NYT editors, today: GOP tax reform doesn't help the middle class.— Guy Benson (@guypbenson) November 29, 2017
NYT news analysis, yesterday: Virtually every single middle-income taxpayer who takes the standard deduction (70%! of filers) will get a tax cut, as will a substantial majority of those who itemize. pic.twitter.com/PuOhZcXzLY
ADDED: I think — I don't know — that the NYT is expressing concern about taxpayers who itemize and have a big state-and-local tax deduction. I'm one of those taxpayers, but I used an on-line calculator that showed that my household would save around $1000 a year under the GOP plan. And we pay over $17,000 a year in property taxes alone. The new standard deduction is that big. So it looks as though there are a lot of people who currently itemize, who'll just be better off taking the standard deduction. Then there are the many many people — the majority of taxpayers — who are already taking the standard deduction and who'll get a much larger standard deduction. Why isn't the NYT happy for these people? I suspect — again, I haven't figured it out — that the NYT is looking at all the people who just don't owe much income tax. Once you've got your taxable income down to nothing, it doesn't matter how much more you could have deducted. So those people get nothing out of the bigger standard deduction.
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193 comments:
NYT - House Organ for TAX Hiking Democratic Party. + Can we get a standing ovation for all tax payer graft that goes to the mega insurance companies. Thank you.
150.00 per night tax on a a standard hotel stay in NYC. In Democratic hive mind, eating real kitty in the streets is an attainable goal.
It probably is something like yes they get more money in their pocket but the societal costs are bad. Looking at the tweet it also seems the NYT is relying on the assumption Congress won't renew the tax cuts. Even Obama renewed tax cuts.
Lefties so desperately need economic calamity for their messaging to work. If they're scared of this tax cut it is because they fear it will improve Americans standard of living.
My CPA/MST spouse reminds me not to speculate on the effects of policy yet to be determined. It is difficult enough once the policies are in place.
Tax rape(D) vote McAwful and get some of the Clinton goodness that we are missing out on.
Reading the comments, basically, if future policy deliberately undermines the tax cut and cancels it, it will be bad.
Thanks for the insight Twitter.
The liberal formula is pretty easy to understand. It's knee-jerk all the way. If Trump wants X, then X is evil.
Both Parties have irresponsible fiscal policies.
We can't sustain the give aways by the Democrats (though that Tool Krugman keeps telling people they can).
We can't sustain the tax cuts by the Republicans either (though Krugman, that Tool, says we can't afford THAT either...though it is the same amount of money. Odd that)
So I am left with a dilemma.
The Democrats want to TAKE my coin and give it to Jerome for...stuff.
The Republicans want to let me KEEP my coin for myself.
Both are bad. But I am pretty clear on which system I prefer.
It used to be that folks would promote tax reform on the basis that it was revenue-neutral.
The standard now appears to be that it be individual-neutral.
It's as if the New York Times crossword puzzle used the same words in every puzzle.
From what I have seen, if you have over extended yourself, living beyond ones means, and have attempted to take every tax advantage you can (in liberal parlance, are using tax loopholes to steal from the government) then you might struggle to see a benefit in cutting tax rates for the vast majority of people.
The biggest complaint I’ve hear prior to this is that corporations are going to be stealing from the working class because they get a tax break. It’s not so much that A is getting a benefit, it’s that B is also getting a benefit and that’s not fair.
It’s the old two scoops of ice cream. The more I see this the more It reinforces the notion that the left wants to see people in chains, beholden to the government.
It's all about resisting Trump. If Obama has proposed this plan, the NYT would think it was the greatest idea since Obama's last idea.
If the next tax law goes through, I will pay off my house. I'll still have the 10K property tax to deal with, and about 5K is state taxes, but that's about it.
> It's knee-jerk all the way. If Trump wants X, then X is evil.
I suspect that is the truth.
Still hoping for a flat tax rate, personally.
I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit. I recall that this was an issue that concerned them at one point in the past.
The tax reform on the right side of the graph is practically ejaculating money.
For that to happen, someone's balls have to be being tickled.
- james james
Ann, I wonder if you and Meade believe it's worth it to stay in Madison now that you are retired. One of many reasons we left Seattle after my husband retired was for lower property taxes.
LOL - why would you lefties care about the deficit? Under Obama, deficit exploded. Now you care?
I went to dive in to the data and NYT is vauge on their asumptions. Something about modeling a ‘typical’ taxpayer. Nothing about what states they’re from, their state and local rates, etc.
Weasel-ey!
This is the original analysis:
What the Tax Bill Would Look Like for 25,000 Middle-Class Families
It speaks for itself.
"eating real kitty in the streets "
What does that mean???
See ARM, the money isn't the government's yet. It is the people's. You can say that lowering taxes increases the deficit, but that assumes the government is not allowed to react to the fact it is taking in less from people. The government does not have this future money. It is fundamentally different than agreeing to pay for things with money we don't have yet.
This is a fundamental misunderstanding of Tea Party and Conservative tax policy that if you don't understand will leave you unable to have an intelligent discussion about it.
Re: Tax policy and deficits:
1- Economies are dynamic, not static. People respond to incentives.
2- Tax revenue is a function of a tax rate applied to activites associated with that rate. The level of activity is influenced by the tax rate.
3- Expanded economic activity reduces dependence on government support programs, improves real wages, and the economic security and well being of our citizens.
It is out in open now. The NYT says down is up, black is white and forwards is backwards. All the fiction that fits the Party Narrative.
The new owner of NYT is Big Brother. And George Orwell was fired on day one.
>I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit.
That's 1.7 billion on a 2017 deficit of $660+ billion?
Doesn't sound like a big deal.
What's the horizontal axis on that graph (I assume the vertical is taxable income)?
$17,000, if that’s all house tax, is too much. Way too much. Move to Indiana where my $2,000 a year allows me to live in a beautiful, 100-year-old home,
I will pay off my house
I don't know your situation, but you might be better off diversifying your investments, i e, not so much in your house. That's a whale of a property tax bill.
It speaks for itself.
No it doesn’t. They don’t reveal their methods and assumptions, specifically anout the households being measured. Based on thier disclosures it appears they ‘simulated’ households using unknown criteria in simulation.
Weasel-ey.
Horizontal appears to be tax delta- dollar change in tax from change in policy.
I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit.
Well lets see, the actual name is TEA Party for "Taxed Enough Already", so cutting taxes is the "issue that concerned them". They probably think other issues like the deficit could be addressed through simple spending cuts particularly through elimination of obsolete federal programs. For instance, it seems the CPB is hotbed of sexual harassment and it's federal cost to taxpayers is 445 million. That's 1/4 of the hole filled in before they even talk about the CPFB.
Literally any change to the tax code is going to benefit some people and cost others. This is because our tax code is a convoluted mess. The upside to this particular change is that it makes the tax code a bit (not much, but a bit) less of a convoluted mess.
That's such a big deal that I could not care less about the people who will lose just because they've been getting special favors from the tax code up till now. I bought a cheap house and live where taxes are reasonable. Why should the tax code reward people who live more expensive lifestyles in more expensive places? And why should the rest of the country relieve you from the poor choices you make in state and local leaders who gouge you with taxes?
"What's the horizontal axis on that graph (I assume the vertical is taxable income)?"
Go to ARM's link for a labeled version of the graph. The bottom numbers are the size of the tax cut each household will get under the plan.
EDH asks: What's the horizontal axis on that graph (I assume the vertical is taxable income)?
I wondered that, too.
You guys realize that even the mendacious Republican leadership is not claiming that all the middle class is getting a tax break. Well, one or two did, but then they had to retract their statements, so that doesn't count.
When the press favors something--like Obamacare--they find some people who greatly benefit by it. When they dislike something--like tax cuts--they find people who are filled with fear about the impact it will have on their lives.
I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit. I recall that this was an issue that concerned them at one point in the past.
OK....here you go.
STOP SPENDING SO MUCH OF OUR MONEY1111.
1. Stop wasting money on useless and duplicitous programs. Cut back on excess personnel.
2.Cut back on welfare benefits for the healthy and those that should and can be working. That also means stop giving money to people who are ILLEGALLY in this country.
3. Spend money at home instead of throwing it at corrupt dictatorships and waste overseas with no accountability. Spending money at home will increase the cash available in the US, increase jobs and put money into OUR people's pockets
4. Stop subsidizing every liberal wish list idea. If you have a business, borrow the money and rise and fall on your own.
STOP SPENDING SO MUCH MONEY!!!
There.
I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit.
I'm happy to overlook the characteristically partisan hypocrisy in your convenient situational concern over the deficit, and to note that I remain absolutely in favor of dramatically lower government spending to reduce the deficit.
That's 1.7 billion on a 2017 deficit of $660+ billion?
ARM tries to make things sound as bad as possible, the poor dear. That was a typo; he meant $1.7 trillion. That in turn is intentionally misleading, since $1.7 trillion on an annual deficit of $660 billion sounds awful - but the $1.7 trillion figure is what the CBO claims will be the effect of the tax cut on federal revenue over ten years.
To which I respond that the questionable forecast of $1.7 trillion in revenue reduction is paired with a lead pipe cinch guarantee of over $600,000 in median household income.
"You guys realize that even the mendacious Republican leadership is not claiming that all the middle class is getting a tax break."
-- Right. That's the nature of tax policy. The simpler it is, the easier it is. Just mouse over some of the dots. I don't know how the NYT is getting some of their numbers, on either end.
So your basic argument is that the Republican party, which control congress and the Presidency, has utterly failed the American public by refusing to address the real problem and has instead made it worse by giving tax cuts to the wealthy?
ARM: I believe the Republican government has recommended budget cuts routinely.
The only way to not "give tax cuts to the wealthy" is to write checks to people who don't pay any taxes. More checks, because anything else is unfair.
Getting more peop, e tl take the standard deduction has another savings. The simpified form means people will save money on tax preparers and software.
Also time. Even if they spend the extra time sleeping or watching netflix, it still has value even if it can't be dollarized.
John Henry
1.7 trillion deficit?
1- Static scoring is a lie.
2- CBO has a lengthy history of being very very wrong about anything it scores.
How come Dems insist that a tax cut has to be "paid for" but spending never does?
Economic growth will "pay for" the tax cut. What pays for the spending increases?
Of course some government spending increases economic activity, but a lot of it has the opposite effect. Yet this test is never applied to the decision making process by Dems.
"How come Dems insist that a tax cut has to be "paid for" but spending never does?"
-- Spending pays for itself. Haven't you read Keynes? /SimplifiedEconomics
"the NYT is looking at all the people who just don't owe much income tax. Once you've got your taxable income down to nothing, it doesn't matter how much more you could have deducted. So those people get nothing out of the bigger standard deduction."
This hints at the real scandal of American taxation: the poor and lower middle class don't pay enough. If you are going to shovel money at people like Europeans, tax them like Europeans. Solidarity forever!
Lots of people in states like NY and CA who deduct state and local taxes end up getting hit by the Alternative Minimum Tax anyway, so loss of the deduction (along with the elimination of the AMT) is not such a big deal. Though I've always said they should keep the AMT (essentially a flat tax) and eliminate the regular income tax.
So your basic argument is that the Republican party, which control congress and the Presidency, has utterly failed the American public by refusing to address the real problem and has instead made it worse by giving tax cuts to the wealthy?
Your dishonest attempts to sound clever only reinforce the notion that you and your knee-jerk partisan colleagues are incapable of making a good-faith argument.
Still, it's possible that your comments reflect your stupidity in addition to your dishonesty, so I'll try to answer your mewling, but I can't promise to do it using words simple enough for you to understand.
The Republican Party will have been partly successful in improving the general welfare by cutting taxes and simplifying the tax code. More cuts and more simplicity would be even better. They have not yet succeeded in dramatically cutting spending. Since they're politicians, it's unlikely that they will make tough choices before they're inevitable, which is unfortunate, but since there's no sincere concern about deficits in either party, the partial success of lowered taxes is the best realistic outcome.
Middle class is a nebulous and changing definition that when used as an argument shows the ignorance of the person arguing.
What exactly IS middle class? Is it a state of mind? Is it a set or moral codes? Is it a firm number of income earned? Is it the sum total of income and assets?
If it is the income, which seems to be the criterion that the economically challenged want to use, then ....pick a number! $50K income? $120K ? $35K? $200K?
I can tell you for sure that what is "middle class" income in rural Iowa or even Des Moines would have you eating out of a dumpster in Palo Alto.
What is "middle class" in some areas (cough NY City or San Francisco) would have you living like a literal KING in Arkansas
The civic-minded like to say that taxes are what we pay for a civilized society.
So more taxes = more civilized. See how that works? And if you want to cut taxes you are anti-civilization. Tax-cutters, why are you against civilization?
$17,000 in property tax on the Althouse? That's approaching max-civilization for me.
The US already has the most "progressive" tax structure in the OECD.
And thats even including FICA taxes (SS and Medicare), state ans local and property taxes.
In other developed countries the poor and middle class pay a higher proportion of tax collections.
The US also has the most intricate taxation system anywhere.
Marco Rubio wants to raise the child tax credit for the poor with children who otherwise wouldn't be getting a tax reduction which would raise the corporate tax to 22% from the current 20% plan.
Professor --
If you're paying $17K a year in property taxes, then (#1) you have a mighty fine house up there in WI or (#2) the real property tax rate you pay is through the roof. If #2 is the situation, then you need to work for change in WI, which, I belive, is a pretty high welfare state.
In either case, why should I subsidize your life choices by allowing you to deduct your high tax payments from your income. The new tax plan caps your deductibility, and so it should. You're getting a free ride.
Sorry :-( but that's the way it is.
Pookie Number 2 said...
The Republican Party will have been partly successful in improving the general welfare by cutting taxes and simplifying the tax code. More cuts and more simplicity would be even better. They have not yet succeeded in dramatically cutting spending. Since they're politicians, it's unlikely that they will make tough choices before they're inevitable, which is unfortunate, but since there's no sincere concern about deficits in either party, the partial success of lowered taxes is the best realistic outcome.
As noted, many people get a tax increase. The tax system on the personal income side is not notably simplified, according to tax accountants who have weighed in on the issue. The only clear-cut result is a large tax cut for the wealthy. And no effort to address spending. A complete fail, that adds to the deficit unnecessarily.
A complete fail, that adds to the deficit unnecessarily.
That statement reflects an amazing level of economic ignorance, but since you've amply demonstrated that you prefer to remain uninformed and partisan, I'll have to leave it there. Feel free to keep spouting idiotic talking points - apparently that's important to you.
"I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit. I recall that this was an issue that concerned them at one point in the past."
Mitch McConnell said it would only take just .04% growth to wipe out the 1.4 billion hole in the budget.
But the bill takes away the exemptions, doesn't it? Not great if you have kids or other dependents. Increasing the child tax credit doesn't help that much.
Yes, I have done both the State GDP and Median income "PPP" (purchasing power parity) calculations for the last dozen years. Its only recently that its been reported regularly.
I have used several cost indexes for this. I like the MERIC series for all states.
The current MERIC index range is from 188 for HI to 84 for MS.
AR is 88 vs CA 140.
What it can't show, because its not easy to get too fine grained, is the enormous range within some states. In CA between cities there is a huge difference between San Francisco and Sacramento.
"The nonpartisan Congressional Budget Office has estimated that doing away with the mandate would result in nearly 13 million more people without health insurance" --
https://www.nytimes.com/2017/11/19/health/tax-plan-obamacare-mandate.html
The NYT's argument seems to be that repealing the Obamacare mandate is a de-facto tax increase because many of those who choose not to buy the insurance will no longer receive the Obamacare subsidies, and therefore their tax burden will increase.
And perhaps so, but, it's a strange "tax increase" that those subject to it can avoid paying merely by choosing not to pay it.
"The only clear-cut result is a large tax cut for the wealthy."
I don't think it's clear cut at all. Could you please defend this statement?
Mitch McConnell or someone said the average working class family would save about $2200.
And no effort to address spending.
The absurdity of dismissing productive policy because it doesn't address a pet issue. Better governance would begin with dividing up larger bills into smaller ones that can pass.
It will simplify tax returns for a great number of individuals as fewer will itemize.
More "EZ" forms.
Thats not the intricate part of US taxation, but thats what the greatest number of filers will see.
Even the graph shows that a majority of the test cases the NYT made are getting a cut.
The NYT and the Left (I repeat myself) are dishonest on tax policy.
They should come out and simply say, "We generally oppose tax cuts, because we affirmatively believe "society" deserves more of your money, than you do."
"The NYT's argument seems to be that repealing the Obamacare mandate is a de-facto tax increase..."
-- That can't be right. The mandate IS a tax.
As CA "high income" taxpayers I/we will be hit substantially. Not sure yet of how much.
Turbo Tax will be quite busy. And losing customers probably.
The standard deduction has all sorts of advantages, like no paperwork; some people choose it even though they pay more in taxes.
It's no secret that Madison has super-high property taxes. Astronomically high.
What do we get? Well, lots of studies about how things are wrong. Those cost money.
More evidence we live in a dynamic world where people respond to incentives:
Obama spent $826 billion on The American Recovery and Investment Act in a single year and never achieved greater than 2.6% annual growth. Policy 'experts' begin to claim 3% growth is permanently unobtainable...
By being not Hillary Trump is on track to achieve greater than 3% GDP growth for 2017.
Blogger AReasonableMan said..."I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit. I recall that this was an issue that concerned them at one point in the past."
And your side demagogued it as "throwing granny off a cliff". Thanks (for nothin').
Interesting rebuttal to Guy's claim here: https://twitter.com/ianmilne/status/936042799752810496
I've not done the research to see if either or both of them are involved in chicanery.
As noted, many people get a tax increase.
Ah - but who did they vote for?
It's the corporate tax cut that most benefits the rich (including the wealthy foundations and institutions). Essentially it increases earnings and thus the value of the ownership interests, which are predominantly owned by the wealthy. The individual impacts are much harder to generalize. Most of what you read about the individual tax impact is partisan bs.
The wealthy and the middle class get more benefit than the poor because most poor people do not pay federal income taxes.
My federal income tax will go up nearly 20% under these plans. That is because I have unusually high deductions, including a large deduction for medical expense. I also will lose deductions for mortgage interest expense and state taxes.
It's nice to try to be "fair" to everyone but it's not possible. There are winners and losers in every bracket.
You could tax the rich even more, but where does that get you? The country needs investment. The rich are the people with money to invest. We need investment because we need much higher growth. If growth does not accelerate significantly, all the social promises we are pretending to make will not be redeemed because we will lack the money to do so.
Accelerating economic growth is the number one economic need for the country. It's far more important than "fairness." Fairness is hard to define, but create more opportunity and the fairness will follow.
ARM said:
"As noted, many people get a tax increase. The tax system on the personal income side is not notably simplified, according to tax accountants who have weighed in on the issue. The only clear-cut result is a large tax cut for the wealthy. And no effort to address spending. A complete fail, that adds to the deficit unnecessarily."
I know you post nonsense like the statement above just to irritate others here. I despise you for that spiteful behavior.
The other itemized deduction that goes away, that can be a big hit for some people, is student loan interest. I'm pretty sure that losing that deduction will result in me paying more in taxes.
I'm okay with that. Why should other people be subsidizing my kid's college education?
Voting for the House Of Representatives ought to be limited to net federal income taxpayers.
I know you post nonsense like the statement above just to irritate others here. I despise you for that spiteful behavior.
+eleventy. ARM is a rotter. I wish he would catch Trumpit's eye, she has the proper tone for him.
John McCain said he would vote for the tax bill.
I see McCain is on board. He must have gotten my email. ;-) I implored Flake, too, but not sure if he's coming around.
ARM,
If we get 2 million more people working, as we have in just 10 months, that means 200mm more paying taxes. That will help shrink the govt.
We have had 3 major income tax cuts: Under Coolidge, Kennedy and Reagan. All resulted in significantly more taxes collected overall. Due to improved economy.
See the Laffer curve. Surely you do not disagree with this, do you? We may disagree about where we are on the curve and whether increasing tax rates increases or decreases tax revenues. Only an economic nincompoop would disagree with the shape of the curve and the general concept.
Folks like you understand so little about economics that you probably think that McDonalds could increase sales and profits by raising the price of a Big Mac to $10. The only reason they don't is out of the goodness of their heart. Or perhaps fear of govt.
The real problem is not revenues, it is spending. As PDJT pointed out in his speech yesterday, we have spent $7 trillion in the Middle East in recent years. It would be very helpful to have even a couple trillion of that money.
John Henry
What real problem ARM? That the left are corrupt and use our tax money for graft and waste?
Blogger David said..."It's the corporate tax cut that most benefits the rich"
That's the basis for ARM's claim that "The only clear-cut result is a large tax cut for the wealthy."? US corporate taxes are way out of line compared to other nations. They have to be cut. Our competitors have forced our hand.
@Althouse, you are both right and wrong in the analysis you added. You wrote:
"the NYT is looking at all the people who just don't owe much income tax. Once you've got your taxable income down to nothing, it doesn't matter how much more you could have deducted. So those people get nothing out of the bigger standard deduction."
That has been a standard Democrat talking point since the turn of the millenium, that tax cuts go to people who pay nothing or next to nothing in taxes. Pelosi, in particular, was vociferous about this talking point back during the Bush administration. So you're right.
But it's also true that the Times, being the Times, would find something to complain about even if Donald Trump came up with a credible plan to end world hunger and bring about world peace. Once a publication develops a reputation for knee-jerk opposition then it's perfectly fair to tune out what they write.
(Goes for ARM, too.)
More subtly, the elimination of credit for state and local taxes in high tax states like New York will certainly result in pressure being put by residents on the politicians to cut those taxes, and the Times does not like that at all.
I'm in California, so I am expecting to get hosed by the Trump tax plan, as I have been getting hosed by taxes for decades, and have no indication that the hosing will cease.
However, in general, I am for reducing Corporate tax rates, and reducing personal income tax rates in general. Also, I would like to simplify the code.
So, although the hosing may continue, I will support the hosing.
As a political matter, if the tax cut is not passed, the Left will demonize Trump as "unable to get anything done." So, to avoid that, I will learn to like the hosing.
As an example of improved economic activity, look no further than Wisconsin. Foxconn is building a plant that will employ 3,000 initially and eventually 13,000 people.
Some that is an additional 13,000 people working and becoming tax payers. Many of them, I hope, will be people who are currently tax takers. That is, people living in govt housing, on food stamps, ADC and so on.
Some of it will be a reshuffle. Many of the Foxconn hires will, I suspect be people already working, moving to a better job. But the woman who moves from clerking in the 7-11 opens up a job in the 7-11 for one of the tax takers.
The end result is more people paying taxes and increased revenue. Then supercharge that with fewer people taking taxes and reduced spending.
A pretty powerful engine.
I don't think this is the day I am going to get tired of too much winning either.
John Henry
Will there be a mass exodus from NY, CA, NJ to fly-over country? Will these migrants gentrify the heartland?
@John Henry, weren't you down in PR when Hurricane Maria blew through? Or am I thinking of someone else? Is all well with you?
Benson is a sloppy writer. Fake but accurate.
Benson also misses the major issue. Should you support a Government action that helps you personally, but which an institution of influence (e.g. the NYT) asserts will harm a group to which you might belong?
The most helpful word in Benson's tweet is "virtually."
"Virtualy" warns readers that Benson's statement is not fully truthful.
Most readers should recognize, even absent the "virtually" qualifier, that "every" does not equate to "70%!."
Many readers will note the implied but wrong equivalence of "taxpayer" and tax "filer."
There is the problematic word "single." Is this a superfluous modifier to "every" or does it refer to married taxpayers who file "single" vs. "joint" returns?
Althouse is wise to have run the numbers for her anticipated financial situation. She found the proposed tax law revision would help her financially. Not surprising.
I expect most tax filers without a home mortgage will benefit. That would include renters and those (mostly older folks) with paid-off mortgages.
Doubling the standard deduction as a trade-off for eliminating many itemizeable deductions is a good move. The time cost for itemizing deductions will be vastly reduced.
Of course the proposed tax law revision does nothing to aleviate:
..the fiscal problem of government payments greatly exceeding income;
..the moral political problem of too few citizens paying income tax.
@mockturtle, by "gentrify" do you mean "vote for the same sort of politicians and same sort of policies that caused them to leave the states they came from"? Because I saw that happen in Fairfax County, Virginia, when people working in DC left high tax Maryland counties like Montgomery and Prince Georges to move into Virginia, only to turn Fairfax into a high tax locality on its own.
"Will there be a mass exodus from NY, CA, NJ to fly-over country?"
To the barricades!
Fortunately, I don't think most of them would be caught dead in Wisconsin.
Blogger David said...
You could tax the rich even more
How?
The tax rate on the rich is zero. (other than the avoidable death tax, property taxes and a few others)
In the US we tax income, not wealth or riches.
Jeff Bezos pays tax on $3-5mm in salary and other income. Increase it to 100% and you get $5mm. You don't get a penny of his $100,000,000,000 in riches.
You make the mistake of conflating income and wealth. Many wealthy people have relatively low incomes. Buffett used to earn less than $1mm/yr. Why take income and pay tax if you do not have to?
Many others, athletes and movie stars are often the opposite. High income but, because they spend it as fast as it comes in, little wealth.
Any discussion of taxes must not conflate wealth and income.
Not to pick on you David, 98% of people make the same confusion.
Maybe we should tax wealth. Maybe not. It would probably require a Constitutional Amendment. It is a separate discussion though.
John Henry
Big Mike, yes, that's a big part of it. I've seen it happen in WA and OR over the years and it could happen here in AZ. It would be better for all concerned if they were exiled overseas somewhere.
"Will there be a mass exodus from NY, CA, NJ to fly-over country?"
-- Hasn't that been slowly happening? I thought that was part of Texas's boom, was a bunch of people fleeing CA.
I shouldn't talk, though. When my husband retired we used Seattle dollars to buy a beautiful farm in NE WA which was considered extravagantly expensive by local standards but a real bargain to us. So I know how this works.
Oh, Oh. John Henry is pumping for a wealth tax again.
Tax consumption. People's millions aren't a benefit if they don't spend it.
Fortunately, I don't think most of them would be caught dead in Wisconsin.
Quite a few of them get caught dead in Florida, Arizona, and Nevada.
Whatever happened to that nice Matt Lauer boy that all the lefties loved? I was hoping he could explain this tax policy to us all.
Perhaps ARM knows.
"Will there be a mass exodus from NY, CA, NJ to fly-over country?"
Actually, it depends on whether the companies relocate to lower tax areas. The employees will surely be glad to follow. But very few will be up for commuting from AZ to downtown LA.
If the elimination of state and local income tax deductions goes through I see a lot of high net worth and high income individuals re-domiciling (the six months and one day arrangement) themselves in states like Texas and Florida with no personal income taxes.
Economically ignorant people think that cutting the corporate tax rate is a giveaway to rich people. When in fact, cutting the corporate tax rate means that businesses can charge less money for their goods and services while still making a profit, and sees a bigger return on investments like building and hiring people.
In other words: cutting the corporate tax rate creates jobs, improves the value of your 401k, and lowers the price of everything you buy.
ARM said
"I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will add to the deficit. I recall that this was an issue that concerned them at one point in the past."
The tax rate is not the issue, it is the total dollars brought in by the government. When the economy grows as a result, the lower rate can bring in more money. For example, if we tax corporations at a lower rate that results in more corporations bringing activities back into this country, we get more money - a higher rate is of no benefit if the corporation is not in the country (i.e., 50% of zero is less than 5% of real money).
Big Mike, and several others that have enquired after me in various coments:
I have lived in PR since 1971, Maria is my 6th hurricane but the worst by far, bad as Hugo and Georges were.
Things are quite a mess, largly because of the incompetence of our govt owned power company for the past 30 years or more.
We are gradually getting back to normal.
President Trump has been immensely helpful, contrary to some popular reports. We've gotten billion$ in federal aid, 10,000 troops and more.
We are grateful to you and the other US taxpayers footing this bill.
How much of the bill the taxpayer should foot is an interesting question and perhaps deserves mention here.
Persons born in PR are natural born US citizens with just like someone born in Wisconsin.
So one argument is that we are entitled to all possible aid because we are US citizens.
OTOH, we pay no federal income tax (we do pay almost all other federal taxes) so the counterargument is that, if we don't pay taxes, we should get no funds from the public purse.
I think the answer is somewhere between the two.
John Henry
"Quite a few of them get caught dead in Florida, Arizona, and Nevada."
That's far enough away.
It's great to see you turn your attention to the tax bill. I've been surprised that you paid virtually no attention to it.
It's striking, though, that you start with a right wing Fox commentator's tweet, rather than with actual New York Times study that he highly selectively cites (though it's readily available) and then move to a single anecdotal analysis--your household. Your position seems to be: hey this tweet (from a biased source) suggests everyone will be fine and I'm fine, so nothing to see here.
As the actual NYT study (link here https://www.nytimes.com/interactive/2017/11/28/upshot/what-the-tax-bill-would-look-like-for-25000-middle-class-families.html?_r=0) shows the tax bill (a) causes higher taxes for a lot of middle class people who itemize deductions and/or pay high state and local taxes and or don't have children at home and/or and (b) that many, many middle class taxpayers will pay more by 2027 unless optimistic assumptions about the growth effects of tax cuts for the wealthy (trickle down) prove correct. If those assumptions prove incorrect, almost all the middle class pays more. In addition, the middle class tax cuts, unlike the corporate tax cuts, sunset in 2027.
It's true that the bill doesn't lower income taxes for the poor because they don't pay them. But there are a lot of analyses out there that suggest that lower income people will be made worse off by, among other things, the proposed repeal of the individual mandate.
So the bottom line is that many middle class and low income citizens are hurt by this bill and that over time continuing benefits for those who do receive an initial tax cut depend heavily on trickle down.
In contrast, the benefits for high income tax payers, like our President, are huge (even though he continues, it appears falsely, to claim that he will pay more under the bill). And they are permanent.
Beyond that, all the middle of the road folks who have looked at the bill are deeply concerned about its effect on the deficit and ultimately on federal spending that primarily benefits the poor and middle class, including Social Security, Medicare, basic research, etc. etc.
Bottom line: a guaranteed big tax cut for the rich, paid for by many middle class and low income taxpayers and with borrowed money. A tax cut for many middle class people (mostly in red states) whose durability is wholly contingent on optimistic growth and not permanent in any event. And a fiscal strategy that is irresponsible and ultimately threatens middle class and working class interests.
And that's without any consideration of the haste with which the bill is being put forward or the Republican leaderships effort to avoid any neutral or systematic analysis of its effects.
Now you don't have to address the tax bill at all, although its hard to claim to be a thoughtful commentator on politics without doing so. But addressing it in the way you have is shallow and misleading (or perhaps simply misled) to put it mildly.
John you want to tax capital gains at ordinary income rates? If you do, then how do you tax Bezos at the higher rate when he sells capital for income and tax you a lower rate when you take a gain on a stock trade?
Glad you're safe, John Henry. How long were you without power?
the 1.7 billion dollar hole
Nearly six dollars for every man, woman and child in America. Is Sally Struthers available? We could have a little ad campaign - "For the price of a cup of coffee, you could make the CBO projections of the revenue effect of the Republican tax cut plan revenue-neutral."
Original Mike,
I am NOT pumping for a wealth tax. It has some merits and some demerits and I am not certain whether or not it is a good thing overall.
What I AM pumping for is clarity and not talking about "Taxing the rich" when we really mean "Taxing high income earners".
My comment was about clarity of language, not the desirability of a wealth tax.
In any event, it is highl1y unlikely to happen. Two reasons: Needs an Amendment and the people who fund politicians are the ones who would be most affected.
John Henry
"shows the tax bill (a) causes higher taxes for a lot of middle class people who itemize deductions and/or pay high state and local taxes and or don't have children at home and/or and (b) that many, many middle class taxpayers will pay more by 2027 unless optimistic assumptions about the growth effects of tax cuts for the wealthy (trickle down) prove correct."
-- The chart actually shows more green than red dots, and part of the assumption is that, by 2027, the tax cuts do not get renewed. Which would mean that we would have an a-typical action by Congress and the American government in not doing so.
So... both these points are inherently flawed, either from looking at the NYT's data (which we can't recreate; I only have very basic information by mousing over the dots and can't see HOW they got the taxes they list) and that makes ridiculous assumptions that ignore reality.
The tax bill may be good or bad (seeing as it isn't finalized, it is hard to say). But the NYT's analysis is flawed and the study is non-repeatable. It isn't science.
"And that's without any consideration of the haste with which the bill is being put forward or the Republican leaderships effort to avoid any neutral or systematic analysis of its effects."
-- This bill is not being put forward hastily. Maybe if we were looking at it 10, 15 years ago, we'd say it was. But given how legislation moves in the recent past, we've been given lots of time to look it over. Hell, they even let the other side see it before passing it! You don't need to pass it to see what is in it.
Since most people do take the standard deduction in the "middle class", it is pretty obvious that they will be large net beneficiaries of the bill. The people who itemize will benefit as long as their deductions are lower than their new standard deduction, but lose if the new standard deduction is less than what they were deducting prior.
I have seen the analysis that adds back into that graph those who itemize, and the numbers are overwhelmingly in favor of those who benefit- it isn't even a close call- you can see it visually.
The New York Times can't come right out and tell you that the people who will pay more largely live in states with high property and income taxes, and even those are largely higher income people (well above median income) who come in just below the AMT deduction cut offs.
As for the CBO and Obamacare mandate- the CBO got hoisted on their own petard since the Republicans took the CBOs deceitful numbers from the Obamacare repeal debate and used them in the tax cut debate where they now cut against the Democrats arguments. This how you get the Democrats making the utterly inane argument that not being forced to buy something is somehow a tax increase- what else could they do given the numbers?
Bottom line: a guaranteed big tax cut for the rich, paid for by many middle class and low income taxpayers and with borrowed money. A tax cut for many middle class people (mostly in red states) whose durability is wholly contingent on optimistic growth and not permanent in any event. And a fiscal strategy that is irresponsible and ultimately threatens middle class and working class interests."
Bottom line is this: as a high rate net taxpayer I don't owe you a living. Giving you money doesn't benefit me. People who write checks pay. People who get checks don't pay.
"And that's without any consideration of the haste with which the bill is being put forward or the Republican leaderships effort to avoid any neutral or systematic analysis of its effects."
-- ... Wait, you say above that there's been analysis that shows X, but that Republicans are avoiding analysis. Is it too much for there to at least be consistency *within the same post*?
"As the actual NYT study ... [shows] ... many, many middle class taxpayers will pay more by 2027 unless optimistic assumptions about the growth effects of tax cuts for the wealthy (trickle down) prove correct."
We'll all be paying more in taxes in 2027 whether this tax bill passes or not. You can take that to the bank.
A clear problem with the NYT's graph: When you mouse over the dots, it doesn't even tell you what state the sample family is from. Given that the point of the deduction is to make it so that high-tax localities can't essentially screw the federal government out of money, not knowing if all of the people on the left are from high-tax locations is... well, bad.
“Obama spent $826 billion on The American Recovery and Investment Act in a single year and never achieved greater than 2.6% annual growth. Policy 'experts' begin to claim 3% growth is permanently unobtainable... ”
Only probably Nancy Pelosi was dumb enough to believe that Porkulus spending would grow the economy. Her Keynesian multipliers became ever more fanciful as time went on. This was, of course, decades after Keynesian economics had been empirically debunked, except, maybe, for very short periods of time at the very depth of recessions. The rest of the time, govt spending is a drag on the economy, diverting resources from more productive uses. Which is a good part of the reason that the Obama Recession was the slowest recovery in our lifetimes - with much of that blame going to his “Stimulus” bill, which did more to enrich Dem party cronies and constituencies, than anything positive. Ok, maybe we can add Obama himself there to the clueless list - belatedly discovering that there was no such thing as “shovel ready” jobs anymore. Of course not - govt procurement is a horribly complex mess because of the extreme amounts of money to be skimmed by those cronies and constituencies.
Now you don't have to address the tax bill at all, although its hard to claim to be a thoughtful commentator on politics without doing so. But addressing it in the way you have is shallow and misleading (or perhaps simply misled) to put it mildly.
We'd all rather read about it on your blog. Oh wait.
"I am NOT pumping for a wealth tax. It has some merits and some demerits and I am not certain whether or not it is a good thing overall."
The incentives provided by a wealth tax are HORRIBLE. Don't consider the rare wealthy entrepreneur or sports star. Consider the much, much higher numbers of people who have saved their entire life and are now living off that savings in retirement.
I just scrolled down to the graph for 2027 ("In 2027 the picture is more uncertain, but many middle-class households would face a tax increase.")
You know how they get that giant stream of red? By completely ignoring the corporate tax rate cuts. The only way they get that horrendous graph where EVERYONE suffers is to... ignore a giant part of the bill.
This isn't science. It's propaganda.
Althouse,
You paid how much???
Here in a suburban town south of Seattle, we just paid a measly $5,400 on a property worth nearly $500,000, and $4,650 on another property we own with an assessed value of $335,000. (They are in different taxing districts; the depradations of Sound Transit, and the different school district levies passed, account for most of the difference in rates.)
And this is in WA where we have no state income tax, and though our sales tax rate is nearly double yours, the property-tax difference of $12000 would represent retail purchases of nearly a quarter million dollars if made up for via our higher sales tax, which seems to me to be high by at least one order of magnitude.
So what the heck are you getting for you're vastly higher tax dollars, that I am missing out on???
"Congress’s in-house tax analyst, the Joint Committee on Taxation, estimates that about 25 percent of the cuts to corporate taxes would go to workers in the form of higher incomes."
-- I thought that Congress was avoiding having it be analyzed. Yet... here we are.
"On the one hand, Republicans argue that Congress is unlikely to allow tax cuts to expire in 2026 as planned, so the middle class might do better than this analysis suggests. On the other, many liberal economists argue that the Joint Committee on Taxation is too generous in its assumptions about how much workers would benefit from the corporate tax cuts."
-- Why does the NYT answer Republican's perfectly reasonable point (the tax cuts won't expire), with a completely unrelated point that the growth may not be as big as expected? Even if the growth isn't as big as expected... that doesn't matter if the cuts are extended. Then, the middle class doesn't lose the cuts, which the analysis hinges on. You can't compare apples to oranges and have statistically sound data.
Mike,
2-1/2 months, so far. No idea when we will get power. I'll be pleasently surprised if we have it before January. Fortunately we have a generator. Hooray for Briggs & Stratton, a fine Wisconsin company. Started first pull after not being used at all for more than 15 years.
Schlepping gas and listening to the noise is a royal pain in the ass, though. And it hurts my income as I can't travel, leaving my wife alone with no power.
We were without water for a week.
And our govt cancelled the contract with Whitefish because, although they were flying in Antonovs (3 days after the storm) full of trucks,helocopters , poles, equipment and crews, although their rates are competitive, although they were the only one willing to start without a substantial upfront payment and although they are on schedule and budget.
There is politics involved in how the contract was issued. The governor decided to cancel it so as to avoid the "distraction" as he called it.
And somewhere between 50-100 crews with equipment begin leaving tomorrow.
it is a disgustipating state of affairs.
John Henry
Tommy Duncan said...
I know you post
So no actual argument on your part, just childish name calling?
The bill stinks and I agree with cutting the corporate tax rate. A) it should have been paid for and B) it should have been paid for by eliminating loopholes on the corporate side, not on the backs of middle class people.
"For singles, the middle class starts at about $20,000, although to make the charts more readable, we aren’t showing households earning less than $40,000. (We’re using what tax analysts call “expanded income,” which includes cash income but also noncash items such as employer contributions to health insurance and the employer share of payroll taxes.)"
-- Wait. Wait. Wait. They're talking about income... but included "expanded income" that inflates peoples taxable income with non-taxable things? That's LITERALLY bad data being put in.
Of course you're going to get people paying more income tax when you artificially increase the amount of income they have in your data set.
Disgustipating, indeed.
Pookie Number 2 said...
That statement reflects an amazing level of economic ignorance
An amazing level of economic ignorance would be ignoring the fact that the bill blows an even bigger hole in the deficit. No politician nor serious commentator disagrees with this other than you. Hmmm.
@ Stephen
As the actual NYT study (link here https://www.nytimes.com/interactive/2017/11/28/upshot/what-the-tax-bill-would-look-like-for-25000-middle-class-families.html?_r=0) shows the tax bill (a) causes higher taxes for a lot of middle class people who itemize deductions and/or pay high state and local taxes and or don't have children at home and/or and (b) that many, many middle class taxpayers will pay more by 2027 unless optimistic assumptions about the growth effects of tax cuts for the wealthy (trickle down) prove correct. If those assumptions prove incorrect, almost all the middle class pays more. In addition, the middle class tax cuts, unlike the corporate tax cuts, sunset in 2027.
DEFINE middle class. Be exact. Who is middle class. What IS middle class. Where are you supposing these "middle class" people live? And no, I am not going to click a link to the NYT.
Are we talking 'middle class' blue collar workers in Arkansas who can live well on $40 ti $50KK or are we talking 'middle class' unionized longshore workers making 200K in NY City?
This broad brush generalization and vagueness in terms, drives me crazy.
Stephen said..."In contrast, the benefits for high income tax payers, like our President, are huge (even though he continues, it appears falsely, to claim that he will pay more under the bill). And they are permanent."
You've made this claim and so has ARM. I'd like to see it backed up.
Ms. Althouse's example, though, is quite telling- $17,000 in property taxes is enormous- it is almost twice what I would have paid last year in Newtown, CT if I still lived there last year. When I lived there and was still working, I only itemized because of the mortgage interest, but if I hadn't had that expense, the new standard deduction would have been beneficial to me under the new plan, too, and I was high income (top 10%) at that time.
The New York Times and its pundits are taking advantage of something I have noticed about my own mother. I do my retired parents' taxes every year, and every year I have the same argument with mother when I tell her that I don't need her receipts for itemization purposes because their standard deduction today is already significantly higher than all their local taxes and deductible expenses. It literally makes her mad that I don't itemize, even if I patiently explain to her that she gets more money back that way. It baffles me, but I suspect that she is far from unique this way.
Will there be a mass exodus from NY, CA, NJ to fly-over country? Will these migrants gentrify the heartland?
I read possibly South Florida.
$17k/yr in property tax?
I thought Illinois was bad.
That's insane and I pay less and I have a bigger yard than you do.
You should move to Indiana.
Could we please stop talking about how high property taxes are in Madison? I prefer to ignore the issue and this isn't helping.
For those wondering how they define middle class: "The tax analysis is confined exclusively to middle-class households, defined as households that earn two-thirds to two times household-size adjusted median income. That’s roughly $40,000 to $125,000 for a family of four, or about $30,000 to $90,000 for a couple. For singles, the middle class starts at about $20,000, although to make the charts more readable, we aren’t showing households earning less than $40,000."
So, where do we go to find out how the changes impact people earning less than $40,000? Is it as skewed as this, pretty much a net gain, but with some who get hurt? Is it more skewed left or right? Why didn't they post that data?
$17,000, annually? Wow. That's a lot of government services.
From the look of things, the Republicans have found a way to tax the rich, bring in more money, and not have to raise taxes. I'm surprised the Republicans aren't selling this that way, but they are the stupid party. I'm interested to know how the Democrats are going to get away with the class warfare rhetoric when people get their tax bill. I'm guessing they'll be out there hunting for the middle class people who got shafted.
ARM: "An amazing level of economic ignorance would be ignoring the fact that the bill blows an even bigger hole in the deficit"
LOL
ARM is so adorable pretending to care about deficits...and sexual harassment...and child molestation...
It's so very very pathetic.
But then I don't blame ARM so much as I recognize the hilarious difficult position the lefty partisans find themselves in at this moment in time.
The Ingas and ARM's and LLR Chuck's of the world simply don't have any other cards to play.
Big Mike says: Actually, it depends on whether the companies relocate to lower tax areas. The employees will surely be glad to follow. But very few will be up for commuting from AZ to downtown LA.
They won't have to. The mountain will come to Mahomet.
Bill Gates to Build Smart City in AZ Desert
"$17,000, annually? Wow. That's a lot of government services."
Ouch.
Big win for me. But then I was proactive and moved from Chicago to Tennessee, thereby reducing my income tax deduction by 100% and my property tax deduction by 80%. With retirement on the horizon and the complete phase out of the Hall tax (on interest and dividends) by 2021, it's win win win.
I too itemize and live in a high tax state (Illinois) and would also see lower taxes, about $2,500 or so based on the House version, but I only pay about $3500 in real estate tax.
If you manage to get a tax cut with a $17k RE tax bill you must have a very small mortgage. My debt is around $200k and the 2016 interest was just under $10k, so RE tax and interest alone exceeds the new $24k deduction, and that doesn't take into account the loss of the $8100 standard deduction for you and your spouse.
No politician nor serious commentator disagrees with this other than you. Hmmm.
I know that your political philosophy requires you to lie to yourself and others, but in this thread alone I've twice acknowledged the higher deficit. I appreciate your implicit acknowledgement of the incompatibility of your feeble arguments and the truth.
". . .the NYT is looking at all the people who just don't owe much income tax. Once you've got your taxable income down to nothing, it doesn't matter how much more you could have deducted. So those people get nothing out of the bigger standard deduction."
Tax rules are tax rules until you look to the exceptions. Limitations disallowing refunds in excess of taxes already paid in, has always been a part of U.S, Tax Code until the Reagan tax bill of 1986. The so-called Earned Income Tax Credit changed that - likely forever.
For 2017, the maximum Earned Income Tax Credit per taxpayer is: $510 with no Qualifying Children. $3,400 with one Qualifying Child. ... $6,318 with three or more Qualifying Children.
Single taxpayers qualify making $15,010 with zero dependents and $48,340 with 3 or children and joint returns begin at $20,600 and go up to $53,930.
So can we really conclude that the NYT reporters could understand any of this?
Yeah, the Media will get right on that, Professor--they really care about FACTS after all.
Geez.
Mike Pence said more Americans are working now than at any other time. That's undeniably true and completely expected--there are more Americans alive now than ever before! But the fact checkers gave his 100% true statement 3 Pinnochios.
See, cause they care about facts.
Yeah.
It's not just a matter of where we are on the Laffer curve. You also have to assess how much a given tax distorts economic activity, and encourages capital to flow to non-productive or sub-optimal investments.
You also have to count the diversion of the labor force... When the DMV hires more staff, they aren't engaged in anything productive and generate no wealth of any kind. But every soul drawing a DMV clerk's paycheck has been removed from the pool of labor in the private sector that can be employed to generate wealth. And this has a cost, too. A very big one.
The overall imperative must be to maintain the smallest government possible while still executing the basic constitutional functions of government: At the federal level, that's defense/national security, regulation of interstate commerce, federal law enforcement (of relatively few high-priority laws - low priority laws should be repealed), international relations/diplomacy, a functioning judiciary, revenue collection and federal transportation infrastructure.
I'm ok with the National Park system but if petty tyrants like Obama and his public employee union minions try that shit about fencing off the WWII veterans memorial and coning off access points to view Mount Rushmore again to spite the public over a budget deal then I say we mass fire every federal park service employee to a man, revoke their pensions as traitors to the public interest and transfer park responsibilities to the states.
I am probably crazy but I actually don't mind paying a smidge more in taxes if the stock market continues at even half its current surge, and if it means more jobs created, wages increased and hence more people paying taxes altogether. Both of these factors benefit my family and me far greater than a slight tax increase. This is a complicated eco-system.
Until the details are worked out, I am withholding judgment, however.
"I am probably crazy but I actually don't mind paying a smidge more in taxes..."
-- Most Republicans I know would not mind paying more in taxes *if we got value for it.* The country, however, rarely gets value for the dollars spent. People are willing to pay more for nicer things. Republicans have accepted, however, that the government may not give them what it promises, and therefore, has decided that lowering the rate of increase is a better solution than unmitigated expansion, which means we might, sometimes, not try and take as much money from people.
The average tax cut for 2018 is about $200 per capita, so if Althouse and Meade get $1,000, other people are getting less. Althouse wants to say it's people who don't pay income tax, but those people do pay other federal taxes, like FICA taxes, gas tax, etc.
The psychology of taxes is interesting. Althouse is paying a 2% annual real estate tax, which is 100% over a 50 year period. That's the wealth tax that people whose only assets is their home pay. But ask a Trump to pay 40% on his wealth, and only when he and his dies? That's confiscation.
The NYT editorial (is this the one being referenced?) makes an entirely different point about the effects of constraining spending. I'm sure Althouse and a lot of the commenters here like the possibility of reduced spending even better than a $1,000 tax cut. Underlying that is a political calculation that the reduced spending won't hit their retirement and health care. But a retired upper middle class couple could easily get passed on an extra $1,000 a year in health care expenses.
Instead, our representatives will probably just borrow the money to sustain most of the spending. A lot of the commenters here will make money lending to the government at the higher interest that implies. Think about that. It's a much better a deal to lend money to the government than to pay taxes.
My wife and I supported Scott Walker's Act 10 even though it personally costs us thousands. It was the right thing to do.
The key is to restore the fruit of people's labor, but also to restore organic markets for price controls that will mitigate asset inflation (e.g. housing mandates), service costs (e.g. Obamacare), and remove "born alive" penalties (e.g. Obamacare mandate), that are progressive burdens for the lower and middle classes.
Hammond said
Of course the proposed tax law revision does nothing to aleviate:
..the fiscal problem of government payments greatly exceeding income;
..the moral political problem of too few citizens paying income tax.
Bingo X 50!
This is just nibbling around the edges and another effort to buy votes. Thats all DC knows now.
Original Mike said...
I'd like to see it backed up.
Read a newspaper.
OTOH, we pay no federal income tax (we do pay almost all other federal taxes) so the counterargument is that, if we don't pay taxes, we should get no funds from the public purse.
OTOH, last time I checked Puerto Ricans are human beings, so if you need help those of us who are also human beings but with more luck should help. Maybe someday if a hurricane comes through the Shenandoah Valley you can send some help to me.
What I read is the top rates aren't coming down and SALT deductions are being eliminated.
I'm hopeful that 17k includes more than just one property. Yes our taxes are high, but I am looking at lake property in SE WI,nice frontage on Okauchee. House is listed at 825. PT are 6500/ year.
Pookie Number 2 said...
in this thread alone I've twice acknowledged the higher deficit
Not really. But now you have. I am glad to see you acknowledging that the Republicans are recklessly reducing revenue at a time of large deficits without any practical plan to reduce expenditure? The useless cocksuckers are also increasing taxes on a significant fraction of the middle class while giving larger tax cuts to the very rich. Maybe you could acknowledge this as well and you would then in agreement with the current GOPe leadership.
Tom Coburn understands the issues
Wisconsin voted to become state #28.
From long experience the CBO is remarkably bad a forecasting tax revenues.
I was doing a bit of a performance track of CBO forecast accuracy back in 2000-2009 or so. The problem was that the CBO did not use any sort of forecast model for things like Capital Gains. This can be an enormous amount.
The CBO has erred massively in both directions.
And of course tax law has a great effect. A reduction in Capital Gains will prompt sales, recognizing taxable income, an increase the opposite (though the game is complex, good luck with models).
I suspect that next years revenues will take a large "unexpected" jump based on increase in equities. We should be seeing a bump in tax collections about now actually.
ARM - I enjoy your mindlessly hypocritical flailing as much as anyone, but your intentional ignorance on all economic matters and your indifference to the general welfare makes it pointless to converse with you.
You lack the integrity try to understand why people do much wiser than you have different opinions about what's good for the country, and your life is apparently so empty that you derive some peurile joy from making ignorant assertions about concepts you'll never understand. I don't want to deprive you of that pathetic happiness, so please continue to knock yourself out, but I'm bowing out.
Dole and Newt observed the truism that conservatives are the tax collectors for the liberals. And darn good at it. Conservatives they are businessmen first and socialists second. Where these labels are mindsets not where they sit politically. People that are realists that reason from their pocketbook and not something can't be measured like “reasoning from ” the heart, who either want to do good, or avoid hard decisions. Either for appearance’s sake or for real. Those darn founders made it this way on purpose. One side in alternating tension with the other makes for an “anti-fragile system.” I wish I’d been a roach in that smoke-filled room, how politically incorrect, smoking, something available to the commoner to increase their enjoyment of life to near that of the elites, as they discussed what we’d eventually call “black swans” and how to keep them from destroying the country, knowing there’d be one sort of political behavior in the good times and another in the bad. They wanted a system that regularly re balanced, and became stronger as it did so. The magic of today is one of our best historian presidents knows that the country is now ready for, is rich enough, to start this cycle of rebirth. As each previous generation of government has undergone as the technology, education, wealth, quality of life enables the move to the next level. The elites clinging to power taking credit as justification for electing them again, before nature takes its course and the next cycle begins. The hinge in this cycle is the reduction in the SLT deduction, which has enabled the elites to dictate their local priorities and beliefs to the country while denying the majority a vote in the matter, a very socialistic model. In the next cycle we’ll see he opposite, the corporatists dictating their priorities to the county without what will be called a fair vote. Sacrifice economic growth on the altar of regulation? Not a chance in either case. which will be true for a while. Which is why T is grinning from ear to ear like a card player who knows his opponent just drew into a busted flush because he has a perfect memory and is a historian of the first order, as are were our most trans-formative leaders. Now that this cycle is upon us, they intend to use it for their own good which is a win-win because most often the people can draft in behind them. Helping us and even the elites of all types clear the chasm without falling into the hole of revolution, which in the past has led to suffering if not death, especially of the elites. The founders really did learn from the French revolution. Better a little suffering now than a lot later. Without which we’ll suffer heat death and be no better than rats in a cage, waiting for the next food pellet to drop. Fasten your seat-belts, it’s going to be a wild ride, what a great time to be alive. Be nice to live to live long enough to see the next peak. Which is the greatness seen only after we climb out of the previous cycle's hole. Which could also be defined as greatness in redistribution, which is a sharper knife to cut the pie rather than growing the economy enough in all dimensions to create a larger pie so the slices can be more generous. So, redistribution cycles as well, resetting to near zero when able, and 100% when there’s no choice but for us to face certain death of us all if we don't, forcing us to muster all our resources to survive. Have a good day.
Pookie Number 2 said...
I'm bowing out.
Vale, Pookie.
" I don't want to deprive you of that pathetic happiness, so please continue to knock yourself out, but I'm bowing out."
"The only winning move is not to play."
"... I am looking at lake property in SE WI,nice frontage on Okauchee. House is listed at 825. PT are 6500/ year."
You might want to double check that number. Wisconsin property tax rates run around 1.8% plus local additions.
How do you cut the income tax for someone who pays none?
You increase the refundable credits and pay them more...
Blogger 320Busdriver said..."Wisconsin voted to become state #28."
Thanks for pointing that out, I had missed it.
Interesting (though of no surprise) which states are on board and which are not.
Blogger Big Mike said...
OTOH, last time I checked Puerto Ricans are human beings, so if you need help those of us who are also human beings but with more luck should help.
Yes, of course and the US does provide a lot of help to all sorts of countries that suffer disasters. Haiti after the earthquake, for example.
So on that level the US should probably help.
I was thinking more on the lines of how much help we should get compared to, say, Florida had they suffered something comparable.
Should we receive Florida (state) level federal aid? Or Haiti (international level) aid?
John Henry
Blogger AReasonableMan said...
giving larger tax cuts to the very rich.
There you go again.
Since the rich do not pay taxes, how do they get tax cuts?
Perhaps you mean "High income earners" who do pay taxes.
Not the same as "The rich"
The high income earners, top 20%, already pay something like 90% of all income taxes. Does that seem fair to you?
John Henry
It is gratifying that today we are debating the merits of lowering US tax rates to levels comparable with modern economies in the rest of the world instead of considering how much more we can do to punish companies wishing to flee the United States.
@RABEL
I did check it. Its 6300 not 6500.. all depends on your zip code
https://www.shorewest.com/homes/1550992_METRO-N64W33791_Lakeview_Dr-Merton-WI-53066-1918#.WiBYQf9MHxA
John said...
Does that seem fair to you?
The rich have captured almost all the benefits from productivity gains over the last thirty years. Does that seem fair to you? They don't need a tax break, particularly at the expense of the middle class.
@Original Mike
Thanks for that map. The convention of states website has a map that is sorely out of date.
"The rich have captured almost all the benefits from productivity gains over the last thirty years."
True; that is because the US economy has turned away from making things to manipulating government policy. And has inflated the value of assets vs adding productive capacity. Landowners and owners of equity have seen the market value of what they hold inflate.
You can see it in Silicon Valley, where you no longer have the old startup culture. Talent is sucked into giant corporations that are lousy at deploying innovation, and live mainly off their market position and intellectual property.
The massive expansion of regulation has been having its effect.
"It is gratifying that today we are debating the merits of lowering US tax rates to levels comparable with modern economies in the rest of the world instead of considering how much more we can do to punish companies wishing to flee the United States."
Obama and his fellow ideologues went through contortions trying (and failing) to keep companies from fleeing, rather than address the root cause.
"The rich have captured almost all the benefits from productivity gains over the last thirty years.'
In a small way, as a small property owner and owner of equity, I have benefited from this a great deal since the 1980's.
ARM,
The rich or the high earners?
No matter, who is responsible for the greatly increased productivity over the years?
Are workers actually that much smarter, stronger, more capable?
Haven't most of the gains come from improved machinery, techniques, tools and the like?
Who is responsible for those?
Should the people responsible for the improved productivity be the one to reap the benefits?
John Henry
By eliminating the state income tax deduction you force people to start scrutinizing their state a bit more. The fact that supposedly reasonably intelligent CPAs advocate taking on a mortgage because it’s tax deductable, and people are willing to give away gobs of cash to banks because they won’t be taxed on it demonstrates poor math capability, and that they like free stuff regardless of its worth.
320,
The county has fair market value on the property assessed at $535,800. The $6,130 tax is 1.2% of that so it is definitely lower than most of Wisconsin. I don't know if a sale at $825,000 will generate a new FMV but I suspect that it will. If it does the property tax will run around $9,800. So, it depends on the county's FMV assessment and the zip code.
It may be that the current owner has a buddy in the tax assessor's office. Good luck. It looks like a hellofa nice home.
This tax plan will also increase the number of people who pay no taxes (at the low end). Democrats don’t like that because it reduces the ‘its not fair’ argument effectiveness. Thats why the dems have switched to being champions (sic) of the ‘middle class’ (deliberately abstractly defined) as emotional leverage.
Since the dems are also railing about the deficit, now. Once the tax bill passes, the republicans can say ‘we were for addressing the deficit Then, you are for it, Now, so we are on the same page - let’s take care of spending together’.
"Thanks for that map. The convention of states website has a map that is sorely out of date."
We need 6. One might guess we'd get MT, ID, KY, SC but after that it's blue states, who would only vote for a balanced budget over their own dead bodies.
@Rabel, yes I realize it would go up, all depends on the mill rate, but Merton is one of the cheaper locales around these lakes. Its less than I pay now for my home nowhere near the lake. There are many homes for much less but with 10k in taxes. Much of it also depends on the frontage. At 50' this home has a small frontage but if it fits the pier and lift thats all you need. I rent pier space from a friend on the lake already. Its a great lake with lots of interesting features, it would really mess up my savings rate to upgrade though.
For those here so inclined: given the poor quality of MSM analysis, I'll post here a rational summary of Bitcoin and Bubbles
Unfortunately the so called Elite Class including the Media, Democrats, Big Government, and Life Long Republicans saw the Tea Party, a true grass roots movement, as a threat, and branded them as Racist, White Supremacists, etc, while using the power of the IRS and other government agencies against them to destroy them as a political force, and political fund raising to destroy their electoral prospects.
The result was you got Trump, who is not as big on deficits. But, he fights fire with fire and the Elites are taking it on the chin. And the growth of the Alt Right, that is not as nice, but more like the Left.
AReasonableMan said...
>I would like to hear from the Tea Party on the 1.7 billion dollar hole that this will
>add to the deficit. I recall that this was an issue that concerned them at one point
> in the past.
The discussions here of Puerto Rico made me get off my but and do something I have been meaning to do for a while. I started a blog about the Puerto Rico power situation.
It is at darkislandpr.blogspot.com
We have a real lack of info on what is going on. I will publish what I know and hope I can get others to contribute other info so it can be a clearing house.
The news media is pretty well useless.
John Henry
I did not realize that the alternative minimum tax is to be eliminated. That makes a huge difference to many people.
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