Trump Tax Cut Proposal Underway

[Forty Two]

Key points of the proposed legislation:

Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35%; keeps tax rate for those making over $1 million at 39.6%
Increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600
Preserving the Child and Dependent Care Tax Credit
Preserves the Earned Income Tax Credit
Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000, half the current $1,000,000
Continues to allow people to write off the cost of state and local property taxes up to $10,000
Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts
Repeals the Alternative Minimum Tax
Lowers the corporate tax rate to 20% – down from 35%
Reduces the tax rate on business income to no more than 25%
Establishes strong safeguards to distinguish between individual wage income and “pass-through” business income
Allows businesses to immediately write off the full cost of new equipment
Retains the low-income housing tax credit

http://www.zerohedge.com/news/2017-11-0 ... s-released

[pErvinalia]

And watch revenue plummet and your economy tank.

[JimC]

Less revenue, sure, but who needs an EPA? Savings there!

[Brian Peacock]

They could cover that by slashing 10% off the defence budget.

[pErvinalia]

Defense budget went up an insane amount under Obama, and now Trump. Fucking nutso country.

[Brian Peacock]

Defence spending is like a drug - the more you have the more you want.

[Tero]

There! We may get sicker, but Canada will never invade us:

One of those who voted against the NDAA was Tennessee Republican Bob Corker, chairman of the Senate Foreign Relations Committee and a member of the Senate Budget Committee. He released a statement saying he voted against it because the bill "exceeds the current budget caps by nearly $83 billion." Corker also was critical of the Overseas Contingency Operations funds, which he said have "been repeatedly abused to fund normal operations at the Departments of Defense and State in order to avoid exceeding statutory spending caps."

https://www.cnbc.com/2017/09/18/senate- ... nding.html

https://www.google.com/amp/s/www.cnbc.c ... nding.html

[PsychoSerenity]

I don't know enough about US taxes to really get into all the details, but it does look like it'll be major tax cuts, particularly (unsurprisingly) for the rich.

For example just looking at the income tax standard deduction, rates and thresholds:
An individual earning $25K gross would see their effective tax rate drop from 9.3% to 6.2% leaving them an extra $770 for the year.
Whereas someone on $250K would see their rate drop from 25.5% to 23.0% leaving them an extra $6350 each year.
Someone being paid a million, though their effective rate would drop by less than 1%, would still get and extra $6900.

And that's before the major new incentive for people with lots of money to pay accountants to make use of the huge drop in corporation tax.

Also - inheritance tax, they're doubling the threshold to over $11 million before you have to pay anything and are planning to get rid of inheritance tax altogether in 2024. What the fuck?

[Tero]

We also pay 7% Soc Sec, 14% if self employed as well as 3-5% state tax in most states. 0 in Florida where tourists are taxed with sales hotel etc taxes.

[Forty Two]

I don't know enough about US taxes to really get into all the details, but it does look like it'll be major tax cuts, particularly (unsurprisingly) for the rich.

For example just looking at the income tax standard deduction, rates and thresholds:
An individual earning $25K gross would see their effective tax rate drop from 9.3% to 6.2% leaving them an extra $770 for the year.
Whereas someone on $250K would see their rate drop from 25.5% to 23.0% leaving them an extra $6350 each year.

That's rather progressive, because the lower income person gets a reduction from 9.3 to 6.2 gets a 33% tax cut while the person making the higher income gets an 8% tax cut. It is incongruous to suggest that the rich should pay progressively higher tax rates, and then claim it's a tax cut "for the rich" when there is a tax cut, even when the tax cut by percentage is much higher for the lower income person than the higher income person. There literally would be, under that thought process, a way to reduce taxes without it being a tax cut for the rich. The rich are paying dramatically higher rates to begin with, so giving them an 8% reduction is still more dollar-for-dollar than a 33% tax cut for the lower income person.

The tax cut plan does raise the level of income to which zero taxes are paid as well.

Someone being paid a million, though their effective rate would drop by less than 1%, would still get and extra $6900.

The only alternative is to reduce taxes only for those make less than 50,000 per year, but since they hardly pay any federal income taxes at all, it would be an irrelevant tax cut in terms of juicing the economy.

And that's before the major new incentive for people with lots of money to pay accountants to make use of the huge drop in corporation tax.

It's a huge drop in corporate tax, yes, but only because we had just about the highest corporate tax rate in the world. The goal is to make us competitive with some of the civilized western European countries.....

Also - inheritance tax, they're doubling the threshold to over $11 million before you have to pay anything and are planning to get rid of inheritance tax altogether in 2024. What the fuck?

Sounds good. All that money is doing is moving from parents to children, and it's all income that was already taxed when earned. And, the reality is that that with the complexities of American law in this area, it's better for everyone to just eliminate the tax. Nowadays, the tax is just an incentive to create a paper industry in living trusts and various vehicles to pretend that an inheritance is not an inheritance but a "transfer on death."

[PsychoSerenity]

Christ. Only you.

[Animavore]

It's basically theft.

[Forty Two]

Christ. Only you.

The United States has the third highest general top marginal corporate income tax rate in the world, at 38.92 percent. Due to the recent reduction in Chad’s corporate tax rate, the U.S. rate is exceeded only by the United Arab Emirates and Puerto Rico (and Puerto Rico is actually part of the United States...).

So, remind me again why the US must be in the top 3 of corporate tax rates in order to not be undertaxing the rich? What are the other 190 +/1 countries doing?

By region, Europe has the lowest average corporate tax rate, at 18.88 percent (26.22 percent, weighted by GDP).

So, even at 20% rate, we're still going to be above Europe's average corporate tax rate.

What's the deal with Europe and it's unfairly low corporate tax rate? Only me? Or, only you, Psycho?

[PsychoSerenity]

So, remind me again why the US must be in the top 3 of corporate tax rates in order to not be undertaxing the rich?

Sorry Forty, I'll have a bit of trouble with that unless you can remind me again where I said it must? I seem to have temporarily misplaced that bit of reality.

[Forty Two]

Well, I had to guess at what your beef was, since all you said in reply to my post was "only you" - so, if it wasn't the corporate tax reduction you had a problem with, what was the specific issue you took, causing you to reply with a one sentence insult, rather than a substantive response. I didn't say anything mean to anyone. I just responded regarding the tax cut.