Here’s a sort rundown of the senate bill and the main differences. Looks like they can agree to ditch the Obamacare individual mandate (since it helps their numbers look better).
[quote=“admiral, post:369, topic:1661, full:true”]
[quote=“JoeFriday, post:367, topic:1661”]
A) I posted “taxpayers” NOT “population”, so your argument is faulty.
B) Quite obviously, the federal income tax is not the only tax.
[/quote]My post did not contain an argument. I was simply pointing out objective and easily verifiable facts.[/quote]
Which were irrelevant.
I did not post half the “population”. I did not post half the “country”. I posted “half the country’s TAXPAYERS”, as in those paying federal income tax. Your post, argumentative or not, is faulty.
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[quote=“JoeFriday, post:379, topic:1661”]
I did not post half the “population”. I did not post half the “country”. I posted “half the country’s TAXPAYERS”, as in those paying federal income tax. Your post, argumentative or not, is faulty.[/quote]It’s quite unfortunate that your posts are so intentionally misleading.
The term “taxpayer” simply means a person who pays taxes. In response to the post in which I mentioned that about 45% of the population pay no federal income tax (as the article that I linked above points out, about half pay no federal income tax because they have no taxable income, while the other half get enough tax breaks to erase their tax liability), you responded with “Quite obviously, the federal income tax is not the only tax.” So, when it suits your argument, these people are “taxpayers,” but when it’s inconvenient for you, the definition suddenly changes.
What makes things even worse is that regardless of the definition, your post that “the other half of the country’s taxpayers would get zip or a tax increase” is intentionally misleading. Once again, regardless of the definition of “taxpayer,” if you are paying very little or no federal income taxes, a tax cut won’t provide you with much of a benefit because there’s hardly anything to cut. Likewise, an implication in your posts that only the poor get very little benefit from the tax cut is also highly misleading, as there are quite a few cases of the households making several hundred thousand dollars in high SALT situations whose tax liability would not go down all that much or may actually increase. Overall, the tax reform would amount to a tax cut for most, but the elimination or imposition of relatively low caps on many deductions routinely taken by the upper income households makes the tax reform a tough sell for many of them.
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Chained CPI is very very bad. If they replace CPI with C-CPI like how Obama proposed it, it’ll affect not just tax brackets, but most everything.
The inflation adjustment will be lower than if the CPI measure was left untouched.
- Deductions
- Exemptions
- Tax advantaged plan contribution limits (401k, IRA, HSA, etc)
- Tax Brackets - aka “stealth tax increase”
- Social Security / Medicare (not that I care, but hey)
- Income thresholds for near everything
According to the BLS, from Dec 1999 to Oct 2017 (Interim):
C-CPI: 140.14 / 1999 Dec 100.00 = 40.14%
CPI: 2017 Oct 246.663 / 1999 Dec 168.3 = 46.56%
The difference snowballs as time periods increase. Not sure My comparison above fully illustrates the difference since the 401k contribution limit was 10k in 1999, but applying a 46% increase doesn’t bring it anywhere near the current 18k limit.
Edit: Here, Bloomberg Bizweek explains it better than I do - he focuses on SS benefits but it affects all the above, not just SS:
https://www.bloomberg.com/news/articles/2013-04-10/why-chained-cpi-rattles-the-elderly-and-soon-to-be
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A potential change that isn’t getting too much attention is the requirement to sell securities on a FIFO basis rather than it being an option under current law. This might blindside people who hold much of their assets in mutual funds. Even if the individual uses FIFO by choice now, that doesn’t mean the fund companies have been using FIFO.
"This also would mean that mutual fund managers would also lose the ability to pick specifically which shares to sell. The change would take effect Jan. 1.
“Requiring taxpayers to treat securities as sold on a first-in, first-out basis would be disproportionately harmful to ordinary Americans who invest with funds,” said Paul Schott Stevens, president and CEO of the Investment Company Institute.
“It would increase significantly the amount of taxable distributions made to investors every year and tie the hands of fund managers as they pursue investment strategies on behalf of savers.”"
https://www.cnbc.com/2017/11/15/senate-tax-bill-boosts-taxes-on-stock-sales.html
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[quote=“admiral, post:380, topic:1661, full:true”]
[quote=“JoeFriday, post:379, topic:1661”]
I did not post half the “population”. I did not post half the “country”. I posted “half the country’s TAXPAYERS”, as in those paying federal income tax. Your post, argumentative or not, is faulty.[/quote]It’s quite unfortunate that your posts are so intentionally misleading. [/quote]
My post was in regards to those who pay federal income tax. Your post was in regards to those who do not pay federal income tax. I’ll leave it to others to delineate who is being misleading.
[quote=“gwraigty, post:382, topic:1661, full:true”]
A potential change that isn’t getting too much attention is the requirement to sell securities on a FIFO basis rather than it being an option under current law. This might blindside people who hold much of their assets in mutual funds. Even if the individual uses FIFO by choice now, that doesn’t mean the fund companies have been using FIFO.[/quote]
Nice little $4 Billion tax increase, eh ? Not to mention it would but a big dent in the advantages of ETFs.
Charming.
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Well, even Goldman Sachs, who has never seen a tax cut they didn’t like, sez these GOP plans (both houses) stink. They say they won’t increase economic growth, won’t create jobs, won’t spur business investment, but will create trillions and trillions of federal red ink.
And the cat’s out of the bag now, as several congressional GOPers have admitted the game plan, that when the federal debt explodes, their response will not be to admit they were wrong and reverse course, but they plan to then claim they need to cut Social Security & Medicare.
Making America Great Again.
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[quote=“JoeFriday, post:384, topic:1661”]
Nice little $4 Billion tax increase, eh ? Not to mention it would but a big dent in the advantages of ETFs.
Charming.
[/quote]Wouldn’t this almost exclusively disadvantage upper income households, who are the ones with taxable investments? What happened to “the Rich & Corporate backing their Brinks trucks up to the U.S. Treasury and taking what they want?”
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Its true that most of the impact on the stock sale change would be felt by the top 10%. They own 90% of the stock and will pay 90% of that $4b increase. OTOH they get 40% of the total $1.5 trillion tax cut.
Lets see 40% of $1.5 trillion minus 90% of $4B … yeah I think they’re still coming out ahead.
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[quote=“JoeFriday, post:384, topic:1661”]
Nice little $4 Billion tax increase, eh ? Not to mention it would but a big dent in the advantages of ETFs.[/quote]
Not at all. ETFs pay no tax when the distribute shares via a creation/redemption transaction with an authorized participant. Yes, it might be a little easier if they can pick which, but not that much if they have very high turnover like the major ETFs do. On the other hand, it would be noticeably worse for mutual funds, who would have to sell earlier positions for higher gains, and in turn have to make larger taxable capital gain distributions that would incur accelerated tax liabilities for their shareholders.
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[quote=“jerosen, post:387, topic:1661”]
Lets see 40% of $1.5 trillion minus 90% of $4B … yeah I think they’re still coming out ahead.
[/quote]Of course. The goal is for most households to come out ahead, as on a net basis it is intended to be a tax cut.
It is just not true to imply that this version of the tax bill is purely one sided and would only provide massive benefits to the upper income households. It should, of course, be obvious that the more you’re paying in taxes, the more you stand benefit from a tax reduction, but one of the reasons that this tax reform is so difficult is because it contains a number of provisions that are a tough sell for people on the opposite sides of the income spectrum.
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Here are two nice short summaries of the tax proposals and their differences, one focusing on personal income tax and one of the estate tax / estate planning. Two pages each, short and sweet.
http://3bpe2o3p4d9h2nubci27g1nf.wpengine.netdna-cdn.com/wp-content/uploads/2017-11-17-Tax-Reform-Update.pdf
http://3bpe2o3p4d9h2nubci27g1nf.wpengine.netdna-cdn.com/wp-content/uploads/2017-11-17-Estate-Planning-Update.pdf
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$4B increase doesn’t change the net $600B cut. Doesn’t refute that argument that the rich are making out great in this cut.
You were trying to cite this $4B increase impacting mostly the rich as some sort of argument that the rich aren’t getting the vast benefit of this tax reform proposal.
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[quote=“jerosen, post:391, topic:1661”]
$4B increase doesn’t change the net $600B cut. Doesn’t refute that argument that the rich are making out great in this cut.
You were trying to cite this $4B increase impacting mostly the rich as some sort of argument that the rich aren’t getting the vast benefit of this tax reform proposal.
[/quote]I wasn’t the one citing the $4B increase. JoeFriday was the one who referenced it in his criticism of the tax reform.
What struck me as rather amusing is JoeFriday’s complaint about the tax reform benefiting those who are taxed the most, but then also complaining about a provision in the tax bill that is specifically intended to reduce the net benefit that would be received by those people.
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OK I see your argument now.
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[quote=“xerty, post:388, topic:1661, full:true”]
Well, a couple of people I saw from Wall Street disagreed. Not to mention Vanguard, Fidelity, and Eaton Vance are all publicly voicing opposition. You’re welcome to argue with them.
[quote=“admiral, post:386, topic:1661, full:true”]
???
I was merely pointing out the hypocrisy of YET ANOTHER tax increase within GOP plans being sold as tax cuts.
Glad to see you’re so easily amused, but not surprised you’re once again so off-base.
Thanks for the heads up on this potential change – I can only hope it gets dropped along the way. For several decades I’ve kept meticulous records of transactions for the express purpose of being able to use the specific-shares method of selling.
This is way down the list of dumb things about these tax proposals, but it’s still aggravating.