Congress

Five Important Details from the GOP Tax Plan

Fewer income tax brackets, a bigger standard deduction, a lower corporate rate, and a new cap on mortgage deductions. But what about the deficit?

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KEVIN DIETSCH/UPI/Newscom

Republicans have been talking about reforming the tax code since well before the start of the year. Today we finally got a look at their proposal.

Here's five important details from the bill—with the important caveat that just about everything in it could be subject to change after it is introduced:

1. Fewer Income Tax Brackets

The current individual income tax system has seven brackets, with rates ranging from 10 percent to 39.6 percent. The highest bracket applies to income over $418,000 annually for individuals, or $470,000 annually for married couples.

In the GOP tax bill, those seven brackets would be collapsed to four brackets, with rates of 12 percent, 25 percent, 35 percent, and 39.6 percent. The highest rate would kick in at $500,000 for an individual or $1 million for a married couple filing jointly. Most people would see a small income tax reduction, though some people might end up paying a slightly higher rate depending on where they fall on the current spectrum.

But that's not the most important detail for individuals and families. The bigger news is…

2. A Much Higher Standard Deduction

Yes, the government is going to let you keep more of your own money. How generous, right?

Currently, individuals can claim a standard deduction of $6,350 and married couples get a deduction of $12,700. Under the House GOP plan, the standard deduction would rise to $12,000 for individual filers and $24,000 for married couples. That means more people will likely choose to take the standard deduction instead of itemizing their deductions, which Republicans say will simplify the tax filing process.

But does it really? About 70 percent of Americans already use the standard deduction, and high-income earners tend to be the only ones who itemize. A higher deduction is nice for everyone, of course, but it won't make much of a different in how most people put their taxes together.

3. No Changes for 401(k) Savings, But a New Cap on the Mortgage Deduction

As I wrote yesterday, there was a fair bit of speculation about whether the Republican tax plan would lower or eliminate the current deduction for retirement savings, which encourages people to, well, save for retirement. The bill released Thursday makes no changes to how 401(k) plans operate, so that deduction remains in place.

But another major deduction in the current tax code—the one that allows homeowners to subtract mortgage interest from their taxable income—would be altered. Republicans would cap the mortgage interest deduction at $500,000 for new home loans starting next year. That's something the construction industry will almost certainly lobby to change as the tax bill goes forward, but it would affect only about 5 percent of all homebuyers.

4. Corporate Income Tax Rate Cut From 35 Percent to 20 Percent

Maybe the most important part of the tax bill, politically, is the proposed cut to the corporate net income tax. The current rate of 35 percent would be reduced to 20 percent, something Speaker of the House Paul Ryan (R-Wisc.) said today will be essential to keeping America competitive in the global economy.

This has been the centerpiece of the Republican tax agenda since last year's election (and indeed longer). If there is one thing that unites the varied factions of the Republican Party, it's the notion that taxes on American businesses should be reduced. All the changes—mostly rather mild changes—to the individual income tax system are best understood as a way to sell this corporate income tax cut to voters.

But that doesn't mean that cutting the corporate tax rate is a bad idea. America has one of the highest corporate income tax rates in the world, and there is evidence that it hinders growth and encourages businesses to relocate overseas.

Cutting the corporate income tax rate "is an extremely important move," says Veronique de Rugy, a senior research fellow at the Mercatus Center (and a contributing editor here at Reason). But, she adds, "we still need to see how they will treat revenue earned overseas to assess the corporate plan fully."

5. Adding $1.5 Trillion to the Federal Deficit Over 10 Years

Cutting taxes is easy. Making those tax cuts without doing further damage to a federal budget that's already way out of whack is much, much harder.

The federal budget that passed Congress last month paved the way for tax reforms that could add up to $1.5 trillion to the national debt. As expected, the Republican tax plan will add about that much to the national tab over the next decade. The projections have to line up in order for the tax bill to clear the Senate without any Democratic votes—Republicans plan to use the reconcilliation process, which requires that legislation not add to the deficit beyond a 10-year window—and some deficit watchers are already warning that the tax plan might be worse than advertised.

"While it is encouraging to see the House move forward on tax reform, it seems each new vote and milestone is a step backwards for the cause of fiscal responsibility," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

If only Congress could find the cojones to cut spending.

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  1. I still don’t see why anyone making under $50k/yr pays a dime in income taxes.

    1. I still don’t see why anyone making over $0/yr pays a dime in income taxes.

      1. I still don’t see why anyone has to subsidize the lives of anyone else.

        1. Let’s just charge the federal spending out so everyone pays the same amount, around $13K per person. That’s the most fair, and will incentivize people to vote against federal spending.

          1. No it won’t. Warren Buffett managed to get a $9 billion benefit from the TARP bailout. ‘Taxes paid’ had fuckall to do with why congress voted for that. His and other billionaire TEOTWAWKI threats made that happen. A 13k tax cap for him merely means it will take 692,307 years for him to stop sucking on the public teat. Vs the current ‘fair’ system – where he pays about $2 million per year in taxes and it takes only about 4500 years for him to stop sucking on the public teat.

            IOW – you are massively encouraging him to take over even more of the govt for it to do his bidding.

            If ‘voting’ mattered, it would be illegal.

            1. So because the govt does corrupt things we need govt to do more things to counter their corruption?

              Or we could just eliminate bailouts too.

              1. Civil government, in so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all. – Adam Smith

                You ain’t gonna get rid of govt cuz the rich will put it right back in place the next day. You CAN reduce its scale and scope — and just as importantly make sure that the ACTUAL beneficiaries pay for it. And they ain’t who you think they are.

                Or you can stick your head up your ass and pretend that Ayn Rand was actually a philosopher and an economist rather than an overwrought bloviating fiction writer.

                1. Seems like your head is big enough to occupy any finite cavity. The “rich” (such a quantitative and definitive classification) are the only ones that actually pay for themselves (and most of the rest).

                  1. Really?

                    Medicare and Medicaid is not a subsidy to the sick but to doctors.
                    Sec8 housing is not a subsidy to the poor but to landlords
                    Ag payments is not a subsidy to farmers but to farmland owners
                    Student loans are not a subsidy to students but to tenured professors
                    All subsidies re debt are not a subsidy to borrowers but to bankers
                    And it goes on and on.

                    Those beneficiaries are damn good at disguising their snouts in the trough with rhetoric of compassion. But if you actually believe that rhetoric then that just means you’re stupid. If you know that rhetoric is just smokeblowing but you still persist in repeating it, then you are a sociopath.

                    1. So to summarize:

                      All wealth is theft (because of this anecdote about liberal hero Warren Buffet).

                      All welfare is theft (because it’s really secret kickbacks to skilled workers when the govt buys their services on the market).

                      Adam Smith was a great philosopher but not Ayn Rand (because Smith believed all poor people were immoral savages who would immediately eat the nearest rich person if they didn’t have guns to their heads at all times).

                    2. “Student loans are not a subsidy to students but to college administrators”

                      fixed

                2. “Those who have property”

                  How did they get it?

              2. Start there. Eliminate bailouts, wars for protecting “American interests” (let “American interests” pay for those wars), subsidies and all welfare. Medicare and SS can go too if the specific taxes for them are repealed as well

                The military is for defending the States, so fire 70-80 of the military personnel, shut down most of those bases, and be done.

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          2. I agree with CE. And no more corporate taxes or anything, a simple flat tax per person. Details about what kids pay and whatnot can be hashed out. Those who can’t pay can’t vote (at least not on matters of public spending, they can vote for other things).

          3. Let everyone vote on the federal budget, then.

        2. Because we have compassion for our fellow man. And to keep them from robbing, killing, and eating us.

      2. I agree that income taxes shouldn’t exist. I was just speaking in context of the current framework.

  2. Republicans would cap the mortgage interest deduction at $500,000 for new home loans starting next year.

    I hope this puts a little dent in house prices. I doubt it though.

    1. It might, but I doubt it is even top 10 in factors of housing costs.

      1. You’re right. While some people buying a home look at it thoroughly for investment purposes,most just look at it as “i’m buying my own home instead of throwing my money down a hole on rent” and leave it at that.

      2. You might be right about the mortgage deduction not being a large factor in home prices, but I suspect that if you add the mortgage deduction with the $500,000 per couple capital gain exclusion on homes held for more than 2 years there is a significant, non-market boost to home prices.

        Get rid of the mortgage deduction and the $500,000 exclusion. Both were put into place to help people become home owners but guess what, these giveaways had the opposite effect by artificially boosting the price of housing.

    2. It’ll put a huge dent in housing prices. Homeowners trying to sell will be thrilled I’m sure.

    3. House prices are dependent on the cost of labor and materials for new houses more than anything. If you’ve bought any construction materials at all in the past few years you will have noticed the inflation.

  3. 5. ADDING $1.5 TRILLION TO THE FEDERAL DEFICIT OVER 10 YEARS
    Cutting taxes is easy. Making those tax cuts without doing further damage to a federal budget that’s already way out of whack is much, much harder.

    The federal budget that passed Congress last month paved the way for tax reforms that could add up to $1.5 trillion to the national debt. As expected, the Republican tax plan will add about that much to the national tab over the next decade. The projections have to line up in order for the tax bill to clear the Senate without any Democratic votes?Republicans plan to use the reconcilliation process, which requires that legislation not add to the deficit beyond a 10-year window?and some deficit watchers are already warning that the tax plan might be worse than advertised.

    Well, my goodness, if only there was a thing that could also be cut so that lower taxes wouldn’t add to the deficit!

    1. Start by not increasing defense spending by 10%.

  4. But does it really?

    Yes, it does

  5. They could cut spending by not spending $1.5 trillion on tax cuts. Literally just sitting on their asses doing nothing, which they’re pretty good at!

    1. Of course a piece of shit like he would say something like that. Except the government has no money of its own. Only what they steal from the rest of us. They just need to cut entitlement spending

      1. Oh so the only morally permissible form of society is anarchy. Well, conversation over!

        1. Which set of morals are the universal ones? Let me guess; yours?

          1. None. We muddle along.

        2. I’m always so curious, do you think you could define your moral or philosophical framework? What axioms do you take? What beliefs do you have?

          1. Tony believes in whatever he feels. That is all you really need to know about Tony. He is as vapid as they come.

          2. Societies should aim to maximize well-being for humans.

            1. Why is that? And how to we express this?

              1. Why is a good question, and there is no definite answer. I’ll settle with, because that’s what we invented societies for in the first place. We could all commit mass suicide, but where’s the fun in that?

                Are you asking how do we define well-being? Another good question but not as hard as some here would make it. People generally all need the same things, so society should work to provide those things from the most basic (water, shelter) to, if it can afford it, secondary needs or even wants (the ability to make money). Oddly enough libertarians skip over the basic needs yet insist that society be organized for the latter.


                1. Oddly enough libertarians skip over the basic needs yet insist that society be organized for the latter.

                  False.

                2. Do you believe that you are reactionary? I’ve noticed that both of your definitions for why something is right is purely that it has been done that way before. If not, when is change permissible to you and why?

                  Second, what is your definition of need? Further, you make a distinction between wants and needs and you believe there is an apparent moral impetus to give those to everyone. To the point that you believe authority should have power to force these actions. What is the distinction between wants and needs and why is that a valid concern of someone?

                  Third, you divide the ability to “needs”, as you put it, and the ability to make money. What is money to you?

                  1. Change should be done when a policy isn’t maximizing human well-being. Needs are water, food, shelter, sanitation, security, rule of law, etc. Things you can list for yourself. The wealthier and more advanced a society becomes, the more people are entitled to expand their list of basic needs to things like education and healthcare. You tell me why not. I’m not especially interested in what counts as a need or a want.

                    Among these things that society, via government, should provide is a marketplace in which people are able to participate freely and at least have a good shot at prospering above and beyond what needs are already being met. In fact one primary reason we should address everyone’s basic needs and add in education and healthcare is because it makes people freer. More able to participate in markets and prosper. It’s not just because it’s good for individuals as if it were charity, but because it increases aggregate prosperity.

                    1. “Change should be done when a policy isn’t maximizing human well-being. Needs are water, food, shelter, sanitation, security, rule of law, etc. ”

                      I think I’m pretty much on board with what you’re saying, but “etc” is a hard one for me to grasp. The devil is in the details, and I bet “etc” has a lot of devil in it.

                    2. That’s what politics is for!

                3. Tony|11.2.17 @ 5:03PM|#
                  “Why is a good question, and there is no definite answer. I’ll settle with, because that’s what we invented societies for in the first place. We could all commit mass suicide, but where’s the fun in that?”

                  Note that Tony has no answer to why governments should do what Tony thinks they should, but the alternative is mass suicide.
                  Tony, do you understand why you are held in such contempt around here?

                4. The “ability to make money” (in other words, property rights) is a prerequisite to wealth creation, that wealth will first go to providing basic needs. Take that away, and people will not be able to provide for their basic needs. The state does a shitty job at providing these – see public housing projects.

                  Taxation is a soft violation of property rights and impairs the well-being of humans in that society, regardless of services rendered by the revenue.

                5. Sorry, Tony. Even “basic” needs are different for everyone. Why not just let us all keep our money and buy/barter for whatever it is that we need and help those who can’t. I don’t see what’s morally reprehensible about that.

                  1. Because poverty is a real thing and it will be the natural state of most people without some amount of redistributive policy.

                    This comes back to the old, devastating critique of libertarianism: that you would permit a government that protects the luxuries of the rich while ignoring the basic needs of the poor.

                    Even someone with soft moral convictions like me can see how fucked up that is.

                    1. Are mutualists, for example, not “libertarian”? Granted, they’re not Reason.com-libertarian, but to say that libertarianism fails to account for these factors is too simplistic. Maybe rewrite your sentence to be “individualists” and not “libertarians” and it might be correct.


                    2. Because poverty is a real thing and it will be the natural state of most people without some amount of redistributive policy.

                      This isn’t actually true, you just believe it’s true right this second because you need it to be true.

                      Poverty is a descriptor of a lack of things, so in a society without things how could one be ‘poor’. It’s a state of being that requires it’s opposite to even be described. Notably, getting rid of ‘things’ or ‘inequality’ won’t make people less poor It just makes them less aware of where they could be.

                      You don’t want to change society, you want to change the nature of man. You’ll never understand why that’s impossible, even after so many millions have been killed by your kind directly and indirectly.

                      How strange that socialist empires have starved more people to death than we have, eh? I’m sure that is very confusing to you, although I also know you probably already have an emotional retort without substance ready to rationalize your opinion.

                    3. that you would permit a government that protects the luxuries of the rich while ignoring the basic needs of the poor.

                      Wrong again. The government would also protect the property rights of the poor, without that protection they would not be able to escape poverty. Countries that make it a policy to violate property rights, like Venezuela, are the countries that see people starving in the streets.

                      poverty is a real thing and it will be the natural state of most people without some amount of redistributive policy.

                      This is really dumb. You must think most people are crippled, retarded, or otherwise unable to provide for themselves. Maybe you’re projecting your own insecurities onto the population. For the rest of us, the only way to permanently escape poverty is the right to keep the fruit of their labor. Whenever your solution is tried, redistribution, those in poverty remain in poverty barely subsisting. Real world results don’t conform to your wishful thinking.

                    4. Being poor, especially the kind of poor we get without a social safety net, is very much crippling to people’s ability to get ahead. If it’s bad enough, it simply can’t be done.

                      So, since you brought it up, do you favor a social safety net for the crippled and retarded? Or do we just stay consistent and have someone throw them to the vultures and rodents?

                    5. This comes back to the old, devastating critique of libertarianism: that you would permit a government that protects the luxuries of the rich while ignoring the basic needs of the poor.

                      Show me where this is a hallmark of the libertarian philosophy.

                    6. You guys could have saved a lot of time and read my post at the beginning of this chain.

                    7. “Maximize human well-being”. What does this mean? How can you possibly define it without running into the usual definition problems associated with utilitarianism?

                    8. That’s utilitarianism. Covered in depth in any Ethics 101 class. (unless they’ve gone of the SJW deep end these days too…)

                      Suppose you can save the lives of two people by murdering one person and distributing their organs. Total well-being has increased. A good thing Tony?

                    9. The trouble with Tony’s solution for providing for the needy is that it gives a carte blanche to a bunch of aggressive usurpers to take over society using that emotional appeal, and to enrich themselves by harnessing society’s productivity.

                    10. There is no denying that the “poor” in America have a better standard of living than the vast majority of “poor” in every other country on Earth.

                      Humans all around the world demonstrate how little is truly required to survive.

                      How about food stamps buy only rice, dried beans, and multi-vitamins? No one will starve or get scurvy, but foodstamps will not be a subsidy to people’s “lifestyles” or grocery stores. I figure Tony will say that’s not maximizing the good of society?

                6. So from each according to his abilities, to each according to his needs? Is that about it?

            2. That’s far too generic of a statement and it completely ignores the entire history of human of any society bigger than a small village. Humans have some altruistic characteristics, but when resources get scarce they get greedy, and most resources these days are scarce.

            3. I suspect part of the disconnect will lie in the definition of “what they need”. Humans all around the world demonstrate how little is truly required to survive. This might be one definition of “what they need”, but is probably not close to what progressive liberals mean when they say the words “what they need”, which apparently has come to mean “providing means for everyone to live a U.S. standard lower middle class lifestyle without any further requirements or responsibility on the recipients’ part”, i.e., an air-conditioned home or apartment with an assortment of electronic gadgets, cable TV, broadband internet, free cell phone, free food, reduced electric bill, reduced gas bill, a car and oh yeah, toss in some walking-around money.

        3. Perhaps a government that cannot exist except by blade and bludgeon isn’t a moral government.

    2. We already know you give zero shits about deficits and you believe that spending can only go in one direction; up.

      1. Well the opposition party holds office so now it’s a thing.

        1. Yeah, clearly. Narry a peep out of him after Bush or before Trump, as if the deficit and unfunded liabilities magically jumped orders of magnitude all on their own.

          1. You may not be aware that I’m not actually a deficit hawk, at least not at all times in all circumstances. That would be you guys and Republicans, who are thus opening themselves up to being big fat hypocrites.

            1. You are the opposite of a deficit hawk, you are a person who actively believes that every American’s savings should be devalued as a willful course of action. Out of those two options, I’d say yours is the most evil.

            2. If you’re talking about deficits and not talking about Social Security and Medicare, you’re not a deficit hawk.

              1. I misread the double (triple?) negative. The point stands. The only numbers that really matter are Medicare and Social Security (a distant second).

                1. Every liberal healthcare reform plan has reducing costs as a primary goal. Can we try one?

                  Now I don’t mean that government spending/GDP will necessarily go down, because it probably won’t as we universalize access, but the actual economic burden to humans will. Again, that’s the entire point of reform.

                  1. Do you then agree that you contradicted your comment a few posts down?

                    Tony|11.2.17 @ 4:21PM|#|?|filternamelinkcustom

                    Defense isn’t exactly a drop in the bucket. But we could have savings on social welfare programs if you assholes would let us reform healthcare in ways that bring costs down.

                    In this you admit that a purpose of the health care reform is to bring savings on social welfare programs.


                    1. In this you admit that a purpose of the health care reform is to bring savings on social welfare programs.

                      Hell, in a few thousand years he might even realize that they do the opposite and begin opposing social welfare programs.

                      It’s cracks like these that make me suspect him of Expert Level Sock Puppetry.

                    2. Yes apart from literally all the evidence in the world your assertion would be right.

                  2. Tony|11.2.17 @ 4:54PM|#
                    “Every liberal healthcare reform plan has reducing costs as a primary goal.”
                    Bullshit.

                    “Can we try one?”
                    We’ve been suffering though the experiment for several years now.


                    1. Every liberal healthcare reform plan has reducing costs as a primary goal. Can we try one?

                      As soon as one of those proposals doesn’t consider spending less money as spending more money, but less than they would like, perhaps.

                      Considering that the ACA has done literally the opposite of their stated intent, it’s amazing you would trust their continued efforts when they misunderstood the situation so fundamentally. That also pretends this is the first time they stuck their dick into healthcare, and lets be clear; it isn’t and their efforts have failed every time. Their idea’s have only made healthcare more expensive. Oops.

                      Einstein would consider that crazy.

    3. Is there literally nothing in the federal budget that you would agree can be cut?

      I think that you could easily cut 25% right off the top, and that would maybe, just maybe, begin to touch the amount of waste and fraud that must run rampant throughout DC and its bureaucracies.

      Of course, they would still engage in waste and fraud, so that cut wouldn’t address the systemic problems, but it would certainly get a bunch of moocher’s attention.

      1. The biggest problem is that a tremendous proportion of it all is transfer payments, and my guess is those are a target no one can even mention without facing career ending levels of criticism.

        1. Correct. 69% of Federal Spending is for Social Services.

          http://mil14.com

          I don’t see how we will ever back out of that. Ingeniously, the only way a young person can depend on “getting their checks” when they reach their 60s is to conform to the obligation to pay now to the older generation. This is reinforced by the law that compels paying in — no opt-out.

          One generation is indentured to another. Simply by being born.

          1. John Donohue said: “One generation is indentured to another. Simply by being born.”

            “We may consider each generation as a distinct nation, with a right, by the will of its majority, to bind themselves, but none to bind the succeeding generation, more than the inhabitants of another country.” Thomas Jefferson

            1. Well, Jefferson was an idiot for saying that. If you can’t bind posterity (see Mason below) then you can’t bind the citizens of the current generation either. Is it freedom or not?

              George Mason wrote the following, and it was ratified in VA months before Jefferson drafted his Declaration. He should have paid attention, kept God out of it, and included “you can’t bind one person to another.”

              “… all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.”

              George Mason, The Virginia Declaration of Rights

      2. Plenty of things. Defense most of all. Industry subsidies that exist for no social purpose.

        1. Defense is a drop in the bucket compared to entitlements. Fact.

          Industry subsidies that exist for no social purpose.

          I forgot, you’re a retard.

          1. Defense isn’t exactly a drop in the bucket. But we could have savings on social welfare programs if you assholes would let us reform healthcare in ways that bring costs down.


            1. Defense isn’t exactly a drop in the bucket

              So you agree that social welfare is indeed a bigger piece of the pie, excellent. Too bad you immediately temper that accidental truth with more retardation.

              we could have savings on social welfare programs if you assholes would let us reform healthcare in ways that bring costs down.

              Absolutely and unequivocally false by any possible stretch of the imagination. At the absolute best you shift costs around while increasing them.

            2. “”let us reform healthcare in ways that bring costs down.””

              Wasn’t that the purpose of the Affordable Healthcare Act?

              1. And it worked to the extent it was allowed to.


                1. And it worked to the extent it was allowed to.

                  It did the exact opposite. Premiums have increased by two-to-three digits depending where you want to measure. That is the opposite of a premium decrease. It’s not even slowing the rate of increase, either.

                  1. It did slow the rate of increase relative to where it was predicted to be without it.

                    1. That is in no way confirmation bias.

            3. “”Defense isn’t exactly a drop in the bucket.”‘

              Not by any standard. But to reduce it we would need to reduce our military profile around the world, which may mean having to back out of promises we’ve made to be the defenders of the free world.

              1. But to reduce it we would need to reduce our military profile around the world, which may mean having to back out of promises we’ve made to be the defenders of the free world.

                I wonder if that’s even necessarily true. The DoD isn’t exactly operating at peak efficiency. Unless we assume it literally cannot be any less corrupt or bureaucratic there is probably many ways to reduce without any loss of efficacy.

                1. “”Unless we assume it literally cannot be any less corrupt or bureaucratic there is probably many ways to reduce without any loss of efficacy.””

                  By it’s nature it’s bureaucratic. I’m not sure how much more you could downsize it. Corrupt? Some, but I don’t think it would make a big enough savings.

                  I think any significant savings would require less 100 million dollar aircraft, and 800 million dollar ships. Not that I’m advocating for that.

                2. Eliminate about 1,000 General grade positions to begin with.

                  1. Eliminate about 1,000 General grade positions to begin with.

                    There are currently 500,000 federal employees who earn more than 100k/year – and 50 czars.

                    Anyone who can’t find 500 people to fire every single day just isn’t looking very hard.

              2. When it comes to pensions you folk don’t have any problem breaking promises.

                1. Those people had no right to elect someone and then negotiate with them about sweet benefits and retirement packages. The government had not right to make those promises in the first place.

                2. Pensions are inherently not something that can be done unless people keep working until just before they die. Retiring at 65 and collecting a pension until you’re 85 simply can not be maintained. It’s a promise that is designed to be broken.

                  1. Retiring at 65 means more than 45 years to accumulate savings.
                    Putting away $200/month at what used to be a reasonable bank interest rate of 6% would have gotten you more than $550,000 over that 45 years.
                    If that 6% was paid out, after the balance was accumulated, one could have realized $33,000 annually, for as long as one lived, without touching the principle.
                    What has fucked up retirement plans is this stupid 0% interest rate for borrowers, that leaves the other end – the saver’s interest paid out – as less than zero.
                    Just putting your money into a savings account is costing more than if you stuffed your mattress with it.
                    The only investments that pay out are the more risky ones, like “securities”, which are far from secure.

              3. may mean having to back out of promises we’ve made to be the defenders of the free world.

                Oh well, those are promises we can’t afford to keep.

            4. And yet you were raising holy hell when Trump and Tillerson were posturing to NATO about the other members ponying up their fair share.

              Which is it Tony, do we need to be the motherfucking world police or don’t we?

            5. let us reform healthcare in ways that bring costs down

              The last thing Tony wants is for those icky libertarians to start imposing deregulation and fewer subsidies on the industry, bringing it back to the way it once was, when health care was affordable for the masses. No, he wants more technocratic and redistributive solutions because Obamacare didn’t go far enough in doubling the cost of insurance.

            6. Defense = 14% of federal spending.

          2. “Defense is a drop in the bucket compared to entitlements. Fact.”

            Are you just exaggerating here or do you really mean that?

          3. Defense is a drop in the bucket compared to entitlements. Fact.

            I wouldn’t say “drop in the bucket.”

            FY17 DOD Budget was $582.7 billion (not counting all the hidden spending, of course)
            You can tack on the budget for nukes and intelligence agencies and that’ll get you another $100 billion or so.

            FY17 Medicare expenditures was $709 billion

            FY17 Social Security spending was over $1 trillion

            So, not really a drop in the bucket, more like it’s the little brother.

            1. If nukes and intelligence agencies are not in the Defense budget, what category are they in?

            2. If Social Security has paid out more than it has taken in, over its lifetime, it would be bankrupt.
              We are told it is not.
              Thus, what you call Social Security “spending”, if it is from the general fund, it must be repayment of moneys borrowed from the total contributed.
              If I have a retirement fund and I borrow some of it to go to Tahiti. When I replenish that money, it is not contributing to my retirement fund, but a delayed payment for my trip.
              What we are told is Social Security “spending” that comes from the general fund is not money going to Social Security, but repayment for money spent elsewhere. It just sounds better when they call it Social Security spending.
              We are being lied to, constantly, and most people don’t get it.

            3. Medicare and Social Security…which funds do they come out of?

      3. I think that you could easily cut 25% right off the top […]

        Yeah, you and every other armchair analyst.

        The reality, which includes getting *votes*, is not so “easy”.

        You are, of course, free to prove me wrong: run for office, get elected, propose your “easy” cut, muster the votes to get it passed, and see the changes made into law.

        1. Don’t be such a wet blanket.

        2. Yeah, bud, I’m saying that implementing a 25% fed gov budget cut is easy. /sarc

          No, my point is that there is easily at least 25% of the fed gov budget that is pissed down a rabbit hole via waste and fraud.

          The fact that it is not easy in reality is obvious to everyone, including you EE. Congrats.

          1. I don’t think it is as high as 25% but the argument is that, whatever it is, it would cost more to ferret it out than would be saved. So, they just count it as the cost of doing things on such a large scale.
            Which is why government functions should be done on a more local basis.
            The smaller the program, the easier it is to control the waste, fraud and abuse.
            Unfortunately, the bigger the program, the easier it is to justify its efficacy for the number of people it benefits.
            A program that helps only a couple of hundred people is much easier to eliminate than one for which millions enjoy the benefits.
            It’s all part of the federal government’s scheme to have and keep control.

    4. Tony|11.2.17 @ 3:53PM|#
      “They could cut spending by not spending $1.5 trillion on tax cuts.”

      Hey, how abvout 100% of Tony’s income goes to taxes? I mean, he didn’t earn that, right?
      Fuck off, slaver.

      1. It takes a village, so he owes the village. Or perhaps it was just slave labor.

        1. Well, he *does* already contribute to the village by being the resident idiot. That’s not nothing.

    5. Tony’s days of being a vapid, utterly unserious person are certainly coming to a middle.

    6. spending $1.5 trillion on tax cuts

      That’s…not how it works.

      1. What, addition and subtraction?

        1. You know that everyone is arguing against your statement that decreasing taxing is equivalent to spending. Don’t be asinine.

          Besides you know it’s stupid. If you took a pay cut at your job your wouldn’t go “Damn, my spending has gone way up this month!”

          1. But that’s just semantics. Many of the things we’re talking about are officially called tax expenditures. The deficit doesn’t care what you call it.

        2. In Tony’s world, by not robbing him, we’re all actually giving him money. And yet he doesn’t even have the courtesy to refrain from being an asshole about it.

          1. Tony|9.7.17 @ 4:43PM|#
            “I don’t consider taxing and redistribution to be either forced or charity.”

            Tony’s not real bright.

            1. Taxation isn’t forced. Just ask Wesley Snipes

          2. That analogy doesn’t work because taxation isn’t theft. It’s the price you pay for all the public services you avail yourself of every single day you take a breath on earth.

            1. Only a tiny portion goes to services, the rest is redistributed.

              1. Redistributive programs are services. Everyone is to some extent free from having to scrounge for money and go into poverty in order to take care of an unexpectedly long-lived grandmother, for example. They’re free from the social consequences of real poverty when people are given a safety net.

                1. In the same vein someone mugging me is availing himself of a social service. But you really have no moral qualms about theft.

    7. Don’t worry, it probably won’t pass. They gored too many oxen.

  6. I don’t see anything that’s bad. How is this gonna get spun against Trump?

    1. That debt thing isn’t very attractive…

      1. Nah, nobody cares about that except libertarians, and how many of those are there? None.

        1. Anyway, don’t “we owe it to ourselves”?

        2. Pretty sure this is one of those topics where libertarians and Republicans are identical: only care about deficits when there’s a Democrat in office, and increased deficits paired with tax cuts are just fine.

          1. Pretty sure you only care when a Republican’s in office.

      2. The debt went up by $11T over the last ten years.
        If it only goes up by $1.5T over the next ten, then its kinda, a bargain.

      3. Hauser’s law: Hauser’s law is the proposition that, in the United States, federal tax revenues since World War II have always been approximately equal to 19.5% of GDP, regardless of wide fluctuations in the marginal tax rate.

        Block Insane Yomomma raised the top marginal tax rate and the debt still went up $9 trillion during his presidency. The debt is entirely a function of spending, and economic growth as it relates to GDP.

    2. I don’t know. Maybe that crazy plan to cut the tax rates for pass-through entities that has no logical or economic justification, but seems tailor made to cut the taxes of someone that just happens to make almost all of his money through pass-through entities?

    3. Standard response is that it only helps the wealthy. The wealthy being defined as those who pay taxes. It’s a self-fulfilling ploy that tax cuts can only help those who pay taxes.

      1. Don’t only wealthy people own houses? Seriously, if you’ve bought a house worth more than $500k, you are obviously fucking wealthy and Tony should be sucking the dick of every republican that supports this plan.

        1. In my county, the average home price is >$1M.
          A $500,000 house is middle class, here, if you can find one for that.

    4. Taxes go up for the upper middle class. No itemizing, plus the bonus higher bracket (33 to 35 percent between 260K and 417K for MFJ).

      1. Surely the Pease hidden taxes will be gone from this tax proposal. It is as opaque and deceptive as the AMT. Basically between 310-450K income they add 3% to the nominal tax rate.

        Yay for simplicity.

  7. On an unrelated note……….

    https://tinyurl.com/ya739owz

    “Policymakers and planners need to enact specific environmental and land-use regulations to control cannabis crop expansion,” environmental studies professor Jake Brenner said in the college’s press release.”

    Yeah, those policy makers and central planners sure make everything better.

  8. 6) You’ll submit your return on a postcard, right? RIGHT?!

    1. Not if is has a social security number on it!!

      Maybe the new form will be this:
      1. This year’s income
      2. Taxes withheld
      3. Subtract 2 from 1
      4. Balance due, please remit.

      1. How about if the IRS notifies you of what they think you owe, and if you think you should pay less *then* you submit a return?

        1. Such a plan would make thousands of people more comfortable with the tax system, regardless of rules and rates. I’d like to see itemizing (and all the social engineering within) disappear from the system.

  9. Anyone else annoyed by people using debt and deficit interchangeably, and talking about the “cost” of something over a completely arbitrary time period? Are these cuts set to expire after 10 years or something?

    1. arbitrary time period

      Well, people can relate to “10 years”, unlike “$1.5 trillion”.

    2. They always use 10 years because in any ten year window, the legislature will rewrite it anyway.
      Easier to make up the numbers that way.

      1. Also makes the number look yuuuge.
        Move the decimal point and you get $150 billion a year. Nobody shits their pants over billions anymore.

        1. That’s a good point. They seriously can’t find 150BB between defense and underwater basket weaving, etc.?

  10. “it seems each new vote and milestone is a step backwards for the cause of fiscal responsibility.”

    Perhaps Congress is counting on the next civil war reset the debt *and* the economy!

  11. Republicans would cap the mortgage interest deduction at $500,000 for new home loans starting next year.

    I suspect that is some kind of ‘misspeaking’. How big would the mortgage have to be if the INTEREST DEDUCTION is $500.000.00???

    Maybe it is for a MORTGAGE of $500,000.00 or more?

    Doesn’t matter, all this will change as soon as the full house and senate get their orders from the lobbyists.
    The entertaining part will be watching the democrats figure out how to attack a plan that ‘taxes the rich’.

    1. I was thrown by that as well. Your interpretation is the only thing I can imagine. You’d need a ~$17 million mortgage to have $500,000 annual interest (at a 3% rate).

      1. This is clearly a tax aimed at San Francisco.

        1. Though what it actually may be is aimed at loans for project owners. For instance, the owner of an apartment complex or something. Though that seems like that would be well below 5% and I don’t know if that legally counts as a mortgage anymore.

          1. Interest on a mortgage for an income property like apartments is a deductible business expense. They had me worried there for a sec when it talked about eliminating business deductions for interest, but that is for C corps.

            1. Then that was the only case that I could think up for 500,000 dollar a year mortgage interest.

        2. Maybe it’ll force the morons on the city council to reconsider their absolutely devastating zoning laws. Nah.

          1. Haha. No, no, no. There’s not a lot of reason going into anything in San Francisco.

          2. DJK|11.2.17 @ 4:20PM|#
            “Maybe it’ll force the morons on the city council to reconsider their absolutely devastating zoning laws. Nah.”

            The zoning laws and the requirement for union-rate labor are the result of ‘district elections’; 100 votes can get you on the gravy train or mean you have to work for a living instead.
            No way is one of the supervisors going to suggest that the unions shouldn’t hold housing costs hostage or tell their neighbors they’re all for a 10-unit building right down the block.

        3. I own a place in San Francisco, but I laughed when I saw the map of counties that would be most affected. Good thing my mortgage is old enough that it’s close to being below $500,000.

    2. “The entertaining part will be watching the democrats figure out how to attack a plan that ‘taxes the rich’.”

      Well, it also taxes the poor in CA.

      1. Tell me, how does a rich state like California, safely controlled by the Democrats, have any poor folks? Don’t the California Democrats care about the poor?

        1. They care about them so much, they make sure there are plenty around.

      2. The rich get a tax holiday. If you make 471K to 1M, your top rate drops from 39.6 to 35 pct, plus you get lower taxes for your business, plus you can pass through business income down at a 25 pct rate.

        If you make 260K to 417K and used to itemize and live in a high tax state with high housing prices, you get screwed with lower deductions and a higher rate.

        Numbers are for MFJ.

  12. A higher deduction is nice for everyone, of course, but it won’t make much of a different in how most people put their taxes together.

    The link you put shows 44 million filings use itemized deductions. I can’t know how many would switch from that given the higher deduction, but it could very well simplify for millions of people. The point in general is that you can’t just say “most people aren’t affected” when we’re talking about such a large population.

    1. But another major deduction in the current tax code?the one that allows homeowners to subtract mortgage interest from their taxable income?would be altered. Republicans would cap the mortgage interest deduction at $500,000 for new home loans starting next year.

      They should allow deductions for rent then. I don’t understand why this is considered valid other than as a subsidy to homeowning schmucks such as myself.

      1. If only Congress could find the cojones to cut spending.

        Agreed. I wonder if we would have austerity riots like they do in France whenever any cuts are mentioned.


        1. Agreed. I wonder if we would have austerity riots like they do in France whenever any cuts are mentioned.

          Sadly, this isn’t something I doubt. We would indeed have riots if the government honestly cut spending by a meaningful amount. I would furthermore wager that those protests would look a lot like the L.A. Riots.

          1. The anger towards even small deregulation did a lot to disappoint me there as well.

            1. I would dare say I found the anger towards even minor deregulation illustrative of how far down the rabbit hole we really are as a society. It’s hard to divorce the anger towards Trump personally with anger towards his policies though, so it’s possible it’s a more personal grievance for a lot of people rather than a real ideology.

      2. Thou know “double taxation”, where you get taxed on the same income twice? The main argument against capital gains tax stuff?

        Giving a deduction for rent would basically be the opposite of that, where the same property can get two deductions, first on the rent paid, then again on the mortgage interest.

        That said, the lesser cost of the mortgage because of the deduction *could* be passed on to renters in the form of lower rent, in the same way some folks argue that if we taxed businesses less tthey would increase wages.

    2. It doesn’t simplify it for me, as I just bought a house and was planning on itemizing, but now I don’t know if I need to or not. So I’ll have to itemize and then let Turbotax tell me whether that was a stupid thing to do.

      1. And this is why I said “I can’t know how many would switch…”

        I do assume that you choose whichever plan makes you pay more taxes though. Anything less is theft from the state.

        1. Not paying taxes owed would be theft from the state (the state in this context being “the people”). Surely you don’t endorse stealing from all the people. I for one would feel pretty bad about myself if I stole Granny’s old-age care so I could afford a faster yacht.

          1. And your bold stance is why I’m asking that you don’t pay more to the government than the minimum. Your withholding is theft under your own definition.

            1. Only if I’m not paying what I owe. Obviously I’m going to try to minimize my taxes owed as much as legally possible, just like anyone else. But I understand the difference between being a person and being a government that makes policy.

              1. But you are taking money that would otherwise pay for “Granny’s old-age care.” You’re saying you don’t owe it, but under the system you admit that is arbitrarily defined by the government. So your argument is it’s theft if you don’t pay what an authority figure said you should?

                Do you believe it’s theft to move from a state with higher taxes to a lower tax state to avoid the cost?

                1. Theft is actually and only “what some authority figure” says it is. Same with ownership. They kind of go together in that way.

                  1. First, you didn’t answer my second question.

                    Second, does this mean that you only file your taxes in such a way that goes with the spirit of the law? That is, if there is a tax reduction that applies to you, but you can see you weren’t exactly the intended recipient for it, would you take it? Or does this violate the will of the authority figure? Because at that point you are not acting in accordance with them, but merely capitalizing on their errors.

                    Finally, do you believe that theft is wrong?

                    1. Taxes I’d say are very much a “letter of the law” thing. I have never and would never claim that as a liberal I’m any less self-interested than you. That would be sanctimony. I’m just smarter.

                      “Is theft wrong?” is either a deep question worthy of Victor Hugo or a boring semantic exercise. Define theft. I prefer to keep it simple and go with “whatever the law says it is.” Not that the law always gets things right.

                    2. Alright, once again.

                      Do you believe it’s theft to move from a state with higher taxes to a lower tax state to avoid the cost?

                      Second, all you did was move the question. So now I ask, do you believe that following the law is moral? You can expand on my question to answer it if you think it is too vague, but you used the term theft first. You said not paying what the government deems to be proper taxes to be theft. You also said that letting the government reduce taxation is theft. This means even when the law doesn’t say it is theft you still believe it to possibly be theft. This contradicts your previous statement. Please clarify your definition and your reasoning.

                    3. Do you believe it’s theft to move from a state with higher taxes to a lower tax state to avoid the cost?

                      No, but I haven’t made the claim that it’s theft to minimize one’s tax burden. I am making the claim that it’s theft not to pay taxes you owe. (Theft from the treasury, and by extension your fellow citizens.) If I said that government reducing taxes is theft, then I didn’t mean to. I did say that its essentially equivalent to spending, though.

                      do you believe that following the law is moral?

                      I don’t think morality has much to do with it, except incidentally. It’s probably a good idea, though.

                    4. No, but I haven’t made the claim that it’s theft to minimize one’s tax burden. I am making the claim that it’s theft not to pay taxes you owe

                      You have defined “taxes you owe” to be whatever someone in authority deems it to be. You have defined not paying those as theft. If the authority is the source of defining what you owe, then any attempt to lower your tax burden not in the spirit of the law is theft by definition? Do you agree?

                      I don’t think morality has much to do with it, except incidentally. It’s probably a good idea, though.

                      Incidentally, how? If it’s a good idea, for what reason is it good? You have a tendency to shrink into a corner and give increasingly vague answers whenever anyone questions you about your beliefs. I am asking you truthfully what you believe, because I read your posts often and I want to understand your reasoning. So, please be honest.

                    5. If the authority is the source of defining what you owe, then any attempt to lower your tax burden not in the spirit of the law is theft by definition? Do you agree?

                      No, because tax law doesn’t have a spirit. If government doesn’t want me to take a deduction, it shouldn’t have put the deduction in the law.

                      Incidentally, how? If it’s a good idea, for what reason is it good? You have a tendency to shrink into a corner and give increasingly vague answers whenever anyone questions you about your beliefs.

                      That’s because I don’t believe terribly strongly in having beliefs. If you had to label my political philosophy, pragmatism comes close. Do what works. To what end? Maximizing human well-being. Defined as access to basic needs and the ability to prosper. Including individual freedom, by the way. In fact I think, and have explained many times, that I endorse far more real individual freedom than any libertarian, who define freedom extremely narrowly as freedom from government. (People whose primary concern is not gob government but something like disease, poverty, natural disaster–not on libertarianism’s radar at all, despite the relevance all of these things have to individual liberty.)

                    6. No, because tax law doesn’t have a spirit. If government doesn’t want me to take a deduction, it shouldn’t have put the deduction in the law.

                      I am talking about when a tax law is passed with a specific use case in mind and others use it for reasons not intended. In that way you are ignoring the will of the authority enacting it. You have defined disobeying those authorities in other tax situations to be theft. But you have also said that theft has no particular moral character. If that is fine, then I will accept that you use the word theft frequently as a criticism, but that you do not believe it only has meaning in regards to the law with no proper underlying reason for it.

                      Maximizing human well-being. Defined as access to basic needs and the ability to prosper.

                      What do you believe these things are, why they are valuable, and is there a way to define them at all?

                    7. That’s because I don’t believe terribly strongly in having beliefs.

                      Yet you come here every single day to argue about beliefs, you present yourself as such but there is some belief there. If you belief that you hold some entirely objective standards distinct from belief, that means you do not understand what you are saying.

                      Including individual freedom, by the way. In fact I think, and have explained many times, that I endorse far more real individual freedom than any libertarian, who define freedom extremely narrowly as freedom from government.

                      First, you often say “you’ve explained it many times”, but you always just say you’re being pragmatic, but that doesn’t mean anything as you still have to have things you believe have value. This does not fall naturally from any pragmaticism. In fact, it’s the same as anyone else as everyone else is just trying maximize things they consider important as well. So, we have to ask how you differ.

                    8. In fact I think, and have explained many times, that I endorse far more real individual freedom than any libertarian, who define freedom extremely narrowly as freedom from government. (People whose primary concern is not gob government but something like disease, poverty, natural disaster–not on libertarianism’s radar at all, despite the relevance all of these things have to individual liberty.)

                      Finally, this is all irrelevant to the conversation as you’re pushing it away from discussing your beliefs into making assertions about what other believes. Please stick to the topic.

                    9. Tony:

                      If you had to label my political philosophy, pragmatism comes close. Do what works

                      I have a similar philosophy. It’s called: “Question Begging Bullshit.”


              2. Not paying taxes owed would be theft from the state (the state in this context being “the people”). Surely you don’t endorse stealing from all the people. I for one would feel pretty bad about myself if I stole Granny’s old-age care so I could afford a faster yacht.\

                Obviously I’m going to try to minimize my taxes owed as much as legally possible, just like anyone else.

                Great, now I have whiplash.

          2. Would you feel better if you were stealing from the al qaeda weapons fund?

          3. Maybe you shouldn’t take any deductions then, fucker, seeing as how millions of Americans can’t afford to buy a house.

            1. How would that help them?

              1. Since all those people can’t afford to buy a house, and you just did, you are obviously rich.

                By your logic, when someone is rich and takes deductions to reduce their tax bill, they are being evil and depriving poor people of the services government provides. Therefore you, having established you’re rich, should pay as much in income taxes as you possibly can. It’s the only moral thing to do.

                1. It’s not my job to be the moral agent in this context. It’s government’s. If there is a moral problem with the state of taxes and redistribution, then it’s up to policymakers to fix or bear the moral condemnation. Any extra money I pay just goes to the treasury. It won’t increase the money paid out by social welfare programs. Only policy can do that.

                  1. So then, you do believe that if government expenditures do not line up with what you believe to be moral than not paying taxes is no longer theft?

                    1. Since I’m not god-emperor, my personal whims don’t get to be policy.

                  2. So then what does it matter how much Bill Gates or Donald Trump pay in taxes? You know, since them paying extra money just goes to the treasury and doesn’t actually change social welfare policy?

                    What’s that? By your own admission it doesn’t? And you still feel justified to rail against the “1%”?

                    I know I shouldn’t be shocked by your hypocrisy, but goddamn could you pick at least one thing to be consistent about besides “Democrats good.”?

                    1. If you do care about having a balanced or surplus budget, and I think sometimes we should, then their tax rates matter. Beyond that, I think it’s prudent for government to take an active interest in how much wealth is concentrated in the hands of a few, as that all by itself leads to negative social outcomes (such as a stagnant economy and undermining democracy itself–not that we have any experience with those sorts of things).

                    2. If you do care about having a balanced or surplus budget, and I think sometimes we should, then their tax rates matter.

                      Under what situations should it matter?

                      I think it’s prudent for government to take an active interest in how much wealth is concentrated in the hands of a few, as that all by itself leads to negative social outcomes

                      What is the definition of a negative social outcome? You gave two examples, exceptionally broad though the second one may be, but in general how do you grade a social outcome?

                    3. Broadly speaking you want government budgets to take on a surplus during a boom economy so that you can deficit spend during a recession in order to moderate the impact of the business cycle.

                    4. A bad social outcome is when people in large numbers see wages decrease, health worsen, life expectancy shorten, education attainment go down, etc.

                      I think these are fairly noncontroversial measures of human well-being, but libertarians like to discard those in favor of the notion that whatever a hypothetical laissez-faire market does is by definition the best possible outcome. Which is dumb.

                    5. Clearly, you people just can’t get it, due to your pointless obsessions with freedom and aggression.

                      You’re not supposed to want a world of volunteerism and mutual cooperation.

                      You’re supposed to figure out the best policies for human well-being, and then spend inordinate amounts of time impotently bitching to the world to go vote that way, having no meaningful influence whatsoever, and watching everything unfold more or less as it would if you never existed.

                      You people are such idiots.


      2. So I’ll have to itemize and then let Turbotax tell me whether that was a stupid thing to do.

        If that is honestly your plan, I can save you time and tell you it’s a stupid thing to do.

      3. You’d have to do that under the current rules too. There’s no good way to know whether itemizing is worth doing until you itemize. Or at least perform some mental math and approximate your itemizable deductions vs standard. You might just know that a large enough mortgage interest amount will create a deduction that is bugger than standard, but you’ve really just done what I said and did the internal math.

    3. “I can’t know how many would switch from that given the higher deduction”

      The people who would be likely to switch are single filers in the $50k – $75k income range, of which 41% currently itemize. This would mean about 5-10% of the US population might be persuaded to switch.

      1. Okay, then that gives us ~15-30 million people. There is some extra confusion because my 44 million number was the number of filings given in the link, not number of people.

        That said, my core point was in a large population the term “most” meaning a majority becomes less and less meaningful. It’s like when someone says this law only effects 10% of the population. That’s 33 million people. That’s a tremendous amount of people to just say they can be safely ignored.

      2. Everyone will switch because there won’t be any point in itemizing. The biggest items are mortgage interest (capped), state income tax (gone) and property tax (gone). This will be a tax hike for high income itemizers (but not if you make over $417K MFJ)

        1. I will probably continue to itemize because it’s usually a little more than $12k per year and I don’t mind the extra work to reduce my tax burden. I probably have higher than average unreimbursed work expenses and charitable donations, but I can’t believe that puts me in a very small minority.

          1. Looks like your unreimbursed work expenses will no longer be deductible. See section 1312 of the bill.

            1. …or my student loan interest, which also is used to lower my MAGI. This looks like a pretty significant tax increase for me, and I don’t even gross six figures most years. Thanks Trump. I’ll wait for the trickle to reach me.

  13. The higher standard deduction should make it easier to do a second round of tax reform in a couple of years, once more people start using it. If fewer people are using itemized deductions it will be easier to kill them off.

    1. I’m pretty sure most people don’t even know what the difference is.

      1. You find out pretty quickly once you start filing anything more complex than a 1040EZ. How old are you?

  14. Last year’s federal expenditure divided by this year’s adult population = your tax bill?

    1. “”Last year’s federal expenditure divided by this year’s adult population = your tax bill?””

      Yeah, but you have to add a surcharge that contributes to debt payment, interest and principle.

    2. Include the kids too. They cost all of us.

      $4.1 trillion divided by 320 million people = $12,800 per capita

    3. Bold plan. What happens to the people who can’t pay the $14,630?

      Keeping in mind that you roughly 13% of households don’t make that much in a year.

      1. Let them file for hardship. But if you don’t pay your federal taxes you don’t get to vote.

    4. Everyone paying equally is fair only if you assume that everyone benefits from the government equally.

      1. Way the fuck more fair than some paying zero while others pay half their income though isn’t it?

        Let them opt in/out of the govt services and hence decide for themselves.

        1. “Let them opt in/out of the govt services and hence decide for themselves.”

          Yes! Please! Where can they sign up?!? Poor people don’t want government. Government is a hindrance to their lives, reduces socioeconomic mobility by design, usurps their rights, and artificially increases costs. Most poor people are wealthier in a free market than under the democrat and republican parties’ yoke.

          If federal revenue was based on usage fees, which had been the libertarian mantra for decades but which Reason commenters like to reject for some reason, then the income tax would actually be structured in a far more “progressive” manner than it currently is in order to emulate it.

          The better solution is to dump the income tax. But if that’s not the table, then the most fairness we can achieve is by emulating usage fees.

  15. “Small income tax reduction” – sure. I ran the numbers for my own situation and it’s about a 15% decrease. I don’t consider that small.

    1. Yeah, mine would be about 20% less. The standard deduction is huge. Right now I itemize, but just barely necessary, maybe save a few hundred bucks doing so.

      1. You’re forgetting to remove your personal exemption probably.
        If you’re married that’s $8K. If you have kids its even more.

        1. Trump Tax Calculator

          Yeah, set it to zero, its about 22% actually, but will be a bit less due to state taxes.

          1. I don’t have kids, but I do think they’re keeping the child tax credit?

  16. Where is the proof that the cost of the proposed tax cut (interest, a lot of it) will pay for itself or better? They’re asking my kids to pay in the future for savings for people’s gains today. That should require a high level of proof, not speculative (actually, proven unlikely) supply-side trickle down theory.

    1. “supply-side trickle down theory”

      Bad troll. Bad. Don’t pee on the floor, you go outside. Bad naughty troll.

    2. The evidence that lower taxes results in greater private sector growth is very strong.

      That won’t help pay off debt in the near term, but it will in the long run.

    3. They’re asking my kids to pay in the future for savings for people’s gains today.

      This is the basic MO of government, like when California indebts itself by borrowing tons of money for expensive infrastructure that no one will use (medium speed rail) or by making promises of huge outrageous pensions that cannot be covered by investment returns alone.

    4. Feel free to make a contribution to reduce the national debt.

      Your kids can just default. Of course then they couldn’t run deficits themselves to pass the debt along to their kids.

  17. Federal deficits add dollars to the economy. They stimulate the economy and help cure recessions, whereas deficit reductions cause recessions. Now tell me again why deficits are bad.

    1. These people have confused a country’s fiscal policy with a household one, and that one little error has led to decades of nonsense.

    2. Do you believe the government should stop taxation entirely and ramp up expenditure rapidly?

      1. Seeing as “taxation is theft”, isn’t the first half from the Libertarian Gospel?

        1. Income taxation is most definitely theft. The government is essentially holding a gun to your head and saying “you worked this year, give us our cut now.” Come to think of it, that’s actually more extortion than theft.

          Now you can argue about the merits of such taxation, but you should at least be honest that you think its perfectly acceptable to throw someone in jail for failing to pay the government their share of your income.

          Me personally, I think it’s immoral to tax people who are trying to make money so they can buy food and shelter and a national sales tax or something like that would be much less immoral. That doesn’t mean it would work out any better in the end though.

          1. I think of it as a kind of slavery. It is as old an idea.

            1. Yes, because you confuse slavery with taxation. You are a moron.

        2. And what is your opinion on it? You’re deflecting it towards libertarianism, but not answering the question yourself.

    3. Federal deficits add dollars to the economy.

      All debt does this. Therefore all debt is good and there should be much more of it.

    4. They stimulate the economy and help cure recessions

      It stimulates malinvestment, causing the next recession to be even worse. Progress!

      1. This. Hayek and Mises would be proud.

      2. Yep

    5. “They stimulate the economy and help cure recessions, whereas deficit reductions cause recessions.”

      I think you need to expand on this point, because there is a great deal of debate about the accuracy of this statement.

    6. Deficits are good. That’s why all right thinking people embrace tax cuts.

    7. RodgerMitchell|11.2.17 @ 5:10PM|#
      Federal deficits add dollars to the economy. They stimulate the economy and help cure recessions, whereas deficit reductions cause recessions. Now tell me again why deficits are bad.”

      So if we increase the deficit by huge amounts, we all get rich?
      Fuck off.

    8. We’re not in a recession

    9. Letting lower and middle income people keep more of their money stimulates the economy in a much more effective and efficient manner. (oh, and we’re not in a recession, btw)

      1. Letting lower and middle income people keep more of their money creates increased demand for more products and services … and increases healthier consumer lending because people actually have more money with which to make payments for larger purchases.

  18. Already a Trump supporter (or so he claimed) was on a call-in show from New Jersey complaining he would only save about $500 a year in federal taxes and “it wasn’t worth it.” Fine, if $500 means so little, then surely you won’t complain when the Democrats raise your annual taxes by only $500 a year.

  19. Of course, we always get estimates of how much the federal debt will increase – but no estimates of how that might relate to the size of the economy, GDP, etc.

    I realize all this is guess work, but I wish the folks at Reason would obsess a little less about the federal debt – or at least consider it within the context of the other side of the balance sheet: assets.

  20. The standard deduction is not “much higher”. You lose the 4K per person exemptions. So a married couple is only gaining $3200 in tax-exempt income, or $800 if they are in the 25 pct bracket.

    And if you are one of the unlucky couples making $233K to $417K, your top bracket goes UP from 33 to 35 percent.

    And pretty much no one will be able to itemize.

    This will be a tax hike for upper middle class families, especially in high tax states with high property values. (Caps on mortgage interest at $500K and property taxes at $10K plus no deduction for state income or sales taxes.)

    1. Er, $233K to $260K stays at 33 percent. $260K to $417K pays MORE. Above $417K it’s a bonanza, with lower rates and no AMT.

      1. It is a huge tax cut for the wealthy. I’m not necessarily against that, but the people who could really use the tax cut are between 75 and 200k, IMO. These are the people who are not rich enough to not give a fuck, but don’t get any of the myriad of benefits from the government. They are also huge drivers of the economy though small businesses.

  21. You said ‘But that doesn’t mean that cutting the corporate tax rate is a bad idea. America has one of the highest corporate income tax rates in the world..’

    That’s partly true. We have ONE of the highest, but not the highest stated rates BEFORE DEDUCTIONS, CREDITS, ETC.. After that, the average corporation only pays about 17%, which is definitely in the bottom half of national rates.

    Why is that important? Because our tax structure is designed to encourage behavior. Our corporate tax structure, through credits and write-offs encourages investment and hiring..because those are exactly the things you can subtract from your bill!

    By reducing the cap to 20% and still keep all business write-offs, the real corporate rate will be what? 8%? 9%? And where will that extra 14% difference go? Where it always does. in the pockets of CEOs and stock buybacks.

    Just check this chart: Does this look like businesses are struggling under a massive burden in the US?

    http://bit.ly/1Bn19b6

    or this?

    http://bit.ly/1OM7vBP

    1. I need to get my national priorities in order!

    2. John B. Egan, two unattributed graphs mean nothing.
      You stink of a lefty.

      1. They are attributed you noxious spritz of anti-thought substance.

        1. Rich coming from such a ball of emotions as yourself.

          1. Stop sucking up to Sevo, Sevo is MINE! Bought and paid for. Got a receipt and everything

      2. Did you happen to see the TSLA quarterly announcement? Reality is a bitch, isn’t it?

    3. “And where will that extra 14% difference go? Where it always does. in the pockets of CEOs and stock buybacks.”

      The core of every leftist argument against business is an incorrect presumption of a lack of competition.

      When corporate costs go down the end result will be that prices go down. Simple as that. Higher margins will give them more room to compete on price or else will attract new firms to enter a market.

      Suppose every business in the US got a tax cut and “wasted” the money on salaries for employees and on enriching investors via buybacks and dividends? It just became noticeably more lucrative to be an employee or investor. More startups, more competition for those jobs, more investment will all be attracted by this. Better and cheaper products will be the result.

      1. Corporations have never increased salaries or added jobs just because profits have increased. They increase salaries when there is lots of competition for workers they want to hire and they add jobs when demand increases so that they need to expand. Just having better profits isn’t sufficient.

  22. Fairtax and end all this nonsense.

    If not, make everyone pay 39.6% so those demanding the rich pay it know exactly how it feels.

    1. Sold.

      In fact, make it 51%.

    2. “If not, make everyone pay 39.6% so those demanding the rich pay it know exactly how it feels.”

      They obviously built their wealth all themselves, have literally the largest army in the history of the world protecting it, get to suppress people who are not in their class, have an entire economic system built exclusively for them, can continue to fleece the public based on anti-free market principles, can continue to hire employees who were trained by taxpayers to support their business efforts, can deflect liability with ease, and can have a safety net for all of the above. At 39.6%, their money isn’t buying much of anything, is it?

  23. In discussing the increased Standard Deduction, the article doesn’t mention the elimination of the 4K personal exemption for each member of the family. So for a two-parent family with one kid, it would be a wash. Two or more kids and they lose. Of course the $600 increase in the child deduction offsets the loss just a little bit.

    1. I always think in married F/J, so that’s what I do my math in regards to

      The exemption is 4150 (2018’s projected before this) for each, so 12% of that is 498 and 25% 1037.5
      So the 600 increase fully offsets it for anyone completely in the 12% bracket

      In 25% you are about 437 under, but increasing the 25% bracket from 77.4k to 90k more than covers that.
      Not to mention the reduction from 15 to 12% for the 19k to 77.4k

      At the end of the day, Uncle Sam is still exceeds my three largest annual spending categories *angryface*

  24. Deficits are taxes on the installment plan, or, alternatively, on your credit card–and a lot more expensive that current taxes because of the interest charges, which continue compounding and accumulation until paid in full. Chances are your children will still be paying the Obama-Trump deficits.

  25. reason.com’s favorite libert…,er, Republican:

    “I am going to vote for this. This is a new experience for me to be excited about a bill,” Rep. Thomas Massie (R-Ky.) told CNN.

  26. Isn’t this a misstatement:
    “…would cap the mortgage interest deduction at $500,000 for new home loans starting next year.”
    I don’t think the proposed law caps the “mortgage interest deduction at $500,000.”
    No one has a mortgage interest deduction that high. It would cap the mortgage interest deduction ON LOANS up to a borrowed amount of $500,000.

  27. What will corporations do with the money they retain from lower corporate taxes? Ask a CEO at a Wall Street Journal executive forum:

    https://tinyurl.com/y7p35df3

    Maybe they were just too tired to put their hands in the air…

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