Tax Reform

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Tax Reform

Postby Kane » Wed Sep 27, 2017 9:06 am

Well, here's the synopsis:

https://www.wsj.com/public/resources/do ... 170927.pdf

This looks ballsy...and I have no idea how they're going to plug that deficit with all of these cuts. I'm not sure this is going to pass. Expensing of all capital investments for five years is particularly interesting to me...

Let's also consider this:

The Hill wrote:
Top GOP senator: Passing tax reform 'almost impossible' without Dems' help

Senate Finance Committee Chairman Orrin Hatch (R-Utah) said on Wednesday the chances of Republicans passing tax reform is "almost impossible" without help from the Democrats.

"It's tough to do. We're so equally divided that it’s going to be almost impossible to do without some Democratic help and I’m hopeful that we can do that," Hatch told Maria Bartiromo on the Fox Business Network's "Mornings with Maria."

However, Hatch said he believed the Republicans would get tax reform in 2017 if they enlisted the help of Democrats.

"I think we can but we will need to have some Democrat help. I think we got to put aside the differences and start working together," he said.
Hatch's comments come as President Trump prepares to promote Republicans' tax framework at a rally in Indiana today.


The Trump administration and congressional Republicans are looking to secure a major legislative victory in the form of tax reform after failing for nine months to repeal and replace ObamaCare.

The framework would reduce the top tax rate for the wealthy, while cutting taxes for business and eliminate most itemized deductions, according to a copy obtained by The Hill.

Republicans say they are aiming to simplify the tax code through providing tax relief to the middle class make American business more competitive with foreign businesses.
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Re: Tax Reform

Postby John Galt » Wed Sep 27, 2017 9:42 am

Kane wrote:Well, here's the synopsis:

https://www.wsj.com/public/resources/do ... 170927.pdf

This looks ballsy...and I have no idea how they're going to plug that deficit with all of these cuts. I'm not sure this is going to pass. Expensing of all capital investments for five years is particularly interesting to me...

Let's also consider this:

The Hill wrote:
Top GOP senator: Passing tax reform 'almost impossible' without Dems' help

Senate Finance Committee Chairman Orrin Hatch (R-Utah) said on Wednesday the chances of Republicans passing tax reform is "almost impossible" without help from the Democrats.

"It's tough to do. We're so equally divided that it’s going to be almost impossible to do without some Democratic help and I’m hopeful that we can do that," Hatch told Maria Bartiromo on the Fox Business Network's "Mornings with Maria."

However, Hatch said he believed the Republicans would get tax reform in 2017 if they enlisted the help of Democrats.

"I think we can but we will need to have some Democrat help. I think we got to put aside the differences and start working together," he said.
Hatch's comments come as President Trump prepares to promote Republicans' tax framework at a rally in Indiana today.


The Trump administration and congressional Republicans are looking to secure a major legislative victory in the form of tax reform after failing for nine months to repeal and replace ObamaCare.

The framework would reduce the top tax rate for the wealthy, while cutting taxes for business and eliminate most itemized deductions, according to a copy obtained by The Hill.

Republicans say they are aiming to simplify the tax code through providing tax relief to the middle class make American business more competitive with foreign businesses.


i think this would go a long way to plugging holes:

    ends the perverse incentive to keep foreign profits offshore by exempting them when they are repatriated to the United States
    taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations

from a high level, this looks pretty good and i think that it's not a tough sell unlike other things republicans have tried this year
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Re: Tax Reform

Postby Winchester » Wed Sep 27, 2017 9:52 am

I'll read it in more detail (not that there is a lot of detail) but initial thoughts:

Standard deduction/itemized deductions - Good. Should also get rid of Charitable and Home Mortgage deduction, but politically will never happen.

Change in individual rates - Neutral, would move it to support if get rid of capital gains/dividend rates.

Enhanced Child Tax Credits - Strongly opposed, this is the type of garbage that needs to go from the tax code. Again it's about the only way to get the plebes money as most of em don't pay significant income tax so politically it's probably a good move to placate people to get the corporate tax cuts through.

Work, education and retirement. - I have absolutely no idea what they're planning. More than likely it will help those who do/can contribute to retirement but the lower 50% will still be f**k.

Other Provisions - have no idea what they are planning, but if they get rid of a bunch of useless tax credits that benefit very few, I'm good with it.

Death and Generation skipping taxes - bad, bad, bad as a social policy... I don't see how they can do this w/o removing the step up in basis on inheritance which means giant tax shift from the 1% to the lower classes (who currently get step up in basis and no estate tax because the exemption is 5.4mil).

Just to touch on the expensing of capital assets - we've defacto had that for quite some time (see section 179 deduction) for the vast majority of small business. - Excellent policy, though as tax rates decrease businesses are less likely to invest in capital.

For corporate reform, I'd rather see a dividend paid deduction combined with taxing dividends at regular tax rates to the recipients.
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Re: Tax Reform

Postby Kane » Wed Sep 27, 2017 10:08 am

Winchester wrote:I'll read it in more detail (not that there is a lot of detail) but initial thoughts:

Standard deduction/itemized deductions - Good. Should also get rid of Charitable and Home Mortgage deduction, but politically will never happen.

Change in individual rates - Neutral, would move it to support if get rid of capital gains/dividend rates.

Enhanced Child Tax Credits - Strongly opposed, this is the type of garbage that needs to go from the tax code. Again it's about the only way to get the plebes money as most of em don't pay significant income tax so politically it's probably a good move to placate people to get the corporate tax cuts through.

Work, education and retirement. - I have absolutely no idea what they're planning. More than likely it will help those who do/can contribute to retirement but the lower 50% will still be f**k.

Other Provisions - have no idea what they are planning, but if they get rid of a bunch of useless tax credits that benefit very few, I'm good with it.

Death and Generation skipping taxes - bad, bad, bad as a social policy... I don't see how they can do this w/o removing the step up in basis on inheritance which means giant tax shift from the 1% to the lower classes (who currently get step up in basis and no estate tax because the exemption is 5.4mil).

Just to touch on the expensing of capital assets - we've defacto had that for quite some time (see section 179 deduction) for the vast majority of small business. - Excellent policy, though as tax rates decrease businesses are less likely to invest in capital.

For corporate reform, I'd rather see a dividend paid deduction combined with taxing dividends at regular tax rates to the recipients.


Since I'm buying a house soon I'd prefer to enjoy my deduction there.... :ymsmug: Get what I can while the rest of corporate america rips us all off.

On Section 179:

Section 179 does come with limits - there are caps to the total amount written off ($500,000 for 2017), and limits to the total amount of the equipment purchased ($2,000,000 in 2017). The deduction begins to phase out dollar-for-dollar after $2,000,000 is spent by a given business, so this makes it a true small and medium-sized business deduction.


I'm guessing these limits might be raised?
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Re: Tax Reform

Postby Winchester » Wed Sep 27, 2017 10:30 am

Kane wrote:
Winchester wrote:I'll read it in more detail (not that there is a lot of detail) but initial thoughts:

Standard deduction/itemized deductions - Good. Should also get rid of Charitable and Home Mortgage deduction, but politically will never happen.

Change in individual rates - Neutral, would move it to support if get rid of capital gains/dividend rates.

Enhanced Child Tax Credits - Strongly opposed, this is the type of garbage that needs to go from the tax code. Again it's about the only way to get the plebes money as most of em don't pay significant income tax so politically it's probably a good move to placate people to get the corporate tax cuts through.

Work, education and retirement. - I have absolutely no idea what they're planning. More than likely it will help those who do/can contribute to retirement but the lower 50% will still be f**k.

Other Provisions - have no idea what they are planning, but if they get rid of a bunch of useless tax credits that benefit very few, I'm good with it.

Death and Generation skipping taxes - bad, bad, bad as a social policy... I don't see how they can do this w/o removing the step up in basis on inheritance which means giant tax shift from the 1% to the lower classes (who currently get step up in basis and no estate tax because the exemption is 5.4mil).

Just to touch on the expensing of capital assets - we've defacto had that for quite some time (see section 179 deduction) for the vast majority of small business. - Excellent policy, though as tax rates decrease businesses are less likely to invest in capital.

For corporate reform, I'd rather see a dividend paid deduction combined with taxing dividends at regular tax rates to the recipients.


Since I'm buying a house soon I'd prefer to enjoy my deduction there.... :ymsmug: Get what I can while the rest of corporate america rips us all off.

On Section 179:

Section 179 does come with limits - there are caps to the total amount written off ($500,000 for 2017), and limits to the total amount of the equipment purchased ($2,000,000 in 2017). The deduction begins to phase out dollar-for-dollar after $2,000,000 is spent by a given business, so this makes it a true small and medium-sized business deduction.


I'm guessing these limits might be raised?


Just removing the limits for 5 years is my guess... really should be permanent though. Doesn't create any new deductions per se as it's just a timing of the deduction issue. From a tax collection perspective it's pretty nill over time.

As far as the mortgage interest deduction... it's really not that beneficial for the vast majority of americans excepting those that live in very high cost areas and the upper incomers.
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Re: Tax Reform

Postby Kane » Wed Sep 27, 2017 10:52 am

I'll take what I can get. :))

Per the deduction - couldn't this front load capital investment then spurring short to medium growth?
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Re: Tax Reform

Postby Winchester » Wed Sep 27, 2017 11:00 am

Kane wrote:I'll take what I can get. :))

Per the deduction - couldn't this front load capital investment then spurring short to medium growth?


IMO, minimal impact. Sure it makes the cost slightly cheaper because of the time value of the deduction (typically 7 years) but that's usually not enough on it's own to invest heavily into capital. People invest in capital because they need it and it makes financial sense to do so.

More than likely they won't need all that 100% write off anyway.
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Re: Tax Reform

Postby Kane » Wed Sep 27, 2017 11:38 am

Per your wishes Win,

https://www.bloomberg.com/news/articles ... retirement

Upper-middle-class taxpayers in particular could face a triple whammy. On the table are limits on—or even the elimination of—three of their favorite tax perks: deductions for mortgage interest and for state and local taxes and the ability to make pre-tax 401(k) retirement contributions.

These perks are popular with other taxpayers, too. Except for the very poor, Americans of all income levels can use 401(k)-style plans to lower their tax bills and save for retirement. The mortgage and local tax deductions are useful to the 30 percent of filers who itemize their tax returns. That includes 39 percent of filers earning $50,000 to $75,000 a year, 56 percent of those making $75,000 to $100,000, 77 percent earning $100,000 to $200,000, and 90 percent or more of those making $200,000-plus, Internal Revenue Service data show.

The wealthiest Americans, meanwhile, may have the most to gain from tax reform. The latest proposals include the elimination of the estate tax, which applies to estates of $5.49 million or more, and a cut in the top rate paid by rich individuals and business owners. It isn’t clear exactly how the plan would offset rate cuts with additional revenue.
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Re: Tax Reform

Postby Winchester » Wed Sep 27, 2017 12:32 pm

Kane wrote:Per your wishes Win,

https://www.bloomberg.com/news/articles ... retirement

Upper-middle-class taxpayers in particular could face a triple whammy. On the table are limits on—or even the elimination of—three of their favorite tax perks: deductions for mortgage interest and for state and local taxes and the ability to make pre-tax 401(k) retirement contributions.

These perks are popular with other taxpayers, too. Except for the very poor, Americans of all income levels can use 401(k)-style plans to lower their tax bills and save for retirement. The mortgage and local tax deductions are useful to the 30 percent of filers who itemize their tax returns. That includes 39 percent of filers earning $50,000 to $75,000 a year, 56 percent of those making $75,000 to $100,000, 77 percent earning $100,000 to $200,000, and 90 percent or more of those making $200,000-plus, Internal Revenue Service data show.

The wealthiest Americans, meanwhile, may have the most to gain from tax reform. The latest proposals include the elimination of the estate tax, which applies to estates of $5.49 million or more, and a cut in the top rate paid by rich individuals and business owners. It isn’t clear exactly how the plan would offset rate cuts with additional revenue.


Holy shit the forced rothification of 401(k)s would be f**k awesome. Peeps might whine now but be happy as hell when they retire. I'd gladly, gladly pay the extra tax now on my tax deferred retirement savings to get the tax free growth and tax free distributions later on.
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Re: Tax Reform

Postby John Galt » Wed Sep 27, 2017 1:12 pm

Winchester wrote:
Kane wrote:Per your wishes Win,

https://www.bloomberg.com/news/articles ... retirement

Upper-middle-class taxpayers in particular could face a triple whammy. On the table are limits on—or even the elimination of—three of their favorite tax perks: deductions for mortgage interest and for state and local taxes and the ability to make pre-tax 401(k) retirement contributions.

These perks are popular with other taxpayers, too. Except for the very poor, Americans of all income levels can use 401(k)-style plans to lower their tax bills and save for retirement. The mortgage and local tax deductions are useful to the 30 percent of filers who itemize their tax returns. That includes 39 percent of filers earning $50,000 to $75,000 a year, 56 percent of those making $75,000 to $100,000, 77 percent earning $100,000 to $200,000, and 90 percent or more of those making $200,000-plus, Internal Revenue Service data show.

The wealthiest Americans, meanwhile, may have the most to gain from tax reform. The latest proposals include the elimination of the estate tax, which applies to estates of $5.49 million or more, and a cut in the top rate paid by rich individuals and business owners. It isn’t clear exactly how the plan would offset rate cuts with additional revenue.


Holy shit the forced rothification of 401(k)s would be f**k awesome. Peeps might whine now but be happy as hell when they retire. I'd gladly, gladly pay the extra tax now on my tax deferred retirement savings to get the tax free growth and tax free distributions later on.


on the other hand people might save less because why have 100 dollars tomorrow when you can have 10 today; if you saved 10% of your income and that was now being taxed you'll likely not up your savings to compensate because you have a lifestyle to lead
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