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The new tax reform proposal


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#1 wilkie

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Posted 27 September 2017 - 05:38 PM

Today the president released his new proposal for a tax reform package.   It reduces the tax rate to 3 categories:  12%,  25% and 35%.  I don't know what the AGI income levels are.  Additionally it would reduce corporate income tax from 35% to 20%.    And it would tax small business  ($750,000 a year or less) pass through tax to 25%.   It would eliminate the federal estate tax which means that there would be no tax federally on inheritance  (state could still tax)  and it would eliminate several deductions including the medical expense deduction when more than 10% of your expenses were medical expenses,   education expenses,   moving expenses,   state tax exemption.

 

It would increased the individual exemption to $12,000 per person or $24,000 for a married couple.

 

There could be a higher income tax beyond the 35% rate but it has not yet been deal with.

 

The mortgage deduction would stay.

 

This is of course a first draft and Trump will be present his plan in Indiana tonight.   Too early to know much but the two things that stand out to me are a reduction of the top rate from 39.5% to 35%  and a reduction in the corporate income tax from 35% to 20%.  And of course elimination of the death tax which only applies to the top 10% right now.

 

Nothing about capital gains.   Nor was anything mentioned about corporate deductions for travel,  gas, mileage etc.  

 

Trump says it does not benefit the wealthy.

 

Interesting logic.

 

More coming in future days.



#2 oldtimer

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Posted 27 September 2017 - 05:47 PM

define "wealthy"

 

I'm no business owner  but lowering the Corporate tax seems a no brainer..need a  tax Amnisty period for Corps to bring back their foreign stashed money back stateside and invest in infrastructure.

 

 so far  I see no problem with that  and I'd wager Wilkie  your better off than POOT & I



#3 Chiefsfan1963

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Posted 27 September 2017 - 06:10 PM

define "wealthy"

I'm no business owner but lowering the Corporate tax seems a no brainer..need a tax Amnisty period for Corps to bring back their foreign stashed money back stateside and invest in infrastructure.

so far I see no problem with that and I'd wager Wilkie your better off than POOT & I

Does this mean I can take my money out from under my mattress and put it back in the bank?

#4 oldtimer

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Posted 27 September 2017 - 06:13 PM

Does this mean I can take my money out from under my mattress and put it back in the bank?

 

 

I wouldn't..  I like Mattress $$



#5 BroncoStud

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Posted 27 September 2017 - 07:07 PM

This would benefit the country.  I hope he can get the assholes in Congress to act on it.



#6 omahacolt

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Posted 27 September 2017 - 08:18 PM

hope it gets shit canned like his health care bills



#7 BroncoStud

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Posted 27 September 2017 - 08:21 PM

hope it gets shit canned like his health care bills

I guess if you paid taxes you would like to see reform.  The Federal Government taking 50% of someone's estate when they die is a fucking disgrace.



#8 jetlord

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Posted 27 September 2017 - 08:40 PM

Not sure why they would keep the mortgage deduction but not the deduction for taxes paid locally and to the state.  It seem unfair to tax money that's used to pay state taxes.  The mortgage deduction is certainly popular, but seems more of a benefit to the wealthy than the common worker.  If a family gets a $24k deduction and pays 10% on the rest, that doesn't seen too onerous.  They make $60k and pay $3,600 plus I think charitable contributions are also deductible.  Cutting the top rate 4% and knocking out the state tax deduction is probably about a wash.  Anyone know what's proposed on CGs?  The federal death tax is a joke and should be eliminated.  Most people find ways to get around it and it brings in very little revenue.  Besides, it's morally wrong to take away 55% to punish those who save, invest, or create new businesses rather than squander their resources.  Like Sen. Dirkson used to say, "The devil is in the details."  I'm awaiting the details and predictable squawking from the Dems about how unfair it all is, no matter what's presented.



#9 BroncoStud

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Posted 27 September 2017 - 09:32 PM

The mortgage deduction is huge for my taxes.  Even with though I'm paying way too much, and it sucks.


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#10 mex

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Posted 27 September 2017 - 10:19 PM

hope it gets shit canned like his health care bills

why? do you think the current tax code is good for the economy?

 

personally, I like the plan so far especially the corporate tax reduction... but I'd take it a step further. 

 

I'd throw a moratorium on cap gains for five years... this would free up a ton of capital that has been buried under red tape for decades... it would spur investment and job creation would follow. 

 

Just wondering OC, what part of the current tax code do you think is good for economic growth, and please explain why we haven't experienced real growth since obam became prez. please refrain from the inevitable 'obviously the economy is racist, because it didn't perform for a black president' excuse.



#11 mex

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Posted 27 September 2017 - 10:22 PM

Not sure why they would keep the mortgage deduction but not the deduction for taxes paid locally and to the state.  It seem unfair to tax money that's used to pay state taxes.  The mortgage deduction is certainly popular, but seems more of a benefit to the wealthy than the common worker.  If a family gets a $24k deduction and pays 10% on the rest, that doesn't seen too onerous.  They make $60k and pay $3,600 plus I think charitable contributions are also deductible.  Cutting the top rate 4% and knocking out the state tax deduction is probably about a wash.  Anyone know what's proposed on CGs?  The federal death tax is a joke and should be eliminated.  Most people find ways to get around it and it brings in very little revenue.  Besides, it's morally wrong to take away 55% to punish those who save, invest, or create new businesses rather than squander their resources.  Like Sen. Dirkson used to say, "The devil is in the details."  I'm awaiting the details and predictable squawking from the Dems about how unfair it all is, no matter what's presented.

I think wilkie is mistaken on the state income tax deduction for federal filings. makes no sense



#12 wilkie

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Posted 27 September 2017 - 11:08 PM

State income tax under current proposal would not be deductible on Fed return according to what I read.

#13 mex

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Posted 27 September 2017 - 11:17 PM

State income tax under current proposal would not be deductible on Fed return according to what I read.

that's the stupidest thing I ever heard of... paying income tax on income taxes

 

the whole idea of income tax is absurd



#14 wilkie

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Posted 27 September 2017 - 11:30 PM

I do not disagree. Local tax such as ad valorem would not be deductible either. This is just draft #1 and I am certain will change a lot when the final bill is submitted. No details yet

#15 jetlord

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Posted 27 September 2017 - 11:33 PM

that's the stupidest thing I ever heard of... paying income tax on income taxes

 

the whole idea of income tax is absurd

I think Wilkie is right and it really baffles me.  Why are we paying taxes on money we don't see due to taxes?  BS likes his mortgage deduction and he's in the majority, but that is nothing but a sop to the building trades industry.  The guy with the million dollar house deducts $40,000 while lunch pail Joe deducts $6,000.  Talk about regressive, but the middle class would go ballistic if they couldn't deduct mortgage interest.  And yes, I enjoyed deduction interest.  But it's like SS.  Everybody hates it but collects because they've paid in and want something back.  Humans are funny.



#16 mex

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Posted 27 September 2017 - 11:47 PM

I think Wilkie is right and it really baffles me.  Why are we paying taxes on money we don't see due to taxes?  BS likes his mortgage deduction and he's in the majority, but that is nothing but a sop to the building trades industry.  The guy with the million dollar house deducts $40,000 while lunch pail Joe deducts $6,000.  Talk about regressive, but the middle class would go ballistic if they couldn't deduct mortgage interest.  And yes, I enjoyed deduction interest.  But it's like SS.  Everybody hates it but collects because they've paid in and want something back.  Humans are funny.

humans are generally uneducated and fickle

 

I love the mortgage deduction because it encourages home ownership especially when rates are high, which is precisely why they need to keep it. obviously this helps the wealthier guy with the bigger house more, but then again, he's likely paying a lot more than lunch pail joe in the first place, so more power to him



#17 Semo

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Posted 28 September 2017 - 01:14 AM

Congress will screw it all up. Just wait. It’s the biggest “hold my beer” group of idiots alive.

#18 omahacolt

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Posted 28 September 2017 - 01:21 AM

why? do you think the current tax code is good for the economy?

personally, I like the plan so far especially the corporate tax reduction... but I'd take it a step further.

I'd throw a moratorium on cap gains for five years... this would free up a ton of capital that has been buried under red tape for decades... it would spur investment and job creation would follow.

Just wondering OC, what part of the current tax code do you think is good for economic growth, and please explain why we haven't experienced real growth since obam became prez. please refrain from the inevitable 'obviously the economy is racist, because it didn't perform for a black president' excuse.

curting corporate tax just means a better bottom line for corporations. There will be no economic growth from it

#19 mex

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Posted 28 September 2017 - 01:46 AM

curting corporate tax just means a better bottom line for corporations. There will be no economic growth from it

what do corporations do with post-tax profit?



#20 jetlord

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Posted 28 September 2017 - 02:39 AM

curting corporate tax just means a better bottom line for corporations. There will be no economic growth from it

The vast majority of corporate profits are plowed back into the business for expansion, development, research, all of which grows the economy and requires more employees.  The board might give the officers a raise and maybe a dividend increase will occur, but that's not where most of it goes in most corporations.  Tax corporation too much, they shrink or move off shore.  Tax them too little, and the government loses revenue.  There's an optimal point, but with world wide competition, the 35% rate is a killer.  Why don't you back up your biased statements with some facts or data?






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