Why cut taxes?

[Uncle Ted]

See my sig line below.

|
|
v

.
.
.

"Socialism is not bad IMHO" - byu71

[Uncle Ted]

So sell me... Where will the significant spending cuts be made?

A Plan to Cut Federal Government Spending

https://object.cato.org/sites/cato.o.../9/hb111-4.pdf

[Jeff Lebowski]

When are you dummies going to figure out both parties are just full of sh*t and just embrace the libertarian party?

See my sig line below.

|
|
v

[PaloAltoCougar]

When are you dummies going to figure out both parties are just full of sh*t and just embrace the libertarian party?

...

So sell me... Where will the significant spending cuts be made?

[Uncle Ted]

A belated thanks to cowboy and others for some interesting thoughts. I especially like the changes to Social Security (pushing out the retirement age and lifting the cap). I’d also keep in place the relatively high tax rates for income above $1 Million. I’d kill the “carried interest” feature once and for all, and I’d put a temporary (six months?) tax of only 15% (maybe more, but below 20) on offshore funds being brought back into the U.S. I’d lower the corporate tax rate as well, but with an understanding that if these changes resulted in rising deficits, the higher rates are coming back.

Republicans are caving to PAC's demands... Well, almost.

House GOP tax plan will keep top 39.6% tax rate for rich, delay estate tax repeal for 2-3 years

The much-anticipated House GOP tax plan will keep the current top tax rate of 39.6% for the most affluent Americans but will make that bracket apply only to "substantially" higher incomes than the current $470,700 for couples, House Speaker Paul D. Ryan told a group of conservative interest groups Tuesday.


The plan will also delay any repeal of the estate tax for two to three years, the speaker told the group, according to participants in the private meeting.


Ryan said he wanted the House bill to immediately cut the corporate tax rate to 20% from the current 35%, but he acknowledged that the final version may be different. "I can't speak to what the Senate's going to do," he told the group.
[...]

http://www.latimes.com/politics/wash...htmlstory.html

[Uncle Ted]

What do you call it when Bernie Sanders or another politician promise free health care, free college, free child care? Is that not vote buying? Is it really hyperbole to call it that?

And Trump wants to keep out muslims and build a wall. So is it real hyperbole to claim that republicans hate minorities? Is that not vote buying?

We can do this all day.

When are you dummies going to figure out both parties are just full of sh*t and just embrace the libertarian party?

[PaloAltoCougar]

A belated thanks to cowboy and others for some interesting thoughts. I especially like the changes to Social Security (pushing out the retirement age and lifting the cap). I’d also keep in place the relatively high tax rates for income above $1 Million. I’d kill the “carried interest” feature once and for all, and I’d put a temporary (six months?) tax of only 15% (maybe more, but below 20) on offshore funds being brought back into the U.S. I’d lower the corporate tax rate as well, but with an understanding that if these changes resulted in rising deficits, the higher rates are coming back.

[Jeff Lebowski]

What do you call it when Bernie Sanders or another politician promise free health care, free college, free child care? Is that not vote buying? Is it really hyperbole to call it that?

And Trump wants to keep out muslims and build a wall. So is it real hyperbole to claim that republicans hate minorities? Is that not vote buying?

We can do this all day.

[Crockett]

I don't prefer a welfare state. I am fiscally conservative. I consider myself an independent, but I vote republican more than democrat.

But your earlier post I quoted was uber-partisan hyperbole. It is the equivalent of stating that all republicans hate minorities and poor people.

What do you call it when Bernie Sanders or another politician promise free health care, free college, free child care? Is that not vote buying? Is it really hyperbole to call it that?

[Moliere]

Pandering to your donors?

Sent from my SM-G930V using Tapatalk

Yes, however, when 45% of American households pay no federal income taxes and the richest 20% pay almost 90% of all federal income taxes, at what point will there ever be tax cuts? Who's taxes do you cut? Pretty much any tax cut will benefit the wealthy more than any others given that the wealthy are the ones paying pretty much all the FIT.

I guess the real question is how big of a percentage of American households shoulnd't be required to pay FIT?

[Uncle Ted]

Yeah, please let's not change capital gains to regular income. That would be awful.

Wat? That would just make me convert more money to Bitcoin and transfer it out of the country using this thing called the internet.

[cowboy]

Yeah, please let's not change capital gains to regular income. That would be awful.

I don't think anyone is thinking that way. The increase that came with the ACA was bad enough. In my opinion, if any tax should be low, it should be the capital gains tax.

This thing is supposed to be revealed tomorrow. I'll laugh it's a tax cut for the super wealthy paid for by tax raises on the middle class.

The bolded portion highlights the problem with the tax discussion. First, tax cuts aren't "paid for". They aren't an expenditure, but the tax-everyone-else crowd describes them as such in an effort to frame the discussion around revenue rather than spending. Second, most of the middle class pays nothing or very, very little in income taxes, yet politicians scream for middle class tax relief because it is politically popular. The cold, hard fact is that we don't need a tax break if we are pulling down less than $120k and have kids at home because our federal income tax expenditures probably total less than we spend on entertainment. Our income tax burden is born nearly entirely by the top 20% of earners, and more than have of that is shouldered by the top 5%, which is substantially disproportional based on total earnings in the US. How much more should we expect them to pay?

Again, I feel strongly that the secret to increased revenue and debt repayment is economic growth. I'm actually a proponent of a graduated tax because it makes it easier for people to become wealthy and achieve the American dream. I am not, however, in favor of soaking the rich at extraordinary high levels 'because they can afford it'. Sure, they may be able to afford it, but the money they save in taxes is not going to leave the economy. It will be spent, and I believe they will do more for the economy by spending it themselves than giving it to the government to spend for them.

Oh, and one more thing. We should restructure the repatriation tax to give a temporary holiday to all repatriated earnings, and then tax the rest as capital gains, with an exemption similar to the 1099 for repatriated funds that are invested in long-term assets.

[BlueK]

Yeah, please let's not change capital gains to regular income. That would be awful.

This thing is supposed to be revealed tomorrow. I'll laugh if it's a tax cut for the super wealthy paid for by tax raises on the middle class.

[Jeff Lebowski]

I understand your opinion on capital gains, and I think a lot of people agree. The primary reason for my position is that Cap X funds are usually reinvested, and taxing them at a low rate decreases the transaction cost of moving investment capital from one investment to another. Lower barriers for people to transferring capital to more productive investments increases the productivity of the economy's aggregate capital investment, and thereby grows the economy faster through more flexible and efficient capital allocation.

From the perspective of fairness, capital gains represent returns over a number of years, and it doesn't seem fair to lump them all together and tax them at once if it will be taxed at the highest personal rate. This is equivalent to taxing the entire appreciation of your retirement portfolio at once. Unlike retirement portfolio's, capital investments like real estate can't all be liquidated gradually. This is why capital gains are taxed at a different rate.

Regarding Social Security, it's all just math. At a 3% return and retirement at age 70 with a 20-year payout, a person needs to invest just over 9% of their income for 45 years (age 25 to 70) to receive a benefit equal to 40% of their working income. Currently, the benefit is capped at around $2,700, equivalent to 40% of an $84k salary, so it seems reasonable to cut the withholding in half at some point beyond that. Some withholding needs to be taken out at upper levels to make up for the disproportionate share of workers to retirees at present.

This is all just opinion on my part. I've certainly put a lot of thought into it over the years, but I'm by no means an expert. I'd be interested to read Pelagius' take on things.

Yeah, please let's not change capital gains to regular income. That would be awful.

[cowboy]

good stuff cowboy, about the only differences I have is with capital gains and SS taxes. Philosophically I would treat all income as income. Make the decision to sell an asset an economic rather than a tax reasons. Also I would completely remove the cap on SS taxes.

I understand your opinion on capital gains, and I think a lot of people agree. The primary reason for my position is that Cap X funds are usually reinvested, and taxing them at a low rate decreases the transaction cost of moving investment capital from one investment to another. Lower barriers for people to transferring capital to more productive investments increases the productivity of the economy's aggregate capital investment, and thereby grows the economy faster through more flexible and efficient capital allocation.

From the perspective of fairness, capital gains represent returns over a number of years, and it doesn't seem fair to lump them all together and tax them at once if it will be taxed at the highest personal rate. This is equivalent to taxing the entire appreciation of your retirement portfolio at once. Unlike retirement portfolio's, capital investments like real estate can't all be liquidated gradually. This is why capital gains are taxed at a different rate.

Regarding Social Security, it's all just math. At a 3% return and retirement at age 70 with a 20-year payout, a person needs to invest just over 9% of their income for 45 years (age 25 to 70) to receive a benefit equal to 40% of their working income. Currently, the benefit is capped at around $2,700, equivalent to 40% of an $84k salary, so it seems reasonable to cut the withholding in half at some point beyond that. Some withholding needs to be taken out at upper levels to make up for the disproportionate share of workers to retirees at present.

This is all just opinion on my part. I've certainly put a lot of thought into it over the years, but I'm by no means an expert. I'd be interested to read Pelagius' take on things.