The Truth about Tax Reform

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Re: The Truth about Tax Reform

Postby KeithE » Thu Nov 02, 2017 6:37 pm

429 page GOP tax plan:Tax Cut and Jobs Act

We will see about the “Jobs” claim in the Act’s title. Nothing specifically enhances jobs in this Act - all suppositions.

Quick Assessment from the Tax Policy Center
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Re: The Truth about Tax Reform

Postby Haruo » Fri Nov 03, 2017 12:36 am

Automation is such that overall, job creation is a fiction. Most job creation is makework, and there is nothing in unregulated capitalism to make the creation of jobs desirable where a machine can do as well or better for the cost of the electricity it consumes.
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Re: The Truth about Tax Reform

Postby KeithE » Fri Nov 03, 2017 8:43 am

Haruo wrote:Automation is such that overall, job creation is a fiction. Most job creation is makework, and there is nothing in unregulated capitalism to make the creation of jobs desirable where a machine can do as well or better for the cost of the electricity it consumes.


Partially true Haruo. Manufacturing will go down even overseas. Even computer programming will decline in the future.

But not all jobs are subject to automation. Infrastructure repair and new construction (bridges, roads, underground utilities/fiber optics, mass transit, ...) cannot be in toto built by machines. We also need, imo, many more accountability agents in both government and corporations and even elections; while that can be partially automated, there is that human investigative and decision making functions as well.

And “makework” is still employment and that helps the economy.
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Re: The Truth about Tax Reform

Postby Haruo » Fri Nov 03, 2017 5:44 pm

KeithE wrote:Infrastructure repair and new construction (bridges, roads, underground utilities/fiber optics, mass transit, ...) cannot be in toto built by machines. We also need, imo, many more accountability agents in both government and corporations and even elections; while that can be partially automated, there is that human investigative and decision making functions as well.

And “makework” is still employment and that helps the economy.

I didn't say "in toto", but the fact is that the number of human people needed in virtually every field of endeavor is shrinking and will shrink more drastically if the shareholders can figure out a way to do it and still sell products to someone or something. Full employment might require a one-day work week. Mind you, to be an improvement it has to provide one week's pay or more for one day's work, and that is unlikely to happen without a lot of labor movement activity that I don't see happening till it's too late (the people who should be agitating for it most urgently are instead voting for Trump under the notion that the guy who this morning was quoted as telling NPR, with reference to the large number of unfilled position in the State Department, that he is "the only one that matters,... So, we don't need all the people that they want. You know, don't forget, I'm a businessperson. I tell my people, 'Where you don't need to fill slots, don't fill them.' But we have some people that I'm not happy with their thinking process.")

However, I am not nearly as inclined as you are to think human accountability agents and other bureaucrats are a good thing in large numbers and a better thing in larger numbers. I think people by and large need a whole lot of training in the healthy and enjoyable utilization of free time, most of which training (but not all) can be provided by apps.
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Re: The Truth about Tax Reform

Postby Sandy » Fri Nov 03, 2017 9:23 pm

I got my tax return for 2016 out and tried to figure out how it would look with the percentage of tax that would be due if the new plan went into effect. Adding in the doubled standard deduction, subtracting what I get from deductions now, and the personal exemption, and plugging in the appropriate tax rate, I would pay just a shade more than I did this year. No tax cut for me. Where I lose out is in the deductions that will no longer be allowed, and the personal exemption. Anyone who itemizes is most likely going to have the same experience.
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Re: The Truth about Tax Reform

Postby KeithE » Fri Nov 03, 2017 10:35 pm

Haruo wrote:
KeithE wrote:Infrastructure repair and new construction (bridges, roads, underground utilities/fiber optics, mass transit, ...) cannot be in toto built by machines. We also need, imo, many more accountability agents in both government and corporations and even elections; while that can be partially automated, there is that human investigative and decision making functions as well.

And “makework” is still employment and that helps the economy.

I didn't say "in toto", but the fact is that the number of human people needed in virtually every field of endeavor is shrinking and will shrink more drastically if the shareholders can figure out a way to do it and still sell products to someone or something. Full employment might require a one-day work week. Mind you, to be an improvement it has to provide one week's pay or more for one day's work, and that is unlikely to happen without a lot of labor movement activity that I don't see happening till it's too late (the people who should be agitating for it most urgently are instead voting for Trump under the notion that the guy who this morning was quoted as telling NPR, with reference to the large number of unfilled position in the State Department, that he is "the only one that matters,... So, we don't need all the people that they want. You know, don't forget, I'm a businessperson. I tell my people, 'Where you don't need to fill slots, don't fill them.' But we have some people that I'm not happy with their thinking process."

However, I am not nearly as inclined as you are to think human accountability agents and other bureaucrats are a good thing in large numbers and a better thing in larger numbers. I think people by and large need a whole lot of training in the healthy and enjoyable utilization of free time, most of which training (but not all) can be provided by apps.


Misunderstanding alert - I used “in toto” to recognize that construction jobs can make use of some automation. I did not mean to say you meant all jobs could be automated.

You do predict more jobs lost to automation sooner than I do. And I doubt that productive work cannot be found (education, psychologists, more police, more accountability agents= there is a lot of graft going on in corporations and government, care taking for our aging populace, parenting helpers, .....) when we see people are out of work. Sure France is already at a 35-39 hour official work week. Full time workers in America currently have a 47 hour work week (34.4 hours if you include part the workers). One day a week is decades/centuries away I would guess - but predictions more than 5 years is hard.

BTW, this plot below in the link above bothers me a lot - the salary setting people have been not rewarding the real producers for decades.

Image

That pronounced breakpoint is at 1969.

But your pointing out Trump’s line in red is priceless. I’d add pure arrogance to the list of his impeachment charges.
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Re: The Truth about Tax Reform

Postby William Thornton » Sat Nov 04, 2017 8:31 am

As Pelosi is saying...get over it, he's in.

All this wonk stuff doesn't matter to the general public which likes or dislikes tax reform based on one or two pet exemptions. Most of us would like to see congress do something. Obama, BTW, was our most arrogant president. He was just smooth about it. His favorite word was "I".

But, thank God for the corrupt Clintons being deep sixed, hopefully forever. It's great to see that Dems are now saying that HIl was the only candidate who could lose to Trump. In looking back over about a half century of following politics, I'd have to say that watching Hil lose twice would make my top ten political events. Offhand here's my top ten:

1. Reagan elected.
2. Reagan re-elected.
3. Bush the First elected.
4. Bush the Second elected.
5. Bush the Second re-elected.
6. Jimmy Carter elected. (last Dem I voted for...with regrets today)
7. Hil losing to Obama in the primaries.
8. Hil losing to Trump.
9. Clinton losing his one election in Arkansas (I was living in Memphis at the time).
10. My coming in tied for second in a church election of who the grouchiest person was in our congregation.
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Re: The Truth about Tax Reform

Postby Haruo » Sat Nov 04, 2017 9:39 am

That's a pretty red-state sort of like list, William, though not more so than I anticipated. But it's a like list. I'd be interested in seeing your top ten political events/developments, including things other than election outcomes.
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Re: The Truth about Tax Reform

Postby William Thornton » Sat Nov 04, 2017 3:09 pm

Sandy, that's a foolish, thoughtless, racist comment. I deleted it. I don't care whose forum this is. Perhaps you would rethink your approach.

Actually, I liked the guy. I always appreciate a scintillating speaker even if he's a flaming lib dem.
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Re: The Truth about Tax Reform

Postby KeithE » Sat Nov 04, 2017 3:30 pm

William Thornton wrote:Sandy, that's a foolish, thoughtless, racist comment. I deleted it. I don't care whose forum this is. Perhaps you would rethink your approach.

Actually, I liked the guy. I always appreciate a scintillating speaker even if he's a flaming lib dem.


Actually Sandy’s post was not racist in itself. I can’t see it anymore, but as I remember it charged you with racism. But I’ll agree with you - your anti-Obama comments are not necessarily racist. Probably best that you deleted it.
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Re: The Truth about Tax Reform

Postby KeithE » Tue Nov 07, 2017 7:03 pm

Yesterday the Institute on Taxation and Economic Policy released its detailed study on the House GOP Tax Plan

Richest Americans Benefit Most from The Tax Cuts and Jobs Act

Image

The Top 1% will get a $48,850 tax break in 2018 (and grows to $64,720 by 2027) while the middle class (middle quintile 40-60%) gets $750 tax break in 2018 (and reduces to $460 by 2027).

Image

Clearly not a “Middle Class” tax cut.

Digging deeper (since the top brackets are staying the same, I was skeptical), I see that the large tax breaks at the top is said to be mostly due to:
(1) the large corporate tax cut (35% down to 20%) mainly benefits the rich owners/execs of large corporations to small companies through their company stocks and stock options they own. This is clearly estimated, could be larger or smaller - depends on markets; but smart stock owners switch to cash when the market goes down.
(2) the belief/assumption that some of those in those brackets (39.6% or 35%) will use the “pass through” provision to lower their personal income tax rate to 25%.

The House bill includes features that are apparently designed to make the plan appear less generous to the wealthy than previous versions of tax reform that have been discussed. For example, the top personal income tax rate today is 39.6 percent, and in a departure from previous proposals, this bill would retain that top rate for married couples with taxable income exceeding $1 million and singles with taxable income exceeding $500,000. Also, the benefits of the lowest income tax bracket (12 percent under the House bill) would be phased out for the very rich.

But these changes prove to be largely cosmetic because much of the benefits for the richest Americans come from other provisions in the bill. For example, the provision reducing the corporate tax rate from 35 percent to 20 percent would mostly benefit the owners of corporate stocks, which mostly include high-income Americans and foreign investors. Another example is the special top tax rate of 25 percent for some “pass-through” business income. Pass-through businesses have profits that are not subject to the corporate income tax but instead are reported on their owners’ tax returns and subject only to the personal income tax. While proponents of this special tax rate for pass-through businesses often call it a break for “small businesses,” most pass-through income goes to the richest one percent of Americans.


To those that would say “well the rich get the biggest breaks because they pay a larger share of the tax burden”. They will now get 31% of the tax breaks while getting 22% of the income.

Image

BTW, we really do not have much of a “progressive” tax if the share of the income of the 1% is 22% while their share of taxes paid (under current law) is only 26%. This is no doubt the work of the very rich to avoid taxes through loopholes. That 26% will probably drop to less than 22% (iow, be a “regressive” tax) with the end of the Alternative Minimum Tax (AMT) that is part of this Bill. This may be a third reason why the Top 1% get such a large tax break under the House Tax Plan (although this effect is not mentioned in the report).
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Re: The Truth about Tax Reform

Postby Haruo » Wed Nov 08, 2017 12:26 pm

KeithE wrote:[...]smart stock owners switch to cash when the market goes down.

I am not sure this is true. I think smart stock owners switch to cash when they see that the market is about to go down. If they wait till it goes down, they are out a chunk and if they jump ship at that point they end up with insufficient cash to buy in just before it goes up. Smart in this case is nearly synonymous with prescient.

One other thing. The poorer one is, the more likely it is that those government programs that currently provide one the greatest benefits cost more to replace than they were helping, so the effect is that a small but "real" reduction in taxes is meaningless if the tax cuts for those better off than oneself are funded by removing funding from the programs that most help the poor. If you pay $200 less taxes but pay $2000 more for services that were previously tax-funded or -subsidized, then in effect you've undergone a $1800 tax increase. Not all of the poor, especially in the Red States, understand this.
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Re: The Truth about Tax Reform

Postby Jim » Wed Nov 08, 2017 3:27 pm

Everything at this point is pure speculation. No one knows yet what kind of legislation will be passed, if any anytime soon. What is evident in this forum is that some consider financial success as virtually sinful and should be punished by confiscating the fruits of good management or good luck, inherited wealth or winning the lottery. This is the philosophy that the richest—by hook or crook—must totally fund the rest, including the so-called middle-class, with the mean family income between 50- and 60-thousand annually. On this basis, I am among the poor but do not feel that this entitles me to leech off those smarter than I or luckier. Counting both fed and other taxes, those in the infamous top 1% fork over close to half of what they make one way or another, while nearly half of all households pay no taxes at all. This seems unfair in spades, and I don't care about what other people pay or not pay. There never has been or will be a “fair tax” or “level playing field,” the former indefinable and the latter against Nature.
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Re: The Truth about Tax Reform

Postby Haruo » Wed Nov 08, 2017 4:24 pm

But given a fallen world, it may be our duty to our Savior to struggle against the laws of nature on behalf of the least of his brethren. Or not. The top 1% also receive benefits paid for by the taxes the whole population pays. And cutting funding for those benefits is not nearly as high a priority, from the budget-balancers' usual POV, as cutting the much cheaper benefits to the poor. IMO.
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Re: The Truth about Tax Reform

Postby KeithE » Wed Nov 08, 2017 6:02 pm

Jim wrote:Everything at this point is pure speculation. No one knows yet what kind of legislation will be passed, if any anytime soon. What is evident in this forum is that some consider financial success as virtually sinful and should be punished by confiscating the fruits of good management or good luck, inherited wealth or winning the lottery. This is the philosophy that the richest—by hook or crook—must totally fund the rest, including the so-called middle-class, with the mean family income between 50- and 60-thousand annually. On this basis, I am among the poor but do not feel that this entitles me to leech off those smarter than I or luckier. Counting both fed and other taxes, those in the infamous top 1% fork over close to half of what they make one way or another, while nearly half of all households pay no taxes at all. This seems unfair in spades, and I don't care about what other people pay or not pay. There never has been or will be a “fair tax” or “level playing field,” the former indefinable and the latter against Nature.


You exaggerate in your red sentence, Jim.

Look at Table 1 in https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/. It shows that the Top 1% paid 27.16% in income taxes in 2014. This is based an actual returns for the income taxes portion of total taxes. We should add the payroll taxes, state/local taxes, property taxes and other excise taxes (such as liquor/cigarette taxes). For payroll taxes, they paid Medicare taxes at 1.45% and at most 1.69% (believe me I calculated it) in SS taxes (since incomes above $127,200 are untaxed for SS). The average state + local taxes is 6.89% (for those that actually spend their whole income), and 1.15% property tax on average , and minuscule excise taxes. That is total of 38.5% at most (not 50%) for the Top 1%.

As for the Bottom 50%, it is true that the Earned Income Tax Credit has eliminated most income taxes for those that work. But many don’t work and they still payroll taxes (1.45 Medicare and 6.2% SS), 6.89% state and local taxes, and I’ll ignore the property taxes (most do not own property, but some do) and excise taxes. That is a total of at least 14.54% (not “no taxes at all”) for the Bottom 50%.

Jim, you have been fed some RW talking points. The overall tax rates are progressive but not as much as sometimes is portrayed.

And Jim I do not believe financial success is “sinful" or needs to be “punished". But I do feel that some level of progressively in taxes makes partly up for the greatest income inequality we have ever seen - larger than even 1928 (and remember wages are set by those on top).

Image
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Re: The Truth about Tax Reform

Postby Jim » Fri Nov 10, 2017 2:39 pm

KeithE wrote:
Jim wrote:Everything at this point is pure speculation. No one knows yet what kind of legislation will be passed, if any anytime soon. What is evident in this forum is that some consider financial success as virtually sinful and should be punished by confiscating the fruits of good management or good luck, inherited wealth or winning the lottery. This is the philosophy that the richest—by hook or crook—must totally fund the rest, including the so-called middle-class, with the mean family income between 50- and 60-thousand annually. On this basis, I am among the poor but do not feel that this entitles me to leech off those smarter than I or luckier. Counting both fed and other taxes, those in the infamous top 1% fork over close to half of what they make one way or another, while nearly half of all households pay no taxes at all. This seems unfair in spades, and I don't care about what other people pay or not pay. There never has been or will be a “fair tax” or “level playing field,” the former indefinable and the latter against Nature.


You exaggerate in your red sentence, Jim.

Look at Table 1 in https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/. It shows that the Top 1% paid 27.16% in income taxes in 2014. This is based an actual returns for the income taxes portion of total taxes. We should add the payroll taxes, state/local taxes, property taxes and other excise taxes (such as liquor/cigarette taxes). For payroll taxes, they paid Medicare taxes at 1.45% and at most 1.69% (believe me I calculated it) in SS taxes (since incomes above $127,200 are untaxed for SS). The average state + local taxes is 6.89% (for those that actually spend their whole income), and 1.15% property tax on average , and minuscule excise taxes. That is total of 38.5% at most (not 50%) for the Top 1%.

As for the Bottom 50%, it is true that the Earned Income Tax Credit has eliminated most income taxes for those that work. But many don’t work and they still payroll taxes (1.45 Medicare and 6.2% SS), 6.89% state and local taxes, and I’ll ignore the property taxes (most do not own property, but some do) and excise taxes. That is a total of at least 14.54% (not “no taxes at all”) for the Bottom 50%.

Jim, you have been fed some RW talking points. The overall tax rates are progressive but not as much as sometimes is portrayed.

And Jim I do not believe financial success is “sinful" or needs to be “punished". But I do feel that some level of progressively in taxes makes partly up for the greatest income inequality we have ever seen - larger than even 1928 (and remember wages are set by those on top).

Image

There are myriads of loop-holes connected to most every attempt at either regulation or fairness. Pointing out what folks pay for cigarette-taxes and how that works misses my point entirely, which is that I don't give a fig as to what Bill Gates earns...or you, and that folks should get to keep their honestly-earned income except for a “reasonable” payment to the government, not that reasonable can be defined collectively. The current emphasis on college education (not for everyone) as a given to induce financial success is just another way of telling the grad to work hard so he can fund the government more “reasonably” than someone who skips college. Everyone buys the same governmental services but only some have to pay far more for them than others. Dollar-wise, this is just data-stuff but percentage-wise it expresses unfairness. As for the loop-holes, they exist because legislators see their intrinsic value. Taxpayers all up and down the income-level caste-system take advantage of every loop-hole managed (mismanaged) by Congress. As for the federal debt, according to CNN (May 2016),"Who exactly owns the $19 trillion-plus of U.S. debt? There's been a lot of attention in recent years over China rising to become one of the largest holders of U.S. debt. China's share of the debt is sizable -- about 7% -- but it's hardly the largest holder of U.S. government bonds.
The top holder by far is U.S. citizens and American entities, such as state and local governments, pension funds, mutual funds, and the Federal Reserve. Together they own the vast majority -- 67.5% -- of the debt.” No foreign government will call in its dollars, especially if to do so would cause the U.S. to default, turning global finance systems into utter chaos, not to mention the military effect of the U.S. virtually daring any such foreign power to try to bankrupt this country. Neither balancing the budget nor substantially decreasing the national deficit will happen soon if ever. Is there a doomsday out there? Who knows? Until then, the U.S. continues its slide into socialism, already too established to be readily turned around. No matter what tax-reform does, it's still business as usual in D.C. According to CNBC (April 2015), “According to a projection from the non-partisan Tax Policy Center, the top 1 percent of Americans will pay 45.7 percent of the individual income taxes in 2014—up from 43 percent in 2013 and 40 percent in 2012 (the oldest period available).” Nothing much has changed since 2014, so it appears that the richest pay nearly half the freight for running the country. Is that fair enough?
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Re: The Truth about Tax Reform

Postby KeithE » Fri Nov 10, 2017 6:59 pm

Jim wrote:
KeithE wrote:
Jim wrote:Everything at this point is pure speculation. No one knows yet what kind of legislation will be passed, if any anytime soon. What is evident in this forum is that some consider financial success as virtually sinful and should be punished by confiscating the fruits of good management or good luck, inherited wealth or winning the lottery. This is the philosophy that the richest—by hook or crook—must totally fund the rest, including the so-called middle-class, with the mean family income between 50- and 60-thousand annually. On this basis, I am among the poor but do not feel that this entitles me to leech off those smarter than I or luckier. Counting both fed and other taxes, those in the infamous top 1% fork over close to half of what they make one way or another, while nearly half of all households pay no taxes at all. This seems unfair in spades, and I don't care about what other people pay or not pay. There never has been or will be a “fair tax” or “level playing field,” the former indefinable and the latter against Nature.


You exaggerate in your red sentence, Jim.

Look at Table 1 in https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/. It shows that the Top 1% paid 27.16% in income taxes in 2014. This is based an actual returns for the income taxes portion of total taxes. We should add the payroll taxes, state/local taxes, property taxes and other excise taxes (such as liquor/cigarette taxes). For payroll taxes, they paid Medicare taxes at 1.45% and at most 1.69% (believe me I calculated it) in SS taxes (since incomes above $127,200 are untaxed for SS). The average state + local taxes is 6.89% (for those that actually spend their whole income), and 1.15% property tax on average , and minuscule excise taxes. That is total of 38.5% at most (not 50%) for the Top 1%.

As for the Bottom 50%, it is true that the Earned Income Tax Credit has eliminated most income taxes for those that work. But many don’t work and they still payroll taxes (1.45 Medicare and 6.2% SS), 6.89% state and local taxes, and I’ll ignore the property taxes (most do not own property, but some do) and excise taxes. That is a total of at least 14.54% (not “no taxes at all”) for the Bottom 50%.

Jim, you have been fed some RW talking points. The overall tax rates are progressive but not as much as sometimes is portrayed.

And Jim I do not believe financial success is “sinful" or needs to be “punished". But I do feel that some level of progressively in taxes makes partly up for the greatest income inequality we have ever seen - larger than even 1928 (and remember wages are set by those on top).

Image

There are myriads of loop-holes connected to most every attempt at either regulation or fairness. Pointing out what folks pay for cigarette-taxes and how that works misses my point entirely, which is that I don't give a fig as to what Bill Gates earns...or you, and that folks should get to keep their honestly-earned income except for a “reasonable” payment to the government, not that reasonable can be defined collectively. The current emphasis on college education (not for everyone) as a given to induce financial success is just another way of telling the grad to work hard so he can fund the government more “reasonably” than someone who skips college. Everyone buys the same governmental services but only some have to pay far more for them than others. Dollar-wise, this is just data-stuff but percentage-wise it expresses unfairness. As for the loop-holes, they exist because legislators see their intrinsic value. Taxpayers all up and down the income-level caste-system take advantage of every loop-hole managed (mismanaged) by Congress. As for the federal debt, according to CNN (May 2016),"Who exactly owns the $19 trillion-plus of U.S. debt? There's been a lot of attention in recent years over China rising to become one of the largest holders of U.S. debt. China's share of the debt is sizable -- about 7% -- but it's hardly the largest holder of U.S. government bonds.
The top holder by far is U.S. citizens and American entities, such as state and local governments, pension funds, mutual funds, and the Federal Reserve. Together they own the vast majority -- 67.5% -- of the debt.” No foreign government will call in its dollars, especially if to do so would cause the U.S. to default, turning global finance systems into utter chaos, not to mention the military effect of the U.S. virtually daring any such foreign power to try to bankrupt this country. Neither balancing the budget nor substantially decreasing the national deficit will happen soon if ever. Is there a doomsday out there? Who knows? Until then, the U.S. continues its slide into socialism, already too established to be readily turned around. No matter what tax-reform does, it's still business as usual in D.C. According to CNBC (April 2015), “According to a projection from the non-partisan Tax Policy Center, the top 1 percent of Americans will pay 45.7 percent of the individual income taxes in 2014—up from 43 percent in 2013 and 40 percent in 2012 (the oldest period available).” Nothing much has changed since 2014, so it appears that the richest pay nearly half the freight for running the country. Is that fair enough?


Good point about who the National Debt is owed to. And you are correct that China holds about 7% (despite popular opinion). Here is the breakdown of who owns it.
Image
As Jim correctly said, most is owed to American people and entities, such as the SS Trust Account.
---------------
On another subject, Jim said (and I have no reason to doubt, but a reference would be helpful) that Tax Policy Center projected that the Top 1% would paid 45.7% of income taxes collected in 2014. The actual % of income taxes paid by the Top 1% in 2014 was 39.8% (look at Table 1 or Figure 1). As for prognostication that is not particularly good; perhaps caused by tax avoidance/evasion/fraud.

But realize JIm's claim was that the Top 1% pay half (50%) of their income in total taxes (federal, state, local) and the Bottom 50% pay no taxes.

Truth is that the Top 1% actual pays ~ 38.5% of their income in total taxes (not 50% {half}). See my detailed post above. In his reply he mentions that the Top 1% was projected to pay 45.7% of income taxes collected in 2014. But that is a different factor than the % of the Top 1% income that is paid in total taxes.

Likewise his claim that the Bottom Half pay no taxes at all (0%) is spurious. They pay at least 14.54% of their income in total taxes (federal, state, local). Again see my detailed post above.

Perhaps Jim is confusing the percent of people’s income that are paid in total taxes with the share of income taxes various classes of people contribute.

--------------------------

Because I’m am interested, here is a little diversion about the so-called “entitlement” programs - SS and Medicare.

Some of SS Trust Fund, which has been collected since Jan 1937, has been moved to the general fund ever since Reagan/Greenspan.. Some call this “looting”.

Ronald Reagan and Alan Greenspan pulled off one of the greatest frauds ever perpetrated against the American people in the history of this great nation, and the underlying scam is still alive and well, more than a quarter century later. It represents the very foundation upon which the economic malpractice that led the nation to the great economic collapse of 2008 was built. Ronald Reagan was a cunning politician, but he didn’t know much about economics. Alan Greenspan was an economist, who had no reluctance to work with a politician on a plan that would further the cause of the right-wing goals that both he and President Reagan shared….

Exactly what Reagan did, with the help of Alan Greenspan. Consider the following sequence of events:

1) President Reagan appointed Greenspan as chairman of the 1982 National Commission on Social Security Reform (aka The Greenspan Commission)

2) The Greenspan Commission recommended a major payroll tax hike to generate Social Security surpluses for the next 30 years, in order to build up a large reserve in the trust fund that could be drawn down during the years after Social Security began running deficits.

3) The 1983 Social Security amendments enacted hefty increases in the payroll tax in order to generate large future surpluses.

4) As soon as the first surpluses began to role in, in 1985, the money was put into the general revenue fund and spent on other government programs. None of the surplus was saved or invested in anything. The surplus Social Security revenue, that was paid by working Americans, was used to replace the lost revenue from Reagan’s big income tax cuts that went primarily to the rich.

5) In 1987, President Reagan nominated Greenspan as the successor to Paul Volker as chairman of the Federal Reserve Board. Greenspan continued as Fed Chairman until January 31, 2006. (One can only speculate on whether the coveted Fed Chairmanship represented, at least in part, a payback for Greenspan’s role in initiating the Social Security surplus revenue.)

6) In 1990, Senator Daniel Patrick Moynihan of New York, a member of the Greenspan Commission, and one of the strongest advocates the the 1983 legislation, became outraged when he learned that first Reagan, and then President George H.W. Bush used the surplus Social Security revenue to pay for other government programs instead of saving and investing it for the baby boomers. Moynihan locked horns with President Bush and proposed repealing the 1983 payroll tax hike. Moynihan’s view was that if the government could not keep its hands out of the Social Security cookie jar, the cookie jar should be emptied, so there would be no surplus Social Security revenue for the government to loot. President Bush would have no part of repealing the payroll tax hike. The “read-my-lips-no-new-taxes” president was not about to give up his huge slush fund.

Underline mine.

And every President since has continued to loot the SS Trust Fund. But still the Trust Find will not be exhausted until 2034 (assuming 100% payments, continued “looting” at historic rates, and no other changes); and after that recipients will receive 79% of their scheduled payments based on money collected in 2033 (again assuming continued looting and no other changes). Read Social Security trust fund projected to run dry by 2034.

Medicare is in somewhat worse shape. Medicare’s hospital trust fund will run out of money in 2029.

No projection has made about Medicare’s other Trust Fund - the Supplementary Medical Insurance (SMI) Trust Fund (Part B, Part D).

I believe these “run dry” dates are highly conjecture in that our health system, increased health care costs, and the funding payroll rates are very uncertain at this time.

End tutorial.
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Re: The Truth about Tax Reform

Postby Haruo » Fri Nov 10, 2017 8:15 pm

KeithE wrote:[...]
4) As soon as the first surpluses began to role in, in 1985, the money was put into the general revenue fund and spent on other government programs. None of the surplus was saved or invested in anything. The surplus Social Security revenue, that was paid by working Americans, was used to replace the lost revenue from Reagan’s big income tax cuts that went primarily to the rich.

[...]

6) In 1990, Senator Daniel Patrick Moynihan of New York, a member of the Greenspan Commission, and one of the strongest advocates the the 1983 legislation, became outraged when he learned that first Reagan, and then President George H.W. Bush used the surplus Social Security revenue to pay for other government programs instead of saving and investing it for the baby boomers. Moynihan locked horns with President Bush and proposed repealing the 1983 payroll tax hike. Moynihan’s view was that if the government could not keep its hands out of the Social Security cookie jar, the cookie jar should be emptied, so there would be no surplus Social Security revenue for the government to loot. President Bush would have no part of repealing the payroll tax hike. The “read-my-lips-no-new-taxes” president was not about to give up his huge slush fund.

[...]

And every President since has continued to loot the SS Trust Fund. But still the Trust Find will not be exhausted until 2034 (assuming 100% payments, continued “looting” at historic rates, and no other changes); and after that recipients will receive 79% of their scheduled payments based on money collected in 2033 (again assuming continued looting and no other changes). Read Social Security trust fund projected to run dry by 2034.

Medicare is in somewhat worse shape. Medicare’s hospital trust fund will run out of money in 2029.

No projection has made about Medicare’s other Trust Fund - the Supplementary Medical Insurance (SMI) Trust Fund (Part B, Part D).

I believe these “run dry” dates are highly conjecture in that our health system, increased health care costs, and the funding payroll rates are very uncertain at this time.

End tutorial.

I think you're right about all of this, and I hope Reagan is ashamed and is contritely pleading before the Throne for something to be done to undo his action.
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Re: The Truth about Tax Reform

Postby KeithE » Sun Nov 19, 2017 10:19 am

Trickle-down has seldom worked - read Republicans: Well, here we go again.

Behind their legislation is a theory long popular among conservatives: Slash taxes for corporations and rich people, who will then hire, invest and profit - and cause money to trickle into the pockets of ordinary Americans. The White House says the plan's corporate tax cut alone would eventually raise average household incomes by $4,000 a year.


The nonpartisan Tax Policy Center has found that the House tax plan would deliver an average tax cut of $360 for middle-income taxpayers in 2027. A far more generous bounty would go to the highest-earning 1 percent: An average tax cut of $62,000. For the top 0.1 percent, the gain would average $321,000.


Why not try "trickle up" by giving tax cuts to those who are living under the livable wage levels (average about $50K/year across the nation) financed by ending business loopholes that have made the national effective business tax rate 18.6% instead of the nominal 35%. The corporations would be incentivized to produce more (more buyers) instead of continuing to enrich their execs, lobbyists, and stockholders.

Back to the article:
Bruce Bartlett, a former aide to tax-cut advocate Rep. Jack Kemp, said the '81 tax cut made sense: The top individual tax rate was 70 percent - far above the current 39.6 percent - and the economy, unlike the relatively healthy one today, had endured a long era of stagnation.

But Bartlett, an official in the Reagan and George H.W. Bush administrations, has lost faith in tax cuts. In 1986, he noted, the United States slashed the corporate tax rate from 46 percent to 34 percent. Yet wages fell. Likewise, President George W. Bush's tax cuts in 2001 and 2003 produced one of the weakest economic expansions in American history: The Bush tax cuts were still in place when the economy sank into the Great Recession of 2007-2009.{But methinks deregulation of mortgage industry was there immediate cause of the 2008-2009 financial crisis}

And Kansas has just finished a failed experiment in tax cutting. After Gov. Sam Brownback pushed through big tax cuts in 2012 and 2013, the payoff was underwhelming at best: Tax collections fell shy of expectations, triggering a budget crisis. In June, Kansas passed a big tax increase (over Brownback's veto), leading Moody's Investors Services to upgrade the outlook for the state's credit rating.


What's more, corporations are recording healthy profits, enjoying low borrowing rates and sitting on a record $2.3 trillion in cash. If they want to make investments, most already can.

At a meeting of The Wall Street Journal's CEO Council this week, the moderator asked participating executives whether their companies would increase investment if the Republican tax plan became law. Few raised their hands - to the surprise and seeming consternation of Gary Cohn, Trump's top economic adviser, who was in attendance.
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Re: The Truth about Tax Reform

Postby KeithE » Wed Nov 29, 2017 12:48 am

OK folks - this GOP tax plan is of, by, and for the rich people and corporations (i.e. Congressional donors). It was been analyzed to quantify the income distributional effects by the Joint Committee on Taxation (JCT) (evaluating tax cuts) with the Congressional Budget Office (CBO) (evaluating the loss of benefits due to the known program cuts).

Here are the results

Image

Recognize that this is not a per person/per year tax cut. The data is in millions of USD of tax revenue cuts/spending benefits losses and is cumulative by year for the income class as a whole in the first column. Thus the negative numbers by 2027 show that those over $1M income will have $5,780 Billion cumulatively to spread around; those that make less than $75,000/year (i..e the middle class and low class) will be taxed more and/or less spending on that class. So in 2019 this bill is is bad for the lower class and good for the middle through top class; but by 2027 it will be bad for the missile class and lower class (<$75,000/year) and good for the upper middle class and above (>$75,000/year).

The reason for the lack of tax cuts/spending losses is mainly due to programs being cut/dropped for the poor like the drop in Medicaid and non-renewal of CHIP. They did change the tax hike planned for the poorest from 10% to 12% and are keeping it at 10% at the same time they dropped the top bracket from 39.6% to 38.5%. These and many more assumptions / explanations are given at
https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/reconciliationrecommendationssfc.pdf

This is a travesty and being done through a reconciliation approach that will not allow for discussion in Congress. There are many protests going on and rightfully so. I hope at least three GOP senators will see through this scam (middle class tax my eye- the tax cut goes mainly to corporations and their stockholders and they will not invest much of these tax breaks - they have record profits now and are not reinvesting those profits now nor are they increasing wages).
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Re: The Truth about Tax Reform

Postby Haruo » Wed Nov 29, 2017 10:45 am

Well, you know, there's always Revolution.
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Re: The Truth about Tax Reform

Postby KeithE » Wed Nov 29, 2017 11:58 am

Haruo wrote:Well, you know, there's always Revolution.

There will be revolution within a few years when we see what happens to country’s middle/lower classes . Too bad it is not before Nov 2018.

As Joe Stiglitz (a Nobel Economics Laureate) explained this morning on the Morning Joe show, this is a moving target but none of the minor movements in the bill will prevent the travesty of more money going to the corporations taking away services to the poor/middle class. That is the big bottom line. Corporations will just add to the over $2T in mostly big business’s coffers (no demand to wages increase, bring back operations off shore, and will not build new or old products unless the demand increases as pointed out in the Cohn question - please read and watch video). That money will just go to the CEOs/Execs/BoD members, stockholders (maybe in the stock price increase, stock buybacks to Execs). Stiglitz says all the tax cuts should go to the middle/lower classes.

Note that there have been no loopholes (that I know of and I've looked) for businesses ended; what loopholes has ended have been for individuals - state and local taxes no longer deductible, scholarships/stipends for college will no longer be deductible, school teachers can no longer deduct school supplies, more estates taxes exempted, .....

There is so much more.
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Re: The Truth about Tax Reform

Postby Dave Roberts » Wed Nov 29, 2017 12:25 pm

KeithE wrote:
Haruo wrote:Well, you know, there's always Revolution.

There will be revolution within a few years when we see what happens to country’s middle/lower classes . Too bad it is not before Nov 2018.

As Joe Stiglitz (a Nobel Economics Laureate) explained this morning on the Morning Joe show, this is a moving target but none of the minor movements in the bill will prevent the travesty of more money going to the corporations taking away services to the poor/middle class. That is the big bottom line. Corporations will just add to the over $2T in mostly big business’s coffers (no demand to wages increase, bring back operations off shore, and will not build new or old products unless the demand increases as pointed out in the Cohn question - please read and watch video). That money will just go to the CEOs/Execs/BoD members, stockholders (maybe in the stock price increase, stock buybacks to Execs). Stiglitz says all the tax cuts should go to the middle/lower classes.

Note that there have been no loopholes (that I know of and I've looked) for businesses ended; what loopholes has ended have been for individuals - state and local taxes no longer deductible, scholarships/stipends for college will no longer be deductible, school teachers can no longer deduct school supplies, more estates taxes exempted, .....

There is so much more.


This bill is so wrong, but what can we expect with a Congress financed under Citizens United?
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Re: The Truth about Tax Reform

Postby Sandy » Wed Nov 29, 2017 12:28 pm

I ran the numbers on the potential hit my wife and I will take with this. We are definitely "middle class", and we'll have to take the standard deduction now. That will make doing this simpler, since we're losing most of what we can now deduct, but without personal exemptions, our tax liability will go up almost 6%. It's probably close to the same for just about anyone who makes over $60,000 and itemizes.
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Re: The Truth about Tax Reform

Postby KeithE » Wed Nov 29, 2017 1:09 pm

Dave Roberts wrote:
KeithE wrote:
Haruo wrote:Well, you know, there's always Revolution.

There will be revolution within a few years when we see what happens to country’s middle/lower classes . Too bad it is not before Nov 2018.

As Joe Stiglitz (a Nobel Economics Laureate) explained this morning on the Morning Joe show, this is a moving target but none of the minor movements in the bill will prevent the travesty of more money going to the corporations taking away services to the poor/middle class. That is the big bottom line. Corporations will just add to the over $2T in mostly big business’s coffers (no demand to wages increase or increase jobs, bring back operations off shore, and will not build new or old products unless the demand increases as pointed out in the Cohn question - please read and watch video). That money will just go to the CEOs/Execs/BoD members, stockholders (maybe in the stock price increase, stock buybacks to Execs). Stiglitz says all the tax cuts should go to the middle/lower classes.

Note that there have been no loopholes (that I know of and I've looked) for businesses ended; what loopholes has ended have been for individuals - state and local taxes no longer deductible, scholarships/stipends for college will no longer be deductible, school teachers can no longer deduct school supplies, more estates taxes exempted, .....

There is so much more.


This bill is so wrong, but what can we expect with a Congress financed under Citizens United?


On target Dave. But we must fight this "Tax Cut and Jobs(??)” bill as well as:

1) overturn Citizens United as Davis points out - allows unlimited donations to politicians from companies and their large coffers
2) overturn McCutheon - allows unlimited donations to politicians from the rich
3) limit all congressional terms to one period (so that are not running for their next term while in office and voting - needing money from donors who have strings attached).
4) impeach/remove Trump
5) have the over 264 congressional sexual abusers payback the over $17M spent to settle these claims and release their names and abuse details. Why is it that political figures do not get fired while allegations are made as happens in the entertainment, most of the news outlets do get fired allegations are first alleged.

Image

That's just for starters.
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