For all the talk of one of the goals of tax reform being to simplify taxes, they just keep adding in more complications. Making the rules/proposals the same for businesses and individuals would restore some credibility to that claim.
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The University of Chicagoâs Booth School of Business surveyed 42 top economists spanning a wide number of specialties and political outlooks about the current GOP tax plans. The panel included multiple Nobel Prize winners, White House veterans, and former presidents of the American Economic Association.
Of the 42 economists polled, only one thought the GOP plans would boost the economy, but he subsequently admitted he misunderstood the question.
âAside from the redistribution of wealth, hard to see this changing much,â wrote Richard Thaler, the most recent winner of the Nobel Prize in economics.
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[quote=âJoeFriday, post:403, topic:1661, full:trueâ]
The University of Chicagoâs Booth School of Business surveyed 42 top economists spanning a wide number of specialties and political outlooks about the current GOP tax plans. The panel included multiple Nobel Prize winners, White House veterans, and former presidents of the American Economic Association.
Of the 42 economists polled, only one thought the GOP plans would boost the economy, but he subsequently admitted he misunderstood the question.
âAside from the redistribution of wealth, hard to see this changing much,â wrote Richard Thaler, the most recent winner of the Nobel Prize in economics.
[/quote]The economists werenât just asked whether the GOP plans would boost the economy. They were asked whether the GOP plans would âsubstantiallyâ boost the economy, which is a very different question.
Then, a third of the economists (36% of the responses, or 34% weighted by each economistâs confidence) were uncertain about the answer, which is contrary to the implication contained in your post.
Here is a link to the actual poll: http://www.igmchicago.org/surveys/tax-reform-2
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The only âimplicationâ is yours. Read the quotes.
New CBO report finds Senate GOP tax bill slams the poor even more than originally believed.
By 2019, Americans earning less than $30,000 a year would be worse off under the Senate bill, CBO found. By 2021, Americans earning $40,000 or less would be net losers, and by 2027, most people earning less than $75,000 a year would be worse off. On the flip side, millionaires and those earning $100,000 to $500,000 would be big beneficiaries, according to the CBOâs calculations.
The Congressional Joint Committee on Taxation, another official nonpartisan group that analyzes tax bills, put out a similar report showing how lower-income families are hurt by the Senate GOP tax bill. But the CBO also calculates what would happen to Medicaid, Medicare and the Basic Health Program if the Senate GOP plan became law. The CBO is showing even worse impacts on poor families than the Joint Committee on Taxation did.
[quote=âJoeFriday, post:405, topic:1661, full:trueâ]
The only âimplicationâ is yours. Read the quotes.
[/quote]I did, just as I read your post, which is incorrect and misleading on a number of levels. Your post specifically said âOf the 42 economists polled, only one thought the GOP plans would boost the economyâŚâ Thatâs incorrect, as the specific question was whether the GOP plans would âsubstantiallyâ boost the economy. In addition, you very conveniently omitted the fact that a third of the economists were uncertain as to whether the GOP plans would âsubstantiallyâ boost the economy, which, in combination with your carefully chosen quote and false reporting of the actual question they were answering, created an implication that 41 out of 42 of them opined that the GOP plans would provide no boost to the economy.
In fact, although most economists in that particular survey did not provide comments, a number of them did. If you look at their comments, you will see that even if they had been simply asked whether the GOP plans would âboostâ the economy (as opposed to âsubstantially boostâ the economy), the outcome of the survey wouldâve been quite different.
Personally, I am not at all sold on the GOP plans, so my criticism of your highly misleading posts has very little to do with how I feel about the proposals. I just find all these misleading posts on both sides absolutely distasteful, as, just as the case with many other topics out there, they unnecessarily politicize and poison what should be a level headed debate about the direction of our fiscal policy. This makes it very difficult for people to research all these things for themselves and to figure out what is and is not true, so important financial decisions end up being made based primarily on political labels and ideology.
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I learned a long time ago that asking economists to make predictions about the economy is a waste of time. If they actually understood how to make the eoncomy work well and smoothly on a macro level, we wouldnât have all this uncertainty over recessions. Also, most of them would be out of work since their main job seems to be speculating about what might happen in the future, but without much conviction. âMaking the weathermen look goodâ
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Again, no endorsement, but the WSJ likes the economic prospects for the tax cuts and reform if you want the other perspective from different economists.
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My summarization of the facts in my post are accurate. The quote is factual and accurate. Once again you are falsely accusing me of being misleading, when apparently you just donât like the facts.
The WSJ made the same wrong call about 16 years ago. Weâve seen this disaster movie already.
I got this email from Ameritrade re: FIFO
Dear Valued Client,
TD Ameritrade believes itâs important to stand on the side of our clients. We have reviewed the Senate Tax Cuts and Jobs Act, which was released last week. Section 13533 of the Senate Bill imposes a single cost basis methodology for investors, âfirst in, first outâ (âFIFOâ), on all sales of securities (except mutual funds).
For the average investor, this means possibly being required to pay the highest capital gains taxes where a stock has appreciated over time.
On behalf of our approximately 11 million client accounts, we strongly oppose this provision. We believe it will harm individual investors by eliminating their freedom to decide when to take losses or gains on their investments, potentially resulting in an increased tax burden.
An Example
> Suppose you hold a significant amount of a companyâs stock, accumulated over a 20-year career. Youâre now retired, and you want to sell some company stock to diversify your portfolio. Assume the purchases over time range from $5 per share up to $90 per share, but the stock now is trading at $50.
> If you sell at $50, rather than being able to take losses on the stock purchased above $50, the Senate Bill could require you to pay capital gains taxes on the appreciation of the stock from $5 to $50. That is, even if you have experienced sizeable paper losses on the purchases above $50, the Senate Bill might force you to pay taxes calculated on the largest gains possible.
> We donât think thatâs fair. We feel the Senate should stand up on behalf of individual investors and reject imposing a FIFO cost basis requirement on sales of securities.
What Can You Do?
If you are concerned about these changes, we encourage you to contact your congressional representatives today and make your voice heard. We have created a site so that individual investors like you can stay informed and easily reach out to your government representatives on issues that matter to you. Youâll find a summary of current issues there, along with template letters to help get you started.
TD Ameritrade believes in providing our clients with a voice on issues that stand to impact their ability to confidently save, invest, and plan for the future. We are on the frontlines, communicating your interests to those who can influence policy and bring about change.
By coming together, we can have a more meaningful impact. Please join the conversation.
Several GOP senators are not buying their fellow senators fairy dust that massively cutting tax rates for the Rich & Corporate will pay for itself instead of exploding the federal debt by trillions, so they are demanding a âtriggerâ mechanism to undo the tax cuts if the magic economic growth doesnât materialize.
Senators Bob Corker (R-TN), James Lankford (R-OK), and Jerry Moran (R-KS) are pointing to the fiscal disaster that occurred in Kansas as a result of massive tax cuts, which should not be repeated on the federal level.
Pass the popcorn.
Reducing distortions is good. Reducing corpâs headline rate is good as itâll make the US look less awful and stop companies from not basing themselves here.
Do think a 25% rate would do it though. No need to go down to 20% and try to compete with the likes of HK or Ireland.
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The Senate committee, including Corker, voted in favor of the Senate version of the bill, which should be voted on in the full Senate later this week. Hereâs a timeline and some details on what remains to pass the tax reform bill:
If you want to read the tea leaves on what the potential R holdouts are looking for, hereâs more detail on that. Economy-contingent tax hikes (really, if the economy sucks we should raise taxes?), the repeal of the ACA mandate, and better treatment of some pass-through business are on the slate.
My gut says it will eventually pass. Likely bad for me personally as it reduces opportunities for extreme optimization, but good for growth.
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According to the GAO (the General Accounting Office is the investigative arm of Congress), TWO-THIRDS of profitable U.S corporations pay ZERO taxes, and the rest pay less than 5%. Anyone peddling the line that we have the highest corporate taxation in the world is either intentionally lying through their teeth or a gullible fool. The Rich & Corporate are WOEFULLY undertaxed and quite obviously not paying their fair share of taxation.
[quote=âxerty, post:415, topic:1661, full:trueâ]
The Senate committee, including Corker, voted in favor of the Senate version of the bill, which should be voted on in the full Senate later this week.[/quote]
Corker and others stated they only voted for it in committee for procedural reasons, but would not vote for it on the floor without major changes.
Thereâs a legitimate argument to be made here because there are highly profitable companies that donât pay taxes. Which is why I donât get why you have to lie when you post your statistics.
From the GAO report:
âIn each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability.â
Two-thirds of all corps, not two-thirds of profitable corps.
âAmong large corporations (generally those with at least $10 million in assets) less than halfâ42.3 percentâpaid no federal income tax in 2012. Of those large corporations whose financial statements reported a profit, 19.5 percent paid no federal income tax that year.â
So the share of profitable corporations that paid no tax is actually closer to 20%, not 66%.
âFor tax years 2008 to 2012, profitable large U.S. corporations paid, on average, U.S. federal income taxes amounting to about 14 percent of the pretax net income that they reported in their financial statements (for those entities included in their tax returns). All large corporationsâprofitable and those that reported current year lossesâpaid 25.9 percent of their pretax net income in U.S. federal income taxes.â
Profitable corps 14%. All corps 25.9%. Not sure where your 5% number came from.
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They say that the actual corporate tax rate in USA is 21% versus 24% for comparable G7 countries.
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Some of this is ideological. Why should the owners/shareholders pay taxes twice on the same income? Once at the corporate level and again as dividends or cap gains induced via share buybacks?
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