growth, but will cause our national debt to rise sharply. During his 8 years in office, Reagan managed to TRIPLE the national debt.

    The last Republican president to balance the budget was Eisenhower - in 1957. LBJ did it again in 1969, and Clinton did it in 1988 and 1989. If the Clinton era tax rates had been left in place, our national debt would have been ELIMINATED by 2008.

    Then George W. got elected. His administration passed three tax cuts, and the debt exploded.

    I was an Economics major in college, so I understand that GDP = C + I + G. As a result, when the economy is in the dumps, as it was in 2008, then it absolutely makes sense for the government to spend more than it takes in. That also was true in the 1930's, when FDR pulled us out of the Great Depression.

    According to the 2018 IRS tax instructions, 17% of the government's income came from borrowing to cover the deficit. In a time of low unemployment and a strong economy, that makes no sense at all.

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    that guy in AZ Wrote:

    There are going to be a lot unhappy people this tax season because of the 2017 tax bill. Due to the loss of some deductions that they had previously (like state and local income taxes) people who used to get refunds are now having to pay money to the IRS. Those who ARE getting refunds, are getting less back than in prior years.

    In a move reminiscent of Reagan's "smoke and mirrors", the Trump administration ordered the IRS to lower the amount that was withheld, in order to give people the impression that the tax scam bill was actually saving them money. The withholding on my checks from the school district went down a bunch, and would have forced me to pay in to the government if my wife and I were younger than 65. As a result, I am getting back ALL of the money that I paid in to the IRS, all $38.29 of it - not even enough for a meal out for 2 people.

    If you are getting a refund check, there are only 4 offices in the entire country that do the processing - Kansas City, Fresno, Ogden, and Austin.

    If you owe money, you'll find that there are only 5 offices that process the returns. They are in Louisville, San Francisco, Cincinnati, Hartford, and Charlotte.

    Though the IRS brings in most of the revenue needed to fund the federal government, its resources have been cut year after year. In 2016 the American College of Tax Counsel wrote to the Congressional leadership stating, "We have watched the agency struggle with significant decreases in funding that have caused staffing and morale issues. In our practices, we have seen the negative impact this has had on our clients, the taxpayers.

    In the 2017 fiscal year, the IRS processed more than 245 million returns and collected more than $3.4 trillion in gross revenue, spending 34¢ for every $100 it collected.

    On June 28, 2018, Bloomberg News wrote, "The agency has been reeling from budget cuts. The current budget of $11.43 billion is less than in fiscal 2008, and the IRS pared about 15 percent of its workforce over the past five years. The enforcement staff has plunged by more than 25 percent since 2010.

    In the 2018 fiscal year, the U.S. federal government spent $779 billion more than it brought in. It's estimated that in fiscal year 2019 the loss will be close to $1 trillion. In fiscal year 2019 the IRS plans to cut an additional 2,200 employees.

    Logically, if you ran a business, you would employ enough people to ensure that you are getting the money that is owed to you. Since our government is facing a deficit of close to $1 trillion, you would think that you would want to INCREASE the funding for the collection arm of the government, NOT reduce staffing. Why in the world would you reduce the enforcement staff by 25% over a period 8 years?

    https://en.wikipedia.org/wiki/Internal_Revenue_Service

    The table below shows Federal tax revenue collected by each state. If you compare taxes collected to the state's GDP, you'll discover that Delaware is more generous than any other state, since the state collects 34.2% of its GDP. Minnesota is #2, at 31.9%. New Mexico is the only state that collects LESS than 10% of its GDP

    https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state

    Economists have determined that the 2017 has had only a minimal effect on economic growth, but will cause our national debt to rise sharply. During his 8 years in office, Reagan managed to TRIPLE the national debt.

    The last Republican president to balance the budget was Eisenhower - in 1957. LBJ did it again in 1969, and Clinton did it in 1988 and 1989. If the Clinton era tax rates had been left in place, our national debt would have been ELIMINATED by 2008.

    Then George W. got elected. His administration passed three tax cuts, and the debt exploded.

    I was an Economics major in college, so I understand that GDP = C + I + G. As a result, when the economy is in the dumps, as it was in 2008, then it absolutely makes sense for the government to spend more than it takes in. That also was true in the 1930's, when FDR pulled us out of the Great Depression.

    According to the 2018 IRS tax instructions, 17% of the government's income came from borrowing to cover the deficit. In a time of low unemployment and a strong economy, that makes no sense at all.

    Right, or correct. Trump cut the amount that is taken out of worker's paychecks, which made it look like every American was getting a tax break, as it turns out, people who don't necessarily pay any taxes (income brackets) realized there was an extra 5 bucks less taken out for taxes, which when they filed, would have gotten nearly all of it back, except that is if they're enrolled in the ACA, which they receive a subsidy for, the lowered amount earned reflects what the IRS will need to make up because of the shortfall in the amount the taxpayer has paid in. So, when people do their taxes on any free website like turbotax, they're going to find out they need to pay back the shortfall because they're tax cuts weren't really tax cuts at all. People like us expected a $700 plus refund, like me & wife, got a rude awakening, we ended up paying back $379 for her ACA subsidy to the IRS.

    Trump and the GOP tax cuts for the middle and lower classes was nothing but smoke and mirrors, like you stated in your post. The really big winners of the GOP/Trump tax cuts were the wealthy (a high income bracket)

    thanks for bringing this to light!

    "Average Tax Refunds Down 8.4 Percent As Angry Taxpayers Vent On Twitter"

    yahoo.com/huffpost/average-tax-refunds-...
    "Scads of taxpayers are complaining on Twitter that they have always received a refund — but now owe the IRS instead."

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    A few days ago, one of the contributors published an article on how to fix the "tax scam" bill:

    https://www.dailykos.com/stories/2019/2/26/1837870/-How-to-Fix-the-Disastrous-Republican-Tax-Law?detail=emaildkcs

    A bill that incorporates these ideas would be a no-brainer for the House, but a tougher sell in the senate until the Democrats get majority control, and get enough votes to be "veto proof".

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    According to today's Washington Post, the federal government spent $310 billion more than it took in during the first four months of the new fiscal year, a 77 percent jump from the same period a year ago. Naturally, the Republicans want to cut Medicare and Social Security to fix the problem.

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    Just drove by the third gun shop that has recently closed down. This is an ultra conservative area. Trump is killing the middle and lower classes. By the time the election rolls around any body that had a civics class could get elected.
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    More negative news, Harley Davidson Mfg. in Kansas City has shuttered it's plant there, putting 800 workers on the lamb. This is after former speaker of the house visited the factory boasting of the trump tax cuts, Harley D tax went from 35% down to 21%. Harley is going to build a factory in Taiwan to mfg. their cycles.

    https://www.nbcnews.com/business/economy/harley-davidson-workers-stunned-plant-closure-after-tax-cut-n876901

    This is significant because Harley once stated the jobs in KC were going to move to their York, PA assembly plant. I will mention that republicans always harp on about jobs, jobs, jobs, and it's especially detrimental to Missouri's republican governor who is moving to sign an anti-abortion bill as we might all be aware of. BTW, the governor of Pennsylvania? a democrat.

    Another noteworthy story, rolling thunder will not motor to DC anymore, says their spokesperson, but Donald said they will. Hmmm, maybe Donald is going to give them a billion or two $$$? so they can continue their motoring stupidity.

    youtube.com/watch?v=2MsyzoZOQpE

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    Mark my word ; the worst is yet to come; Trumps actions on Huawei will have huge consequences. China is 'pissed" about this and Trump forgets that China is quite a "bit" larger than this banana republic. They will win in the end, not Trump