Politics House GOP Tax Bill Keeps 39.6% Rate for High-Earners, Cuts Corporate Rate to 20%

http://www.rollcall.com/news/politi...te-for-millionaires-cuts-corporate-rate-to-20

The bill would collapse seven tax brackets for individuals to four brackets with rates of 12, 25, 35 and 39.6 percent.

The bill would also increase the standard deduction so single filers earning up to $12,000 and joint filers earning up to $24,000 would pay zero in taxes.

The measure includes an increase in the child tax credit from $1,000 to $1,600 per qualifying child. The child tax credit expansion is part of a new family credit that also includes a $300 credit for each parent and non-child dependent to help with everyday expenses.

The mortgage interest deduction is maintained in full for existing mortgages, but future home-buyers would only be eligible to claim the deduction on interest paid on the first $500,000 of the total cost of their mortgage.

Retirement incentives for 401(k)s and IRAs are also maintained.

And the estate tax, criticized by Republicans as a “death tax,” will be fully repealed under the plan, but not for six years. In the interim the bill would double the estate tax exemption.

A provision in the bill that is expected to draw some opposition is capping an itemized deduction for state property taxes at $10,000. The measure would eliminate the incentive that allows taxpayers to deduct state income or sales taxes.

 

http://thehill.com/policy/healthcar...repeal-of-individual-health-insurance-mandate

The tax reform bill to be released Thursday will not include a repeal of ObamaCare's individual mandate, sources say, despite President Trump proposing the idea on Wednesday.

Repealing the mandate would introduce a whole new area of controversy into the bill, and many Republicans think tax reform is hard enough without adding in health care.

Still, it is possible the idea could come back down the road, given that some Republicans are still pushing.

 

Looks to me like it targets the rich to a large degree:

1) maintains the 39.6% bracket
2) eliminates mortgage deduction on the expensive homes
3) eliminates state property taxes above $10K, obviously on expensive homes

Seems like it will be bad for real estate investors, but it might make housing more affordable to those who can't get into the market.

Trump benefits from the phase out of the death tax, should he live another 6 years. He won't actually enjoy the benefit, since he'll be dead.

20% business tax rate should help small businesses as well as the biggest ones. It also means a lot less incentive to do the overseas tax loophole tricks.

Missing is a break for repatriating overseas moneys. Bringing those $trillions into the US would be a huge gain for the economy.

 

1. The money isn't actually overseas. It belongs to foreign subsidiaries of US corporations - but that doesn't mean it isn't already invested here at home.

2. Experience shows that the primary effect of giving a tax holiday on foreign income is not hiring or capital investment in the US, but a gain for the shareholders in the form of additional dividends or stock buy-backs.

3. It's bad policy to have a tax rule that you break every couple of decades - that just encourages corporations to wait for the next tax holiday. Better to change the rules so that they work the same every year. Tax predictability is good for the economy.

barfo

 

He'll be dead, but his kids will gain billions.

He (and other rich people) will benefit bigly from the elimination of the AMT. You missed that one.

Edit: Also, lowering the pass-through entity tax to 25% effectively lowers the tax rate on many rich people to 25%.

barfo

 

No matter how you spin it, bringing $2T from overseas makes our GDP $2T bigger.

 

A real libertarian wouldn't say that paying more taxes to the government increases GDP.

The tax holiday doesn't mean money is shipped in from overseas. What it means is the company pays tax on that money, albeit at a reduced rate.

barfo

 

A real libertarian knows math. Current economy + $2B = Current economy + $2B

https://www.cnbc.com/2017/08/25/tru...ts-tax-break-could-boost-these-10-stocks.html

 

So you're saying it's a red herring to keep the tax.

Top 5% isn't as wealthy as you might think. It's a net worth of about $1.8M, which is a nice sized 401K and owning a home at age 65.

Good for you. We agree on that.

 

So you're fine fucking over a typical middle class person who's saved for a lifetime and paid off his/her house?

I do mean fucking over, because that's exactly what the tax does.

$1.8M is also the value of a fairly small business. So shut it down when the founder dies? That's bad for the whole community.

 

The estate tax is just that, taxing the dead person's net worth. That's exactly what's wrong with the tax.

It's difficult to have a reasoned discussion if you can't accept the facts or present things that aren't fact as if they were.

 

Estate tax.

What is an estate?

http://www.investopedia.com/terms/e/estate.asp

What is an 'Estate'
A person's estate is everything comprising the net worth of an individual, including all land, possessions and other assets.

 

I just have a hard time with the concept of an estate tax, but that's partially because I'm a first-gen middle-classer hoping to get up to whatever comes next. I can absolutely see where, if you look at someone like Trump or Chelsea Clinton or Paris Hilton or (whoever), you would say "what has he/she done to deserve that? Sure, tax the hell out of an inheritance". But I'm more from the "So... I pay tax when I earn the money. I pay tax when I invest the money and make more money. I pay tax when I spend the money. I pay taxes and fees when I set up a company using that money to pay employees, purchase inventory and hopefully make more money. Now I die and you want to tax whatever's left, and taking it away from who I want to give it to? F*ck you." camp.