ADDED: In the NYT: "Shocking: Trump Makes the Right Choice With Jerome Powell." That's by Steven Rattner, "who served as counselor to the Treasury secretary in the Obama administration, is a Wall Street executive and a contributing opinion writer."
The other candidate — the economist John B. Taylor, the reported choice of Vice President Mike Pence and other hard-line conservatives — is openly hawkish, having warned for years that the central bank’s easy money policy was stoking future inflation.
Most prominently, in November 2010, Mr. Taylor was among 24 signatories to an open letter to Ben Bernanke, then the chairman, attacking a signature aspect of the Fed’s efforts to stimulate a sluggish economy, its “quantitative easing” program of purchasing debt in the market to keep interest rates low....
While the president’s musings on monetary policy have been characteristically inconsistent and even incoherent, he’s mostly sounded like this: “I do like a low interest rate policy, I must be honest with you,” he said in April.
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147 comments:
I still can't figure out if this new tax reform bill will cost me money or not.
I think, at best, it'll be a push.
As a family of six, we will lose over $20,000 in personal and child tax exemptions. But for a few more years we will get an additional $600 in child tax credits.
I seriously don't like them getting rid of our 20k+ in personal exemptions though.
A goy chairman of the Fed. Is that a first?
Paul Krugman, hardest hit.
"Paul Krugman, hardest hit."
Followed by Now I Know. Has anyone ever seen them together?
eric said: "I still can't figure out if this new tax reform bill will cost me money or not.
Just wait a couple of days, several websites will have online calculators to help you figure it out.
The characters over on ZH think this is bad news (of course they think everything is bad news) accusing him of being a business-as-usual, swamp dwelling, big bank loving "Republicrat" (I don't know what that is but it sounds bad).
"I seriously don't like them getting rid of our 20k+ in personal exemptions though."
The important thing is cutting taxes for the job creators. They have been suffering, so they can't supply supply, hence normal folks haven't seen especially impressive income growth for many decades. If you relieve the suffering of the job creators, then everybody wins. That's called a win-win!
Ireland cut the corporate tax rate to 13% and boomed. Come to think of it, why tax institutions at all? They don't eat, suffer, and die. Tax people, not abstractions!
It has nothing to do with interest rates. It's the money supply. The interest rate is just a lever to change the money supply, because the Fed buys back or sells debt until the interest rate meets its target.
Occasionally it changes the target a little if the money supply looks too big or too small.
What little bit I know about Taylor, I would have preferred him. I am very uneasy about the ramifications of QE.
The NYT is in a tough spot. They need to start bracing their readers for what is coming out about both Trump and Clinton.
Winning. Bigly.
eric, where did you get that info from?
Ratner is a slimy, smarmy individual
Just like John Koskinen.
More Winning
The tax cuts will stimulate the economy and that brings in more than enough to pay for cuts and pay down debt UNLESS interest goes up on financing the first 20 Trillion already borrowed. Rising interests will create a death spiral when there was no inflation anyway. Trump has to prevent that Banker World Government attempt to kill off the USA and make Trump take the blame.
Blogger AllenS said...
eric, where did you get that info from?
11/2/17, 3:24 PM
A couple of different accounts I follow on Twitter going over different aspects of the bill.
They are upping the child tax credit by $600 and doing away with personal and child exemptions.
I was assured the DOW wouldn't even return to 20,000.
I'm not sure how the tax plan will play out for me. Our $10K Property Tax bill is high, but we pay very little interest now on our mortgage, and I'm tempted to just pay it off.
Well, what a relief that Rattner supports him. I mean, he's a top economist, and they always know the best thing to do.
eric, read this --
LINK TEXT
Hey Fabi, would you believe 10,000?
I think this is all Monopoly money, and there is going to be one hell of a crash and re-adjustment to reality.
As Instapundit says, what can't go on forever, won't.
One thing being touted as an improvement is a reduction in the number of individual tax brackets from 7 to 4.
Can anyone from either side tell me why this is considered a good thing? Almost no one is hand calculating their brackets and since the progressive system we have is not going away, why is it a positive to minimize the number of brackets and thus create steeper steps in that progressivity? I don't get it, unless it's just snake oil for the masses like the "put it on a postcard" bullshit.
I'm more interested with the plan's effect on the economy than on me personally. We need more growth than we've had for the last several years or entitlements will bury us.
The real simplification is getting rid of exemptions to the extent possible.
Open up Turbotax and browse the interface. You will tons of places where you will say "why does this exist?" - and no doubt find plenty to simplify.
One thing being touted as an improvement is a reduction in the number of individual tax brackets from 7 to 4.
For that matter, how about a continuously variable sliding scale, i.e. infinite brackets ?
"continuously variable sliding scale"
If you're serious, that would make hand calculation impossible unless there was an exception.
"The real simplification is getting rid of exemptions to the extent possible."
The "fill it out on a postcard" would be a huge boon (except for accountants). I have no idea whether the current plan will allow this.
The number of brackets is unimportant. Whenever I hear someone tout this as an advantage, I tend to stop listening to them.
Only when people like me find a better destiny to park our filthy lucre, Hagar.
Why do tax brackets matter. Why 7 to 4? Well, I can tell you about that, but first, look at what the tax brackets were like in 1975 --
LINK TEXT
I was paid every two weeks, based on a monthly pay scale. I received what I thought was a nice raise in the 1970s, and took home, after taxes $1 more every pay day.
Can anyone understand that? If you think things are bad now, you have no idea what things were like, probably before you were born, or entered the work force.
"The "fill it out on a postcard" would be a huge boon (except for accountants)."
No. It's bullshit. Every figure on your postcard would be backed up by documentation and worksheets. They get to postcard size by reducing the 2 page 1040 to a half page by moving those items to another form and outright trickery such as removing signature lines.
It was bullshit when Cruz proposed it and it's bullshit now.
Blogger AllenS said...
eric, read this --
LINK TEXT
Yep, that's pretty much what I read on Twitter. My tax rate will be 12%.
Without any deductions, that would be about $11,000 annually.
If I still had the personal and child exemptions, that would lower my taxes $2,400.00. Maybe a little more.
I don't think I can take the standard deduction, even doubled, and still get the child tax credit, deduct all my charitable giving, mortgage interest, etc. So, I'll most likely still be doing a complicated tax return.
But I think it'll come out as a wash. Maybe I'll lose a little.
I know only a little about money-supply policy, which puts me just a little ahead of Yellen and a little behind Volcker.
The thing is, the Fed cannot predict the future. They suck at that worse than Al Gore at a climatology conference. This is their big problem. They think they know what's going on and what is going to happen.
The best thing is for them to behave rationally or else to just stop, the way Ron Paul wants.
Not to mention that you're probably not going to want to put your tax and income information on one side of a postcard and put that in the mailbox. It's bullshit.
"No. It's bullshit. Every figure on your postcard would be backed up by documentation and worksheets."
No exemptions = no worksheets = no documentation
"The best thing is for [the Fed] to behave rationally or else to just stop, the way Ron Paul wants."
That's my understanding of what Taylor supports; rules-based behavior. I was excited when I saw he was in under consideration..
"No exemptions = no worksheets = no documentation"
Nonsense.
"Nonsense."
If you mean they'd never do it, I do not disagree.
It should have been Taylor. He prefers 'rule based' policy were Fed decisions on rates are transparently calculable. Rates would be meaningfully higher than today under the typical 'Taylor Rule' calculation. It is debatable if that would be a bad thing...
Rattner is guilty of contributing wisdom to the crappy Obama auto bailout. After that he was an Obama administration media shill disguised as an economic sage.
Ratner is another liberal political hack. He was Obama’s car czar.
Employing dozens of people makes you evil apparently as you're not eligible for the pass through rate. Accountants. Evil.
"If you mean they'd never do it, I do not disagree."
They didn't do it so why are they pushing the postcard? And even with 0 exemptions you'll still need documentation and calculations for your wages, capital gains, interest, and on and on.
It's snake oil for the simple-minded.
Steve Rattner was a cash-for-clunkers proponent. His support for Powell is a contraindication.
"They didn't do it so why are they pushing the postcard?"
They were pushing it today?
"And even with 0 exemptions you'll still need documentation and calculations for your wages, capital gains, interest, and on and on."
Add your wages, capital gains, interest and enter on line 1.
I don't know if I'm personally helped or hurt either. Will have to run calcs on 2016 to get a sense. Given the income thresholds for the new rates it is difficult to tell but gut says it's a cut for me...
They were pushing it today?
Yah Ryan and Brady with postcard props.
The best way to make sure we can fill out taxes on a postcard is to add up all of the expenses of the gov, and then divide by the number of Americans. Everybody gets the same tax bill. This is what Jesus wants.
All men (and gals, and boys/girls) are created equal by Jesus = all should pay their equal share re taxes.
Duh.
"Republicans say you can file your taxes with a postcard if new bill passes; H&R Block shares drop"
If I bought individual stocks, I'd be buying on the dip.
Susan Collins already wetting her pants so it's all for naught if they can't keep the other wetters dry.
I was trying to move closer to my job, but the housing in that area is super, ridiculous expensive, and it was going to be a stretch for me as it was. But the reduction of my commute from 50 minutes to 10 minutes was going to make it worth the sacrifice. "Going to be" is the key phrase here. Between the loss of state income tax and mortgage interest deductions, I'm back to the drawing board. Bastards!
BTW, rich people don't have big mortgages. Its upper middle class people who have the big mortgages.
They should cut spending instead of transferring the tax burden to another group!
"BTW, rich people don't have big mortgages. Its upper middle class people who have the big mortgages."
A) I agree. A lot of folks don't care about maximizing leverage, they'd rather own their stuff. And that still leaves annoying taxes, ins, staff and maintenance type costs.
B) Even if they were to have mortgages, I think the current cap is a million dollar loan. So, that don't go far re ballin'.
Just sayin.
The elimination of the personal deductions is a hard hit especially for larger families like Eric indicates.
So you get an almost doubling of the Standard Deduction for a married couple from 12K to 24K. However if you also loose the personal deductions or exemptions for dependents this is going to be a negative.
At the current (I believe) $4050 per person times 4 children = $16,200 and then your own personal deduction for a couple of $8,100 that is a total of $24,300 lost personal deductions not including the increased Standard Deduction
It isn't clear if the dependent deduction/exemptions still exist.
"They were pushing it today?"
Step right up.
BTW, rich people don't have big mortgages.
Some don't bother but many rich people take out huge mortgages and reinvest the capital in higher ROI projects. Mortgage money is cheap and cheaper still when you don't need it.
Households earning <$30k currently pay almost no income taxes.
They pay plenty of payroll taxes: about 17%.
There's this theory among tax-dorks that if you say nobody earning less than $30k must pay, then you kill the "everyone pays" myth and encourage the notion that those near the bottom can just be free-riders.
That theory left the building about ten years ago.
*should be "tax dorks"-- tax is the modifier, and the hyphen is neither required nor correct.
(Households earning <$30k) pay plenty of payroll taxes: about 17%
Yes, but this is for entitlement programs with the expectations they'll receive this back after age 67. And at an income of <$30K, they'll probably get more than they paid in, assuming average life expectancy.
The problem is that are not paying anything to support the big federal government system they're voting for. They get all the benefits of big government, with no pain of paying for it.
I'm not too happy with this either as it affects many of my (previous) small mom & pop or family pass through clients S Corp LLC A 25% rate for pass-through businesses. Instead of getting taxed at an individual rate for business profits, people who own their own business would pay at the so-called pass-through rate. There will be some guardrails on what kinds of businesses can claim this rate, to avoid individuals abusing the lower tax. I assume they mean S Corp etc and not Sole Proprietorships which are already taxed at the personal rate.
For many small mom & pop S Corp owners this is also a negative in that 90K of income would be taxed at 12 percent while income that they may currently be not using or retaining in the Corporation would be NOW taxed at 25% instead of the new 12%.
If that is the case then most small biz S Corps that have profits will be removing all profits as income to the owners and not retaining capital to expand the business. Each year there will be a dance of maximizing income and then reinvesting into the S corp to have capital which with to operate the business. Mom & Pop S Corps are usually formed as such for liability protection of personal assets that are separate from the business. AAAAAND to not have to pay SS, Medicare and other payroll taxes (self employment taxes) on all profits. This last point is significant.
To get around the 25% pass through of retained profits, S Corps can pay the owners more income as employees, which will lower the profits of the company...and add to the employee(owners future SS funds)
OR.....Just re form as a schedule C/Sole Proprietorship and protect the owners from liability in some other way and pay taxes at your lower tax bracket. (Once your personal income is over 90K it is a push anyway so it depends on how large or profitable your company is) Big umbrella and inland marine policies are good for liability and loss. The advantages of the S Corp will not be so advantageous at the smaller operating levels.
Some don't bother but many rich people take out huge mortgages and reinvest the capital in higher ROI projects. Mortgage money is cheap and cheaper still when you don't need it.
Sure, they may do that. But the big mortgage is not a necessary part owning their primary house. Its "optional" for them, and they'll adjust their situation as necessary. Its the upper middles who have the big primary mortgages for their homes if they want to live in in-town neighborhoods. Middle class people also have big mortgages in high cost real estate markets like Boston, most coastal towns in California, and a few others (Denver is now the highest cost real estate market relative to the area's income levels - I live in Denver. Its a heart-breaker).
Look the problem with this is the cowardice of the republican party. They wanted to cut business taxes (I think it was needed) without getting criticized for meany spending cuts, or for not cutting the taxes of middle class people.
They should address the big problem in the room: Spending. But they're cowards. So they won't.
Dust Bunny Queen, that's not the way taxes work for S and LLC corps. I don't know what personal knowledge you're dealing with, but it's not correct.
Anyway, we could start by lowering C-corp tax rates in America. That's basically a double-tax, and it's why real C-corps are keeping so much money overseas.
Tax everyone on net, at a simple rate, and you eliminate the problem.
It's still rearranging the decks chairs.
Almost as if Congress doesn't believe in lower taxes, or reducing spending, despite their re-election rhetoric.
Not surprisingly, Time misleads readers with their first paragraph:
"Corporations, the wealthy and some parents would be helped by the Republican tax reform plan unveiled Thursday, while real estate agents, residents of high-tax states and people with serious illnesses would be hurt.".
The article give more accurate information further into the article, much of which belies their opener. No credibility. TIME: Winners and Losers in Tax Reform Bill
Fewer brackets means it's less likely that a raise or working more hours will push a person into a new tax bracket, with the attendant deterrent marginal affects.
They need to cut spending, then lower taxes and simplify the tax code.
Current Real Estate interest and tax deductions are currently embedded in the cost of all our homes, even if we own relatively modest homes and do not itemize. This is because things which increase values at the top, also lift values at the bottom. And things that depress housing demand and prices at the top, cram down values at the bottom.
Removing this will be painful for a lot of people, including people who think this won'e affect them.
Oh, gosh, it's exhausting talking about income taxes. Tax brackets. Crap. I thought we all learned this in high school decades ago.
It might be easier with a VAT. Then we could all just be ignorant of the money stolen from us by our various governments. Don't worry; it'll all be 18%-ish, after profits, and 17%-ish, income-wise.
Or we could just have a tax guy come to our doorway every few months. It'll be noice.
Here's a good take in the effects of various tax policy changes. It has pretty colored graphs!
Or we could just have a tax guy come to our doorway every few months. It'll be noice.
Ah, the Hagar method!
"It might be easier with a VAT."
Taxing consumption is, imho (NTM the opinions of many folks who actually know economics), the best way for the gov to raise revenue while minimizing F-ing over businesses and economic growth.
If you don't like the hidden aspect, just make it a sales tax.
Of course, libs don't like this regressive sorta thing. And, I doubt the con residents of the many con states that mooch re Fed dollars paid v received would like this either. But, it's a winner, economically.
Oh gosh, Bob is plum wore out thinking about taxes. By all means, let's go to VAT
An issue that I haven't seen addressed is if they are going to raise the amount of income that a Social Security recipient can receive BEFORE their SS income is taxed.
file a joint return, and you and your spouse have a combined income* that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits. More than $44,000, up to 85 percent of your benefits may be taxable.
*That is on your AGI + non taxable interest and 50% of SS benefits.
It seems that if they are really trying to help the middle class, they might want to look at increasing that limit of income for taxability of SS benefits.
Removing this will be painful for a lot of people, including people who think this won'e affect them.
People like me who believe in dynamic scoring would argue while the deduction is reduced home prices would be positively impacted not only by lower rates and thier higher thresholds but by higher economic growth and the subsequent improvements in household wealth.
There’s not much point to tax reform for those who don’t.
A certain know it all friend took all his money out of the stock market day after the election, he is still certain it is going to crash below pre-election values,
Like a stopped clock waiting for its moment.
Dust Bunny Queen, that's not the way taxes work for S and LLC corps
Bob. I don't know about LLCs personally however, in our own S Corp profits and losses are 'passed through' to the share holders proportionally. Since it is just my husband and I, 100% of the profits or loses are reported on a K-1 to us and we report that income or loss on our personal taxes and taxes at whatever our rates are at that time.
The profits are taxed whether we take the money or it is retained. However, we can (and sometimes do) take an owner draw the following tax year if there is excess retained earnings. This is non taxable to us as we shareholders have already paid taxes and is counted as a reduction of shareholder equity on the Balance Sheet.
Much like owners of a partnership, shareholders of an S-corporation are taxed on their allocated share of the business’s profits — no matter whether or not those profits were actually distributed to them. But, also like an owner of a partnership, a shareholder of an S-corporation is not taxed on distributions from the business, so long as those distributions do not exceed his cost basis in the S-corp.
A shareholder’s cost basis in an S-corporation is increased by his allocated share of the business’s income and by contributions he makes to the business. His basis will be decreased by his share of the business’s losses and by distributions he receives from the business.
One of the advantages of the S Corp is that money that is distributed to shareholders is not taxed with self employment tax. Of course we still need to, as owner operators, pay ourselves a reasonable salary for the work done....for example, me as part time book keeper (secretary/treasurer). The company and the employee (me) both contribute to FICA and other payroll taxes, The company part of the payroll and the payroll taxes are deductions.
So for the working owners the payroll to owners should be increased to take advantage of the lower personal rates in the first tier of PROGRESSIVE taxes.
If a small shareholder is currently at the 12% new tax bracket, and is not a working owner, pass through income at 25% is not very attractive. In family owned businesses often a parent or other relative will have made a modest contribution and will be taking owner draws (non taxable return of investment). Investors also like the pass through losses. Once the company becomes profitable and they hope it will be, by then they will have taken all of their owner draws or reduced equity to zero. The silent investors really don't want to report any profits and at 25% even less so.
I realize we are talking pennies to the dollar here, but it is all part of the planning process as to whether the structure makes sense for the individual
(REPOSTED for clarity)
I think that the only way to pay for single payer would be through something like a regressive VAT, and since the US has the most progressive tax code in the developed world, you would think that liberals could go along, but they think that punishing the rich is a bigger social good than single payer.
Before adopting a VAT, we would need ti repeal the 16th Amendment authorizing the income tax. Otherwise, we'll end up with both a VAT AND an income tax.
You can't move the point of tax collection downstream in the earn-save-spend cycle without taxing something twice.
In particular a VAT taxes again money that's been taxed once and saved, effectively stealing the savings of old people.
Epstein has a variant that would fix that, namely all earnings are paid into an IRA type instrument and only taxed when they're withdrawn (which can be anytime). Then the savings of old people, already outside that, aren't taxed again when spent.
So it's a sales tax that doesn't double tax the elderly.
“The profits are taxed whether we take the money or it is retained. However, we can (and sometimes do) take an owner draw the following tax year if there is excess retained earnings. This is non taxable to us as we shareholders have already paid taxes and is counted as a reduction of shareholder equity on the Balance Sheet.”
Not sure if you can actually call them “retained earnings”. More likely something like “undistributed stockholder contributions” or “stockholder capital” accounts. The problem is that “Retained Earnings” is really a Sub-C concept. I say this as someone faced with trying to convince the other stockholders (my brothers) in a closely held corporation to convert from Sub-C to a Sub-S, and that is the sticking point - getting rid of our retained earnings (my current proposal is to pay them out on the books as dividends, but then moving all except for the individual income taxes that would need to be paid over to “contributed capital”). In a Sub-C, the distinction is whether or not personal income tax has been paid on them. Importantly, in a Sub-C, Retained Earnings are owned by the corporation, and the individual stockholders don’t have an individual stake in them. Which is exactly the opposite from a Sub-S, where every stockholder essentially has their own capital account.
May Trump get everything he aims for in this tax bill. It will be so winning, it will pay for itself, generate investments and expand opportunities for good work.
And I DO hope it greatly reduces the number of IRS workers, we added nearly 20,000 in the Obama years, to police the health care taxations; lucky for them, a dismissal in the coming Trump era will be soft on these folks because there will be so many other jobs besides the BigGovtPoliceState for them to choose from.
God speed, america
Several problems with a VAT tax. One is that it is hidden, more so even than our withholding hides our income tax. That lends itself to rate creep, and places less downward pressure on tax revenues (and, thus, govt spending). Secondly, often income taxes are not replaced by VAT, but instead augmented. Again, the result is faster government spending growth. Thirdly, depending on how it is implemented, govt revenues can boom and bust more, due to economic cycles. People often spend less in recessions, resulting in less govt revenues, at a time when short term Keynesian stimulus may be useful (and, no, Nancy Pelosi was not correct that there was a Keynesian multiplier that allows the govt to drive the economy out of a recession by massive spending - that was a big reason that the Obama Recession lasted for most of his term of office).
Sorry guys but it looks like the socialists have won.
I voted for Trump. He promised me a tax rate reduction. Hillary promised me a tax rate increase. I figured Trump was lying to me but wouldn't raise my taxes. I figured Hillary for once in her life was truthing. So I voted for Trump knowing he was lying to me. Guess what, he was lying to me. My taxes will be going up if this proposal goes through.
Sorry guys but it looks like the socialists have won.
That's hardly surprising, ARM, since millennials are products of our increasingly pathetic educational system.
Sure, business is happy - they've transfer their tax burden to ME. My accountant has declared I'm screwed by this travesty. I am, apparently, the work horse here. I may never vote republican again. BASTARDS! This is my reward for hard work and sacrifice.
"I am, apparently, the work horse here. I may never vote republican again. BASTARDS! This is my reward for hard work and sacrifice."
Before getting too riled up, why not look at your tax burden (even if up a bit) re what other folks like yourself pay in other countries? Of course it makes sense to also consider what you get re gov stuff re those foreigners. E.g., incl that you contribute to a military and security apparatus that at some point will likely get to an annual burn rate of a trillion bucks. Also, you are altruistic because the Rs are working to even further advance the mooching of poor con state re the rich blue states re Fed dollars paid in taxes v Fed dollars coming from DC. That's nice of you.
Anywho, odds are that even if you end up paying more tax, you're still gettin' a good deal.
And, shouldn't you blame yourself for not being richer? You claim to be a hard worker but if you worked harder, you'd be a job creator. Then you'd pay less, e.g. Romney paying 14%.
Just sayin'
To be clear, obviously I'm not saying Romney's rate was acceptable. His rate was a terrible job killing crime that resulted in the middle class not being able to experience notable income growth (v inflation) for many decades.
So, that must be lowered. Then the middle class can thrive.
Before getting too riled up, why not look at your tax burden (even if up a bit) re what other folks like yourself pay in other countries?
Oh, stick it in your ear! I don't work hard just to have other people plunder my money away. I'm not hear to make your life comfortable. Its government sanctioned theft. I've not voted for all this government.
Before getting too riled up, why not look at your tax burden (even if up a bit) re what other folks like yourself pay in other countries?
You know what else about those countries? EVERYBODY pays high taxes in those counties. They don't cull out the upper middle class and stick it to them.
If I'm going to be poorer, I'm going to be sitting in my back yard reading Jane Austen. I'm not going to be working long hours only to have my money taken from me to make stranger's life easier.
When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it. - Bastiat
Lily,
I'm only saying that there's always gonna be a floor re taxation for normal folks. And, it's always gonna feel like the floor is too high.
But, it probably isn't too high. We gots this crazy gov doing shit for poor losers, and all sortsa important obligations to military folks, and all the so-called profitable military/security complex stuff that most folks are scared into supporting (e.g. cause a dude w/ a rental truck killed and injured folks).
Anywho, even if run well and not wasteful/mooched/special-interested (i.e. not what it is now )the Feds are always gonna be +or- 20% of GDP. So, re taxes, yur gonna be around where you're gonna be. If you want a Romney rate (i.e. 14%) you need to make Romney money.
eric said...They are upping the child tax credit by $600 and doing away with personal and child exemptions.
--
Well..that sure sounds "simplified"...
I'm thinking CPAs etc are rejoicing.
But here's the thing. I really was about to sign a contract to build a new house, a more expensive that the one I own - reducing my commute time from 50 minutes from the suburbs, to 10 minutes from an in-town neighborhood. That in-town house was going to be a lot more money, which was kind of a stretch for me. But with the elimination of state income taxes and real estate taxes for loans in excess of $500 thousand (Denver housing has gotten really expensive), I'm out - I cannot afford this new house. My tax burden with this new house will be too much (the state income tax loss hurts the most, but the real estate tax reduction hurts too).
So, I won't move out of my more affordable, suburban family home - so no new family with young kids to go to the local school will live in the this house (I'm now an empty-nester - so this type of thing will impact the local schools). And the real estate agents won't make their income on the buy/sell transactions - so they'll have less income. And the builder won't build that more expensive house (all his employees will have less work!). And I won't need the new furniture or window coverings I was planning to buy.
Also, if there are enough people in my situation, the values of the higher cost houses will decline (lower demand = lower prices), which will put downward pressure on all levels of houses including more modest houses. Sure, some people will win, but there will more more losers than that idiot Paul Ryan realizes right now.
Fill out your taxes on a post card..that's like an accordion...
More face news. It surely was not a "wild season." Quite routine actually. Both the tax proposal and the Powell nomination were already known in advance and likely had very limited impact on investor decisions.
Other than that, quite an informative headline.
This above described situation is really happening to me. I'm not making any of this up. I'm devastated. I'm losing my dream home, and keeping my 50 minuets-each-way commute. I hate the republicans. Bastards!
" Guess what, [Trump] was lying to me. My taxes will be going up if this proposal goes through.
At this point it's pretty hard to tell whether your taxes will go up or down under this proposal. I sure can't figure it without knowing what happens with deductions, AMT etc.
At this point it's pretty hard to tell whether your taxes will go up or down under this proposal. I sure can't figure it without knowing what happens with deductions, AMT etc.
Oh, I'm getting fleeced. Confirmed by my accountant. I'd already had him run the numbers before I signed a contract for that house I talked about above. When I called him today in a panic, he confirmed that I was going to be hurt by this proposal (if it passes). He kinda laughed when I called and said, "yeah, this is not good for you".
I really thought my opinion of the republicans was about as low as it could be. But they're so gutless, the refuse to cut spending to pay for the business tax cut, and instead have come for my money. I already pay a boat-load in taxes. Jerks!
Lily,
Even if I wasn't loaded, I'd have a hard time feeling too bad re your situation.
Your situation was very borderline viable, otherwise you wouldn't give an F re tax implications. Which, IMHO (cause I'm fiscally conservative), means that yur better off not taking the leap.
And, it's silly to fuss about builders in hot markets. You should be happy that they bothered returning your call. IOW, they're gonna be just fine.
Anywho, I do agree that it'd be best for the Rs in DC to fail in their tax plan. IMHO, we can't afford another 1.5 trillion in debt over the next ten years (and then much more than that over the following ten years, and so on). W's tax cuts failed to pay for themselves. Reagan tripled the deficit and doubled the debt, even after adding back taxes after the initial tax cuts.
OTOH, I sorta give zero Fs if R voters want to go ahead and give job creators more dough via deficit spending.
I'm torn.
Blogger LilyBart said...
He kinda laughed when I called and said, "yeah, this is not good for you".
--
But good fer # runnin' folks
Lily, so you're of Left orientation? In what state?
Left orientation? I'm a limited government type. In Denver. Well, the cheaper suburbs of Denver.
Even if I wasn't loaded, I'd have a hard time feeling too bad re your situation.
You're an a######
Ant eater is amusing we've had 10 trillion in new debt, but of course the cob still subscribescto static anakysus, which means they have to score it by ridiculous rules, I don't think they'vecscrewed it. Like the 86 tax bill but give them time.
Dint worry the three musketeers flake corker AMD Mccain will kill it died, it doesn't have a prayer ofpassing.
All you folks who voted for Trump and now are bitching about your taxes under this new Trump tax plan, hahahaha. You deserve what you got, dummies.
"When will the markets recover? My best guess is never" Paul Krugman.
For this level of expertise, they give out Nobel prizes?
Well, it's true. We may never go back to the Obama levels of stagflation and ennui, having seen that as the epitome for 'socially conscious capitalism'.
Thanks but no thanks.
AReasonableMan said...
"Sorry guys but it looks like the socialists have won."
Because , like you, they are dismally ignorant of how markets work.
Now the subject is tax policy.
Some very intelligent people on this thread are discussing it.
You might want to pay attention.
Rabel.
If the majority of tax payers and non-taxpayers us the 1040EZ form it amounts to a post card. Or a half sheet of paper form. So it isn't nonsense from that point of view.
Rusty said...
Some very intelligent people on this thread are discussing it.
You might want to pay attention.
I am. They are the ones for whom the scales have fallen from their eyes regarding the Republicans and tax cuts. Republican tax cuts are only ever about the Romneys of this world, the rich donor class, even regular well-off people rarely benefit and we all get stuck with a huge deficit. I wish someone had told Reagan that deficits matter.
But good fer # runnin' folks
Mixed bag for accountants. Maybe good for business for some. They were excluded from the new improved pass through rate which isn't very stimulative. Our private equity clients got to keep their carried interest rate though.
This is where ARM would like to point out all the economic devastation Trump has caused.
The Dow may never see 20,000 ever again!!! (sarc)
rehajm said...
Our private equity clients got to keep their carried interest rate though.
Well, there's a surprise.
The 20% corporate rate is a tremendous improvement in global competitiveness that will help repatriate some of the trillions in capital sitting idle overseas. That supposedly unobtainable 3 percent economy that was a unicorn under Obama will arrive here shortly, if not here already.
Imagine the conversations we'd be having if Hillary had won: How much higher should personal tax rates go? How else can we punish companies trying desperately to move to Dublin and Toronto? Who should we get for the next presidential roundtable on how to jumpstart this stagnant economy? Deficits? What difference at this point does it make?
rehajm said...
Imagine the conversations we'd be having if Hillary had won:
Deficits? What difference at this point does it make?
That is exactly the conversation they are now having.
“Four legs good, two legs bad.”
“Four legs good, two legs bad.”
I have no idea what that's supposed to mean. All I know is lefties couldn't muster a peep about deficits while the Obama administration was racking up $7 trillion in added debt over 8 years but now that Flat Earth scoring projects $1.5T over a decade every lefties a deficit hawk. It took electing Trump to do that. Reason enough to do it again.
The deficit fell steadily during the Obama years and now it's going back up. Where is the Tea Party now?
“Four legs good, two legs bad.” - It means you are a partisan hack mindlessly repeating a meaningless mantra - tax cuts good, deficits don't matter.
It means you are a partisan hack mindlessly repeating a meaningless mantra - tax cuts good, deficits don't matter.
First, fuck you for the name calling you brat...second I never said deficits and debt didn't matter to me, I was pointing out lefties conveniently forget about them when their preferred leaders rack them up. But I suspect you knew that.
If you are going to come in here and mindlessly repeat discredited drivel you get what you deserve.
Simply saying the Democrats are part of the problem doesn't excuse the Republicans, at all. Hold your own side accountable for once.
It's clear tax policy isn't your area of expertise- it isn't obvious you have any area of expertise- but since we're giving each other advice ARM, I encourage you to take an objective look at this new proposal. The more I discover about it the more I realize it addresses much of what 'your side' wants.
The deficit fell steadily during the Obama years and now it's going back up. Where is the Tea Party now?
No, that's distorted. That measures the deficit from year 1 of his administration, which was 'emergency time' spending - spending spiked in that year. Spending fell back from that time to more normal levels of ruinous spending. If you don't understand that, you're either dishonest or a useful idiot.
And I'm still angry about the over spending - nothings changed there. And I'm angry at all my greedy, selfish co-citizens who think my money's supposed to be spent on them.
Broken clock
rehajm said...
- it isn't obvious you have any area of expertise-
Unlike your practiced role as GOPe toady?
LilyBart said...
Spending fell back from that time to more normal levels of ruinous spending.
And now the deficit is going back up again. The tax bill increases the deficit. Unlike rehajm, I assume you are capable of assimilating this basic fact regarding tax policy.
I remember when it was reported that when informed that the higher tax rate would reduce revenue, Obama said he wasn't interested in revenue, he was interested in "fairness". Actually, the high rate that keeps so much money off shore is probably part of the fairness, anti-colonialist concept. Keeping US companies liquid assets stranded off shore makes more capital available for those economies. Money just can't sit in the bank, it has to work.
Keeping US companies liquid assets stranded off shore makes more capital available for those economies. Money just can't sit in the bank, it has to work.
When you tally the cash on the balance sheets of big US multinationals, like Apple, there's over a trillion dollars overseas just siting in the bank.
The tax bill increases the deficit.
1. The bill hasn't been implemented so you don't know what it has done.
2. Static scoring is an unrealistic view of the impact of tax policy. Take a look above thread at the comments demonstrating that this change in tax policy will force changes in people's economic behavior. Static scoring prohibits accounting for any those changes. Static scoring is anti-science.
3. Under Senate rules the bill can't increase the deficit outside the 10 year window, It can't pass if it does.
And now the deficit is going back up again.
And I guarantee you that I don't support that. But the problem is spending, not the tax code. The problem is the people who want government to spend on them.
Unknown said...
All you folks who voted for Trump and now are bitching about your taxes under this new Trump tax plan, hahahaha. You deserve what you got, dummies.
This isn't Trump's plan, this is Congress. The problem is that congress won't cut spending - so they just transfer the heavy tax burden from one group to another.
You can laugh now, but we're spending money we don't have, and eventually it will crush you too. Or, if you're old, it will crush you kids and grandkids. This kind of financial fecklessness will eventually hurt us all. So laugh all you want, while you still can.
If the mortgage deduction limitation goes in, you should see a reduction in housing prices above $500k.
Supply and demand
rehajm said...
Static scoring is an unrealistic view of the impact of tax policy.
What regular people hear:
Blah. Blah. Blah. Laffer Curve. Blah. Blah. Blah.
"I am. They are the ones for whom the scales have fallen from their eyes regarding the Republicans and tax cuts. Republican tax cuts are only ever about the Romneys of this world, the rich donor class, even regular well-off people rarely benefit and we all get stuck with a huge deficit. I wish someone had told Reagan that deficits matter."
No. No your not.
Join Ritmo in the line of peasants that think "the rich' are stealing from you.
Blah. Blah. Blah. Laffer Curve. Blah. Blah. Blah.
People respond to incentives.
rehajm said...
Blah. Blah. Blah. Laffer Curve. Blah. Blah. Blah.
People respond to incentives.
3% real economic growth.
the DOW at an all time high.
real unemployment under 5%. And not with part time jobs either.
Yet ARM et al will go to their graves praising Obama as the best president ever. I guess if your a public sector employee, like they are, who depends on raping the middle class, like they do, Obama was a great president.
There has been no inflection in any major indicator since Trump became president. Things were steadily improving, they continue to do so. Nothing has changed, in large part because Trump has done nothing of any significance.
ARM didn't read the pervious post....
Trump is not Hillary. That's profoundly significant.
Obama blamed the malaise of his administration on his predecessor and now his fan tries to steal credit from his successor. Oh, woe is Obama!
The desperate rationalization is fun to watch.
"There has been no inflection in any major indicator since Trump became president."
3% economic growth two quarters in a row.
Obama had two quarterly growth close to 5% for two quarters. Let's see what Trump does over a few years. His employment numbers are no better than Obama's.
Obama had two quarterly growth close to 5% for two quarters.
Was that after the infamous 'bailout'?
AReasonableMan said...
"Obama had two quarterly growth close to 5% for two quarters."
Uh huh. Out of eight years. Two quarters of a questionable percentage number. All the other quarter of his eight years were , when adjusted, less than 2%.
Lame ARM.
Trump has been at it for less than a year.
Trump's choking off the regulation pipeline is a major accomplishment that probably has helped economic growth. And contributed to the stock market's rise.
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