The Truth about Tax Reform

[KeithE]

[Jim]

Tax reform, regardless of what's done or the ballyhoo accompanying it (especially by Congresspersons with their precious vested interests) is actually a non-issue and will be until the USA approaches the economic fiasco of a Venezuela. Obama took the road of least resistance—just print money and run up the national debt in 8 years over that of the complete history of the nation. This is still the methodology and the USA can get away with it for a long time yet. The national debt means nothing and the average citizen knows it, will be glad to accept a tax-reduction and look at the Reagan reformation as a baseline. After WWII, the top rates (on the alleged rich) stayed in the 90%+ range until 1964. The lowest rates were at 20% or less. When Reagan left office in 1989, the top rate was 28% and the lowest was 15%. The nation didn't fold despite all the shenanigans Congress could impose. Just stay tuned as the solons spin their webs that are not worth warm spit.

[KeithE]

[KeithE]

[Dave Roberts]

From what I can read so far of the GOP plan, it seems more of the same--give benefits to the rich so all yachts float higher, refuse a lifeline to the poor, keep the social security cap so the rich benefit, and run the deficits higher as they did in the Bush-43 era. When will they realize that trickle down economics does not work for the country?

[Sandy]

[KeithE]

[KeithE]

[KeithE]

[KeithE]

[William Thornton]

Any particular reason you avoid using dollars for national debt comparisons and prefer percentages?

[Jon Estes]

[KeithE]

[William Thornton]

This, brethren, is Keith's finest hour on BL.

Thanks

[KeithE]

[KeithE]

[William Thornton]

Well, if Common Dreams said it, reported it, graphed it, or intuited it...that should end the discussion.

I'm hopeful that republicans pass something in spite of the doomsayers and doomsdayers. Can't say I'm all that optimistic.

[KeithE]

[William Thornton]

I was commenting on the CD quote. You almost always use CD, yawn, and I offer no analysis. You wonks talk to each other, always partisan, and it doesn't matter. Considerable numbers of the citizenry, I surmise, just want something done rather than the same nonsense.

Let 'er rip, I say. Let's see where it goes.

[Sandy]

If you can find some factual information that points to anything Keith said here, or that Common Dreams said, that is wrong, let's see it. Otherwise, I'd suggest an early bedtime. It might help your yawning problem.

Considerable numbers of the citizenry are, I surmise, becoming increasingly alarmed at the difference between what they want done, and what Trump is doing. What he promised was a health care plan that lowered premiums and increased coverage. And what he has promised with tax reform is that the middle class will benefit, and that what he signs won't benefit him or the rich at their expense. Aside from his own supporters, most people seem to be able to figure out that what he says, and what is being done, are not the same thing. You can call that partisan if you want to. You'd be wrong.

[KeithE]

[Jim]

[JE Pettibone]

Ed: Jim, the Government just printing more money is already a serious problem.

[Sandy]

[KeithE]

I am encouraged by some aspects of the income tax plan as it was released today (as opposed to the earlier Trump tax “one page” plans released).

Surprising improvements:
- (a) The EITC was kept (lowering and/or eliminating taxes of the low class and much of the middle class earners)
- (b) The Top Rate was kept at 39.6% (although the threshold was increased from $467K (married) to $1M (married))
- (c) The next tax rate was moved from 33% to 35%
(b & c largely keep the taxes on the rich the same as they are now - no longer can I claim this is a big tax cut for the rich)
- (d) The tax break point (between the 12% and 25% tax rate) was moved up from $75,000 (married) to $90,000 (married) leading to lower taxes for much of the middle class (~$30K- $90K/year (married)) - but no where near anytime soon)
- (e) The 401K deduction was kept at $18,000/year instead of moving to $4000/year

But:
- The Estate tax exemption was moved up from ~$500K to $1M when there should not be any exemption if we want a truly level playing field.
( we lose so much possible revenue to heirs who have already been raised with a silver spoon in their mouth)
- The Alternative Minimum Tax was eliminated sure to allow clever rich people to avoid paying their fair share

Not sure about:
- The so-called pass through rate of 20% (?) which will enable those in the 39.6%, 35% and even the 25% brackets lower their taxes by declaring themselves as a limited liability corporation or consultant instead of just being an employee. Have not seen if this stays in place and that is my uncertainty.
(most people who make over ~$150K/year will be able to pay a slight fee to a lawyer and reduce their taxes - those lawyers who make this a business will get rich)
- Whether the business loopholes that have been promised to be eliminated will cover the loss of business tax revenue by reducing statutory rate from 35% to 20%. The share of federal tax revenues coming from corporate taxes have dropped substantially since 1945 (from 38% in 1945 to 10% in 2016 and now more reduction??).


Absolutely sure:
- Corporate profits will increase massively despite their profits soaring for the last 3 decades

-This will not substantially raise wages of the middle class even in the long term w/o some min wage increase or some other wage control regulations.
- Annual deficits will increase - income taxes going down, corporate taxes going down, Estate taxes going down, payroll/excise taxes stayingh the same. Trump Spending Plan ( is slightly greater than any Obama actual Spending (). Revenues down, spending about the same means annual deficits going up, unless demand for products go up as they did with the Obama stimulus. Infrastructure stimulus the best approach especially if the stimulus jobs go to the lower/middle class who who will demand more products when they have money causing corporations to use their stagnated profits to make those products as opposed to the grotesque enrichment of their CEOs.


I await further facts, but I am still opposed to this Act as it stands today.

One further fact is the pass through rate is 25% not 20%. So I still expect a rush of paid employees who make over $200K (single) or $260K (married) to declare themselves corporations or Limited Liability Companies to lower their tax rate from 35% (or 39.6%). This is a big tax break for the top 2% if they choose to take it and their employer agrees to cooperate. I smell some high paid Board of Directors (who typically work less than 100 hours a year) in exchange for their votes. Lawyers establishing these arrangements will be enriched as well.