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  • Originally posted by Moliere View Post
    I think they are trying to say that if there are $100 each year of tax cuts in the bill, the top 1% collectively get$31 of those tax cuts in 2017 and $48 of those tax cuts in 2027
    That's what I thought at first and then I read the accompanying text and I am not so sure. The numbers are based on "percentage of their income" so it seems to be comparing apples and oranges.

    And 2027? How is that projected?
    "There is no creature more arrogant than a self-righteous libertarian on the web, am I right? Those folks are just intolerable."
    "It's no secret that the great American pastime is no longer baseball. Now it's sanctimony." -- Guy Periwinkle, The Nix.
    "Juilliardk N I ibuprofen Hyu I U unhurt u" - creekster

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    • Originally posted by Jeff Lebowski View Post
      That's what I thought at first and then I read the accompanying text and I am not so sure. The numbers are based on "percentage of their income" so it seems to be comparing apples and oranges.
      Yeah, given that the richest 1% pays about half the taxes this "revelation" doesn't seem all that surprising.
      "If there is one thing I am, it's always right." -Ted Nugent.
      "I honestly believe saying someone is a smart lawyer is damning with faint praise. The smartest people become engineers and scientists." -SU.
      "Yet I still see wisdom in that which Uncle Ted posts." -creek.
      GIVE 'EM HELL, BRIGHAM!

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      • Originally posted by Jeff Lebowski View Post
        That's what I thought at first and then I read the accompanying text and I am not so sure. The numbers are based on "percentage of their income" so it seems to be comparing apples and oranges.

        And 2027? How is that projected?
        Moliere's got it right. 2027? To allow the senate to just need a simple majority to pass, the plan can't keep most of the cuts (deficit neutral after 10 I believe). Essentially republicans are planning on only trying to keep the corporate and business pass through stuff after 2027. The provisions on the individuals levels (e.g., the expanded child tax credit) will revert to 2017 law. Additionally, the parts that raise taxes (e.g., loss of state and local taxes as deductions) won't revert after ten years. Consequently, most of the distribution of tax payers after ten years will see a tax increase.
        Last edited by pelagius; 11-06-2017, 05:14 PM.

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        • Originally posted by pelagius View Post
          Moliere's got it right. 2027? To allow the senate to just need a simple majority to pass, the plan can't keep most of the cuts (deficit neutral after 10 I believe). Essentially republicans are planning on only trying to keep the corporate and business pass through stuff after 2027. The provisions on the individuals levels (e.g., the expanded child tax credit) will revert to 2017 law. Additionally, the parts that raise taxes (e.g., loss of state and local taxes as deductions) won't revert after ten years. Consequently, most of the distribution of tax payers after ten years will see a tax increase.
          Aha... Thanks.
          "There is no creature more arrogant than a self-righteous libertarian on the web, am I right? Those folks are just intolerable."
          "It's no secret that the great American pastime is no longer baseball. Now it's sanctimony." -- Guy Periwinkle, The Nix.
          "Juilliardk N I ibuprofen Hyu I U unhurt u" - creekster

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          • WSJ graphic:

            "There is no creature more arrogant than a self-righteous libertarian on the web, am I right? Those folks are just intolerable."
            "It's no secret that the great American pastime is no longer baseball. Now it's sanctimony." -- Guy Periwinkle, The Nix.
            "Juilliardk N I ibuprofen Hyu I U unhurt u" - creekster

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            • Originally posted by Jeff Lebowski View Post
              WSJ graphic:

              I think that graphic would be more meaningful if it used percentages.

              Sent from my Nexus 6P using Tapatalk

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              • Originally posted by Bo Diddley View Post
                I think that graphic would be more meaningful if it used percentages.
                If I am reading that correctly, it looks like a deficit bomb.

                But more revenue will magically appear, right?
                "There is no creature more arrogant than a self-righteous libertarian on the web, am I right? Those folks are just intolerable."
                "It's no secret that the great American pastime is no longer baseball. Now it's sanctimony." -- Guy Periwinkle, The Nix.
                "Juilliardk N I ibuprofen Hyu I U unhurt u" - creekster

                Comment


                • Originally posted by Jeff Lebowski View Post
                  If I am reading that correctly, it looks like a deficit bomb.

                  But more revenue will magically appear, right?
                  Without question.

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                  • Originally posted by Jeff Lebowski View Post
                    WSJ graphic:

                    So much winning!! Anyone tired of winning yet?


                    Sent from my iPhone using Tapatalk
                    "Discipleship is not a spectator sport. We cannot expect to experience the blessing of faith by standing inactive on the sidelines any more than we can experience the benefits of health by sitting on a sofa watching sporting events on television and giving advice to the athletes. And yet for some, “spectator discipleship” is a preferred if not primary way of worshipping." -Pres. Uchtdorf

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                    • Originally posted by Bo Diddley View Post
                      I think that graphic would be more meaningful if it used percentages.

                      Sent from my Nexus 6P using Tapatalk
                      uh wouldnt it look exactly the same?

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                      • Originally posted by Maximus View Post
                        uh wouldnt it look exactly the same?
                        No

                        Consider that you can't tell what proportion of the rich people are winners and losers. Going with a ratio or a percentage would give you a better idea of who are the winners and losers, and what your odds are in a particular income bracket.
                        Last edited by Bo Diddley; 11-06-2017, 08:26 PM.

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                        • Originally posted by Jeff Lebowski View Post
                          If I am reading that correctly, it looks like a deficit bomb.

                          But more revenue will magically appear, right?
                          Magically, no... but there is a good chance there would be more tax revenue given the history:

                          The Historical Lessons of Lower Tax Rates

                          There is a distinct pattern throughout American history: When tax rates are reduced, the economy's growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden - a consequence that should lead class-warfare politicians to support lower tax rates.


                          Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to "soak the rich," the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.
                          [...]
                          http://www.heritage.org/taxes/report...ower-tax-rates

                          Reducing the corp tax rate could maybe help with economy growth. Especially if it encourages companies like Apple to bring some of their offshore cash reserves onshore to invest domestically. Who knows about the other tax cuts.

                          The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.
                          LOL, the top 1 now pay about half of the tax bill now.
                          "If there is one thing I am, it's always right." -Ted Nugent.
                          "I honestly believe saying someone is a smart lawyer is damning with faint praise. The smartest people become engineers and scientists." -SU.
                          "Yet I still see wisdom in that which Uncle Ted posts." -creek.
                          GIVE 'EM HELL, BRIGHAM!

                          Comment


                          • Originally posted by Uncle Ted View Post
                            Magically, no... but there is a good chance there would be more tax revenue given the history:


                            http://www.heritage.org/taxes/report...ower-tax-rates

                            Reducing the corp tax rate could maybe help with economy growth. Especially if it encourages companies like Apple to bring some of their offshore cash reserves onshore to invest domestically. Who knows about the other tax cuts.



                            LOL, the top 1 now pay about half of the tax bill now.
                            n=4
                            Te Occidere Possunt Sed Te Edere Non Possunt Nefas Est.

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                            • Originally posted by old_gregg View Post
                              n=4
                              No doubt (old_gregg is right, people need to step up their citation of empirical work game) ... I think this is probably the best case: https://papers.ssrn.com/sol3/papers....act_id=3028135

                              The empirical relation between lowering corporate taxes and real wages (for example, internationally ... and that is where you get the richest variation in changes in corporate tax rates) is typically positive in most past empirical papers. However, in my view the best empirical studies (those with the best empirical design and data) find a very small relation. A relation that's so small that it's hard to justify the republican's approach based on this empirical work.

                              That said, one mechanism I think is plausible is something like the following: Lowering the corporate tax rate shifts the optimal capital structure for most firms to a smaller leverage ratio (less debt). This would be a prediction of capital structure models that highlight the trade-off between the tax advantage of debt over equity and the costs of financial distress as first order effects on capital structure (we teach basic forms of these models to MBAs). They are not as strongly supported by the data as one would like, but there's probably something to them. If optimal capital structure shifts to less debt -> lower probability of default -> less employment disruption and layoff -> higher real wages. I doubt this is a very big effect, but channels like this and a few other could lead to some positive effect with respect to wages and employment.
                              Last edited by pelagius; 11-07-2017, 12:42 AM.

                              Comment


                              • Originally posted by pelagius View Post
                                No doubt (old_gregg is right, people need to step up their citation of empirical work game) ... I think this is probably the best case: https://papers.ssrn.com/sol3/papers....act_id=3028135

                                The empirical relation between lowering corporate taxes and real wages (for example, internationally ... and that is where you get the richest variation in changes in corporate tax rates) is typically positive in most past empirical papers. However, in my view the best empirical studies (those with the best empirical design and data) find a very small relation. A relation that's so small that it's hard to justify the republican's approach based on this empirical work.

                                That said, one mechanism I think is plausible is something like the following: Lowering the corporate tax rate shifts the optimal capital structure for most firms to a smaller leverage ratio (less debt). This would be a prediction of capital structure models that highlight the trade-off between the tax advantage of debt over equity and the costs of financial distress as first order effects on capital structure (we teach basic forms of these models to MBAs). They are not as strongly supported by the data as one would like, but there's probably something to them. If optimal capital structure shifts to less debt -> lower probability of default -> less employment disruption and layoff -> higher real wages. I doubt this is a very big effect, but channels like this and a few other could lead to some positive effect with respect to wages and employment.
                                What do you believe if the lowering of the corporate rate were tied to reinvestment in certain sectors or a requirement for employment in the US? Would that increase the probability of some success? I haven't refined how to make the ties but hopefully you get the idea.
                                "Guitar groups are on their way out, Mr Epstein."

                                Upon rejecting the Beatles, Dick Rowe told Brian Epstein of the January 1, 1962 audition for Decca, which signed Brian Poole and the Tremeloes instead.

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