Republican Tax Philosophy

2003TIDE · Nov 21, 2017

Bodhisattva said:
.... or do they pay it out to shareholders?

Technically both. They've done acquisitions and stock buybacks in order to push the price up for shareholders.

If only we had some data that showed us what happened when companies got an infusion from tax cuts,
Oh wait we did it in 2004, and guess what companies didn't reinvest in capital or people. 92% were used for buybacks and dividends

Bodhisattva · Nov 21, 2017

CharminTide said:
]What we probably can agree on is that too much focus is placed on 4-year degrees, when many people would be better served by vocational schooling that has largely evaporated. When essentially all jobs require more than a GED equivalent to even be interviewed, but all available schooling entails high cost and requires loans repaid at high interest rates, you're going to get a young population that enters the workforce in debt. Not everyone will be able to pay that off. Of those who can, their early years are focused on paying off their loans at the expense of spending that actually grows the economy -- like houses, cars, leisure. They hold off on having kids or starting families. It's a cascading effect that impacts the entire country. And until millennials get over their political apathy and start voting out the politicians who keep these absurd systems in place, the student loan industry will continue to drag our economy underwater like a cement block.

I agree their should be more emphasis on vocational schooling. Far too many people are getting six figure loans for degrees like gender studies, sociology, etc. Per usual, government oversteps its bounds to help, but ends up causing great harm by blowing up tuition costs. This encourages expensive pursuits of degrees that will never pay off. And, as you point out, it causes people to delay starting their families as they spend a decade or more working to pay off creditors.

Bodhisattva · Nov 21, 2017

CharminTide said:
A timely example of the glorious free market at work.

Almost all student loan fraud claims involve for-profit colleges, study finds

How is this a free market when it involves government loans? Government programs, not surprisingly, seem to exist to be gamed. I would think a lot (most?) of these shady "universities" would shut down without the government propping them up.

Bodhisattva · Nov 21, 2017

2003TIDE said:
Technically both. They've done acquisitions and stock buybacks in order to push the price up for shareholders.

If only we had some data that showed us what happened when companies got an infusion from tax cuts,
Oh wait we did it in 2004, and guess what companies didn't reinvest in capital or people. 92% were used for buybacks and dividends

A point in time is not the totality of options available. And you act like increased dividends is a bad thing. It is not. Again, if you know that is a certainty, then go get some of that free money.

Tide1986 · Nov 21, 2017

Bodhisattva said:
A point in time is not the totality of options available. And you act like increased dividends is a bad thing. It is not. Again, if you know that is a certainty, then go get some of that free money.

Agreed.

Sometimes it does make financial sense for a company to invest in its own stock.

uafanataum · Nov 21, 2017

I think this opinion would not be popular with either side but what about this: Companies can make as much income as they want as long as it is reinvested into American jobs or products. However any amount of money beyond a certain amount is very heavily taxed. This encourages companies to invest most of their money into American jobs and products but penalised companies that just want to hold onto their money.

TIDE-HSV · Nov 21, 2017

I'm watching with interest, since I'm a former accountant with a minor in economics and an LLM in Taxation from NYU. Over the years, there have been potshots taken at the home interest deduction. The real estate lobby has always been able to shoot it down. There will be many people out there who can no longer afford their homes, even with the doubled standard deduction. IN my case, I plan to pay off my home (I know not everyone can do that) and take the increased standard deduction...

Bamaro · Nov 21, 2017

TIDE-HSV said:
I'm watching with interest, since I'm a former accountant with a minor in economics and an LLM in Taxation from NYU. Over the years, there have been potshots taken at the home interest deduction. The real estate lobby has always been able to shoot it down. There will be many people out there who can no longer afford their homes, even with the doubled standard deduction. IN my case, I plan to pay off my home (I know not everyone can do that) and take the increased standard deduction...

Comprehensive tax reform should include a phasing out of the mortgage interest deduction (and many many other deductions) along with offsetting tax rates.

TIDE-HSV · Nov 21, 2017

Bamaro said:
Comprehensive tax reform should include a phasing out of the mortgage interest deduction (and many many other deductions) along with offsetting tax rates.

Oh, I agree. My point is that millions of Americans have made their home, really financial future decisions, based on the tax code as it is. It should be phased out over a period of years to soften the blow. Also, I'd like to see the deduction for grad education stay in but I'd like to see as a tax policy incentives for trade education, directed towards schools with demonstrated expertise in actually placing people in jobs, not the private scam school educational loan thing that's going on now. I think we have a half-healthy economy with bad distortions. I don't believe we need more sugar fed to it. I'm a fiscal conservative, so you can understand that. I don't want trillions added to the deficit which is supposed to be paid for with pie-in-the-sky promised of millions of jobs. The.jobs.aren't.there.to.be.filled. So it just an inflation giveaway. I can go along with a corporate reduction - with changes in the rules to make sure the money is repatriated and goes into expanding an economy - as a quid pro quo. Right now, it's just a huge piñata, packed with favorite giveaways...

Tide1986 · Nov 21, 2017

uafanataum said:
I think this opinion would not be popular with either side but what about this: Companies can make as much income as they want as long as it is reinvested into American jobs or products. However any amount of money beyond a certain amount is very heavily taxed. This encourages companies to invest most of their money into American jobs and products but penalised companies that just want to hold onto their money.

Reference the accumulated earnings tax and the personal holding company tax. These taxes are intended to compel distributions and to discourage the use of a corporation for tax avoidance purposes.

TIDE-HSV · Nov 21, 2017

Tide1986 said:
Reference the accumulated earnings tax and the personal holding company tax. These taxes are intended to compel distributions and to discourage the use of a corporation for tax avoidance purposes.

True, and one point to watch is how the bill is drawn - and it may be left up to regulations as to how sections 531 and 542 et seq. will apply to repatriated earnings. Of course 531 is of much more importance, given the size of companies falling under 542...

CharminTide · Nov 27, 2017

Senate GOP tax bill would cost $1.4 trillion, hit poor and middle class harder than estimated, CBO says

On Sunday, the Congressional Budget Office released its analysis of the tax overhaul Senate Republicans hope to pass this week, and like a previous analysis by the Joint Committee on Taxation (JCT), it found that the bill would increase the federal deficit by about $1.4 trillion over 10 years. The CBO also found that, compared to the JCT estimate, the bill would be worse for Americans earning less than $75,000, factoring in the changes to Medicaid, Medicare, and other health-related programs as well as zeroing out the Affordable Care Act individual mandate.

Under the CBO analysis, Americans earning up to $30,000 a year would be worse off by 2019, those earning $40,000 or less would take a hit by 2021, and Americans earning $75,000 or less would be worse off by 2027. Americans earning $100,000 to $500,000 a year would generally fare the best until 2027, when millionaires would reap the most benefits.

MattinBama · Nov 27, 2017

CharminTide said:
Senate GOP tax bill would cost $1.4 trillion, hit poor and middle class harder than estimated, CBO says

MattinBama · Nov 27, 2017

http://thehill.com/opinion/finance/361878-goodbye-republican-congress

By the way, do you own a jet? Great news, the House bill eliminates management fee taxes paid by private jet owners. Even costs related to the hiring and the training of crew members won’t get taxed! And really, what good is a jet without some bubbly? Under the House bill, champagne producers and importers are eligible for a special tax credit.

Even the revered family vacation is under assault by Washington, as a proposal to triple fees to enter our National Parks is on the table. Finally, a new proposal, stealthily hidden in the bill, would limit deductions for charitable giving to only the top 5 percent of taxpayers versus the approximately 33 percent who are eligible now.

The estimated loss of donations to charity, especially small charities, is an astounding $20 billion. That’s right, as we enter the holiday season, Congress is a regular Grinch, essentially proposing to cut the lifeblood of donations to our churches, our homeless shelters, our food banks, veterans outreach, all service organizations that make up the fiber of our communities. Is nothing sacred?

92tide · Nov 27, 2017

MattinBama said:
http://thehill.com/opinion/finance/361878-goodbye-republican-congress

if only we could have had some idea that they would do something like this ...

CharminTide · Nov 27, 2017

Killing medical tax break will hammer U.S. middle-class seniors

U.S. Republican lawmakers want to cut taxes for corporations and wealthy people by $1.3 trillion - and they seem to want seniors to foot a good chunk of the bill.

Their 2018 budget plan would chop $473 billion out of Medicare and $1.3 trillion from Medicaid. But the House tax plan also calls for elimination of the itemized deduction for high medical expenses.

The deduction allows taxpayers who itemize to deduct medical expenses exceeding 10 percent of adjusted gross income. This is helpful to anyone dealing with disabilities, acute or chronic conditions or long-term care and assisted living costs.

But the medical expense deduction is especially useful for older people, for the simple reason that they are more likely to struggle with acute and chronic health problems. And it is used mainly by middle-class households. Nearly half (49 percent) of taxpayers who deducted medical expenses in 2015 had income below $50,000 according to analysis of IRS records by the AARP Public Policy Institute; 69 percent had income less than $75,000.

CharminTide · Nov 27, 2017

So, a majority of major corporate CEOs claim they won't use the tax breaks to invest in growth or to benefit their employees, and now the majority of small business owners oppose the plan. How amusing.

Poll: Majority of small businesses oppose GOP tax bill

A majority of small businesses in a new survey opposes the GOP tax plan.

A Public Policy Polling poll, released by Businesses for Responsible Tax Reform, a group opposed to the GOP tax bills, finds 51 percent of small businesses are against the plan. About one-third, 34 percent, support the GOP tax plan.

Slightly more than 50 percent of the small business owners surveyed think the GOP tax plan supports large corporations over small businesses. A majority of small business owners also said the plan will benefit wealthy corporations the most.

2003TIDE · Nov 27, 2017

CharminTide said:
Killing medical tax break will hammer U.S. middle-class seniors

It's sad that seniors in red states vote against their own well being. I heard my wife's grandmother say over Thanksgiving that they (her and her husband) would never vote for a Democrat because they "support abortion and gay marriage." 2 "issues" that literally have zero impact on them. That was 2 minutes after her complaining about their taxes going up and Medicare is getting cuts. BTW she's also voting for Moore because "that was a long time ago" and "it's fake news from McConnell." Sigh

chanson78 · Nov 27, 2017

2003TIDE said:
It's sad that seniors in red states vote against their own well being. I heard my wife's grandmother say over Thanksgiving that they (her and her husband) would never vote for a Democrat because they "support abortion and gay marriage." 2 "issues" that literally have zero impact on them. That was 2 minutes after her complaining about their taxes going up and Medicare is getting cuts. BTW she's also voting for Moore because "that was a long time ago" and "it's fake news from McConnell." Sigh

How dare you assume it is against her best interests. Don't you know, that presuming to determine what issues most impact someone, and pointing out that their vote does not fall in line with those issues is the height of liberal elitism?

2003TIDE · Nov 27, 2017

chanson78 said:
How dare you assume it is against her best interests. Don't you know, that presuming to determine what issues most impact someone, and pointing out that their vote does not fall in line with those issues is the height of liberal elitism?

I know right. When she brought up abortion, I wanted to ask her how many children she thought would die when 13 million poor people lose healthcare, but I didn't feel that would lead to a great car ride home with the wife. So I didn't.

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