Tax Reform

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Re: Tax Reform

Postby Kane » Fri Oct 20, 2017 8:27 pm

John Galt wrote:presidents are almost entirely irrelevant though, since congress has the power of the purse. surpluses pretty much only are shown in your graph while republicans were in power congress, it's part of why we hardly ever have surpluses, republicans have largely been out of power in congress


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Nope.

Reagan passed tax reform in 85 with GOP control of Senate. Got blue dog Dems to help him out.

What did Congress or POTUS under Bush Sr. do to change taxes and/or budget? They raised the top rate and did nothing on capital gains as the country entered a recession. Then Bush Jr...firm control of house and Senate.

The real answer here is that this isn’t necessarily an issue of party but of dogma - supply side economics don’t work as well as the proponents say. They clearly don’t pay for themselves. The actual issue seems to be that when a party controls the House, the Senate, and the Executive...they just don’t give a f**k anymore. Party time.

It used to be that we couldn’t afford the ACA...and now it hasn’t been repealed. But we can afford tax cuts now?

Give me a break.
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Re: Tax Reform

Postby John Galt » Fri Oct 20, 2017 8:34 pm

Kane wrote:
John Galt wrote:presidents are almost entirely irrelevant though, since congress has the power of the purse. surpluses pretty much only are shown in your graph while republicans were in power congress, it's part of why we hardly ever have surpluses, republicans have largely been out of power in congress


Image

Nope.

Reagan passed tax reform in 85 with GOP control of Senate. Got blue dog Dems to help him out.

What did Congress or POTUS under Bush Sr. do to change taxes and/or budget? They raised the top rate and did nothing on capital gains as the country entered a recession. Then Bush Jr...firm control of house and Senate.

The real answer here is that this isn’t necessarily an issue of party but of dogma - supply side economics don’t work as well as the proponents say. They clearly don’t pay for themselves. The actual issue seems to be that when a party controls the House, the Senate, and the Executive...they just don’t give a f**k anymore. Party time.

It used to be that we couldn’t afford the ACA...and now it hasn’t been repealed. But we can afford tax cuts now?

Give me a break.


lol it's the same thing i posted. since 1900 it's been mostly democrats

"nope" he says. lmao

and did you not look at your own graph? where the surpluses line up? lmao
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Re: Tax Reform

Postby Spider » Sat Oct 21, 2017 5:19 am

He's right. As has been pointed out, that all falls apart when you stop irrationally pretending deficits don't matter. (Deficits being what we're actually talking about) Consider the trillions we've paid in debt and interest to cover insane Republican tax cuts. The trillions our descendants will keep on paying. In actual effect, a tax cut without a prior and proportional spending cut is just another way to blow money, regardless of what Arthur Laffer thought. Republicans have been on the "deficits don't matter" train for my entire life. Republican Jesus got that ball rolling, and I guess they've decided it would be blasphemy to stop and think about it for 5 minutes.

We've had this exact discussion so many times on OGPCF. Republicans have been driving batshit deficits since Reagan, and they've convinced the ignorati that it's a good idea. (Actually, now that we've got the complete Obama administration [and the costs of the 2008 crash and Great Recession] behind us, might be interesting to see if Democratic administrations have caught up...oh wait, we're going by Congress. So, really, Obama is completely off the hook, it would seem...all those crazy deficits to keep the economy from collapsing completely, well, Republicans get to eat that, too. Which is only fair, considering.)

Basically, Galt, your argument hinges on my unfortunate literalism when I said "spending"...but for the covered reasons, it's nowhere near that simple. But you know all this already.

Apologies. I shouldn't have been so precise. I should have said "blow money" or "insane deficits" or "catastrophic debt growth" or something.
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Re: Tax Reform

Postby Saz » Sat Oct 21, 2017 7:20 am

Wall Street Journal wrote:Proposals to cap the amount that Americans can contribute before taxes to 401(k) plans and individual retirement accounts are unsettling professionals in the retirement industry.

Congressional Republicans are looking for ways to generate revenue to support broad reductions in individual tax rates. One idea is to limit the amount of pretax money households can sock away for retirement saving. Such a move would likely generate significant political blowback, but it hasn’t been explicitly ruled out, stirring worry among industry lobbyists.

Many opponents say any plan that cuts contribution limits would slow the growth of the asset-management industry.

Members of the House Ways and Means Committee are widely expected to release a version of the tax bill by mid-November. Specifics on a wide range of issues remain unclear. Emily Schillinger, a spokeswoman for the Ways and Means Committee, declined to comment.

Lobbyists and others in the retirement and financial-services industries who have spoken to congressional staff and committee members say lawmakers are looking at proposals that would allow 401(k) participants to contribute significantly less before taxes than what is currently allowed in a traditional tax-deferred 401(k). An often mentioned amount is $2,400 a year. It isn’t clear whether that would apply only to 401(k)s or IRAs or both.

Currently, employees under age 50 can save up to $18,000 a year in a 401(k) before taxes, while those 50 or older can set aside up to $24,000. In an IRA, the annual contribution limits are capped at $5,500 and $6,500 for the same age groupings. The 401(k) limits are scheduled to rise to $18,500 and $24,500 in 2018.

Dave Gray, a senior vice president at Fidelity Investments, said a $2,400 limit would give the company a significant concern and would essentially require trade-offs between the certainty of the immediate deduction and the prospect of tax-free retirement income.

Mr. Gray, speaking Friday at the U.S. Chamber of Commerce in Washington, said that implementing such a system would be extremely difficult and could take the industry 12 to 24 months to implement.

There are two basic types of retirement accounts. With a traditional 401(k) or IRA, account holders generally get to subtract their contributions from their income. But they must pay ordinary income taxes on the money when they withdraw it, typically in retirement when many people are in a lower tax bracket.

With the second variety, called a Roth 401(k) or Roth IRA, there is no upfront tax deduction but the money increases tax-free.

Under some of the proposals being floated, contributions above the amount set for tax-deferred savings would have to go into a Roth account. The change wouldn’t affect existing balances in traditional 401(k)s and IRAs, those people said, and it is likely that any matching contribution from an employer would continue to go into a tax-deferred 401(k) account.

Congress’s goal in making the switch is to reduce a tax break that is projected to cut federal revenue by $115.3 billion this fiscal year so the money can be used to pay for lower tax rates. The switch could boost government revenue over the next decade, the period when the tax bill will likely face a $1.5 trillion cost constraint.

Shifting to Roth-style accounts would move tax revenue from the future to the near term.

That would help Republicans meet budgetary targets now but could cause problems with a requirement that prevents the tax bill from expanding long-run deficits if they want to pass a bill without Democratic votes under a fast-track process.

With the aim of targeting retirement-tax incentives more directly at the middle class, lawmakers may also make changes to an underused tax credit that acts like a government match to retirement savings.

If lawmakers enact these changes, many savers will face a choice between maintaining their current savings rate or their current take-home pay.

The sacred cows of the tax code—including breaks for home mortgage interest and state and local taxes—are being challenged. WSJ's Richard Rubin explains. with real cows. For example, someone in the 25% income-tax bracket who puts $1,000 into a traditional 401(k) today would save $250 in taxes, reducing take-home pay by a net amount of $750. But if forced to put $1,000 in a Roth account, take-home pay would decline by the full $1,000, because there was no tax deduction. The advantage is that there would be no taxes due when the money is removed later from the retirement account.

When the White House unveiled the outline of its tax-overhaul plan in April, officials promised to preserve existing tax breaks for retirement plans. A more detailed plan released by the White House and congressional leaders in September pledged to retain “tax benefits that encourage work, higher education and retirement security” but left open the possibility of changes to “simplify these benefits to improve their efficiency and effectiveness.”

Sen. Rob Portman (R., Ohio) said he was skeptical about the idea of lower pretax deferrals for retirement savings.

Mr. Portman said Thursday that he didn’t want to make the decision just for revenue reasons. “I’m deeply concerned about it,” he said. “I don’t think you want to disincentivize retirement savings in any way right now.”

In a statement, Senate Minority Leader Chuck Schumer (D., N.Y.) criticized the idea of capping pretax contributions to retirement savings accounts. “Republicans are so determined to cut taxes on the wealthy that they’re willing to tax the retirement accounts of millions of middle-class Americans,” he said. “The GOP’s total devotion to millionaires and billionaires comes at the expense of every family using a 401(k) to save for a decent retirement.”

Americans have saved about $7.5 trillion in 401(k)-type accounts, plus $8.4 trillion in individual retirement accounts, according to the Investment Company Institute, a trade group for mutual funds. But some researchers say a significant percentage of Americans haven’t saved enough to maintain their standard of living in retirement.

Industry groups have an incentive to keep the status quo and are trying to preserve the tax benefits of the current system. This year, AARP joined with groups representing employers and asset managers—including Fidelity Investments, T. Rowe Price Group Inc. and TIAA—to form Save Our Savings Coalition to lobby for the existing tax treatment of retirement plans.

“Asset managers tend to not like the Roth approach,” says Shai Akabas, director of economic policy at the Bipartisan Policy Center in Washington, which is studying the potential impact on saving rates of a Roth switch. Because taxes are taken out at the beginning, he said, assets in retirement accounts, and the fees these companies collect on them, are likely to be lower.


https://www.wsj.com/articles/talk-of-re ... ding_now_2

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Re: Tax Reform

Postby Winchester » Sat Oct 21, 2017 8:34 am

Tax policy via budgeting gimmicks.
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Re: Tax Reform

Postby Kane » Sat Oct 21, 2017 11:18 am

Can’t tell if this is just them testing the water or desperation.
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Re: Tax Reform

Postby Kane » Sat Oct 21, 2017 11:21 am

John Galt wrote:
Kane wrote:
John Galt wrote:presidents are almost entirely irrelevant though, since congress has the power of the purse. surpluses pretty much only are shown in your graph while republicans were in power congress, it's part of why we hardly ever have surpluses, republicans have largely been out of power in congress


Image

Nope.

Reagan passed tax reform in 85 with GOP control of Senate. Got blue dog Dems to help him out.

What did Congress or POTUS under Bush Sr. do to change taxes and/or budget? They raised the top rate and did nothing on capital gains as the country entered a recession. Then Bush Jr...firm control of house and Senate.

The real answer here is that this isn’t necessarily an issue of party but of dogma - supply side economics don’t work as well as the proponents say. They clearly don’t pay for themselves. The actual issue seems to be that when a party controls the House, the Senate, and the Executive...they just don’t give a f**k anymore. Party time.

It used to be that we couldn’t afford the ACA...and now it hasn’t been repealed. But we can afford tax cuts now?

Give me a break.


lol it's the same thing i posted. since 1900 it's been mostly democrats

"nope" he says. lmao

and did you not look at your own graph? where the surpluses line up? lmao


Reagan had the Senate for six years and Bush Jr had the house and the Senate.

Regardless, supply side economics were never a Democratic proposition - this stuff came from the right. Do you dispute that?
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Re: Tax Reform

Postby Kane » Sat Oct 21, 2017 11:23 am

And who cares about surpluses when we’re cutting taxes without controlling for costs?
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Re: Tax Reform

Postby PPark » Sun Oct 22, 2017 1:40 pm

John Galt wrote:eh, just expand the death tax instead to stop concentration of wealth among people who don't even deserve it. insanely high tax rates is why the US has health care insurance -- it was a perk to attract talent at a time when taxes were confiscatory. i don't think we should go back to that, but instead the death tax should take in excess wealth to put in some sort of sovereign fund or earmarked for infrastructure to benefit us all


Yeah, meh. No. You use the data that you possess to set policy rather than emotion. Our rates should be a simple exercise in mathematics with the debate set around the value of known elasticities. For example, Laffer focuses nearly exclusively on labor supply or as if we haven't accrued data and knowledge over the past decades. Use the data, use our knowledge, and set effective public policy.

Now if we utilize basic free market theory we know in mature markets with sufficient competition profit margins should be low. Unfortunately that is currently not the case. How'd we get here? Many bought an efficiency argument that was sold as "consumer welfare" (lowest consumer price) and that set off an M&A craze. Our market competition measures are producing appalling data. If you will this is confiscatory policy because it effectively distributes benefits to many beyond their value to the economy.

The reality is since we've pursued these types of policy (1981-) the bottom half of our taxpayers pretax income has stagnated AND they pay in taxes what they receive in transfers. Or half of our country derives no benefit from our economic or tax policy. Yeah, that powerful segment of our population that creates all our problems:) The current Republican tax reform proposals simply don't belong in a serious debate and it illustrates the imbalance of power our public policy has created.
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Re: Tax Reform

Postby John Galt » Sun Oct 22, 2017 2:53 pm

i wasn't being emotive when i said the fact health insurance exists is because of confiscatory taxation policy. this is fact. between 1940 and 1946 enrollment with health insurance more than tripled to 30%. this was because of the revenue act of 1942: corporations had tax rates of 90% on profits in excess of prewar revenue. so loopholes were sought and loopholes were found. employee benefits could be deducted from profits. in addition to a 94% personal income tax rate at the top of 32 brackets with the bottom being 23%, this was a way to lower taxes both on the worker and the talent the company was trying to attract as well as on the company itself. and so health insurance itself came to be because of the very distorting effects of confiscatory taxation, and this form of paying for healthcare has had long term impacts on american society.

i'm fine with progressive taxation but 90% is too much; the rich are the most mobile people in society and we want to be attracting them to our country not repelling them. the laffer curve does exist but instead of using it to find optimal revenue for the government it is just used as an excuse to lower taxes. a major problem is government does not sell what it does right very well; people think NASA is around a fourth of the budget when it is under 1%. to convince people to raise taxes to pay for things the benefit the country one must actually state what those benefits are. democrats typically talk about things that are redistribution of wealth which just pisses tax-payers off: they worked for the money. talk about infrastructure, talk about schools, talk about basic healthcare. that makes tax increases on tax-payers something that they can stomach. and making it very clear who is impacted by the death tax so it's not like they're taking 90% of the bonds your grandmaw bought you when you were a itty bitty baby but rather they are using the inheritance over 5 million dollars to help all of us is something i think a lot of people would support -- if they really understood what was going on. people think that they'd tax any inheritance. and be upfront, it's to encourage people to not hold on to wealth for generations, but to move the money around
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