[quote=“gwraigty, post:359, topic:1661”]
According to the latest Senate markup, all tax proposals affecting individuals would expire at the end of 2025 and revert to what we have now under current law. If their goal is to make tax planning impossible, I think they’re succeeding.
[/quote]I think that the media is making a mountain out of a molehill here. Every law is only “permanent” until the next Congress changes it. Likewise, the sunset provisions are only “temporary” until Congress extends them. There is a ton of tax laws, for instance, that sunset on an annual basis, but have been routinely extended for many, many, many years.
The reason that both parties use these sunset provisions is to get the budgetary projections to look better, as the budgetary scoring is done based on the way the laws are written. So, if a tax cut is scheduled to sunset in 5 years, the 10 year budgetary calculations will assume that this is exactly what will happen, which would improve the 10 year projections, even through for practical purposes it makes no difference whether the tax cut has a built in sunset or not. Both parties use these sunset provisions all the time to make their proposals look better.
[quote=“JoeFriday, post:361, topic:1661”]
Hypothetically, let’s say I and (about) half the country’s taxpayers would get a tax cut. What’s the point, if it’s at the expense of (about) the other half of the country’s taxpayers, that would get zip or a tax increase ?
[/quote]Approximately 45% of the population already pays no federal income tax (45 percent of Americans pay no federal income tax). So, it’s rather difficult to come up with a tax cut that would cause them to pay even less.
You end up owing income tax on the forgiven amount including the capitalized interest. You don’t save that much vs paying it off after 10 years since the actual forgiven amount will be close to 4x the original value at 6.8% interest.
Primarily because they have little to no income to tax. A large % are retirees who only have non taxed SS income. Another bunch are lower /middle income families getting child tax credits.
People like to cite this figure and whinge about it as if its a mass injustice. So do people all wanna jack up taxes on the poor? Repeal child tax credits? Make SS 100% taxable?
[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.
As for the “taxpayers,” as the article that I linked above points out, of the roughly 45% of the population that pays no federal income tax, 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. Once again, it’s rather difficult to come up with a tax cut that would cause them to pay even less.
Quite obviously, if we are discussing a federal income tax cut, a statement that people pay other taxes has nothing to do with the topic.
[quote=“jerosen, post:368, topic:1661”]
Primarily because they have little to no income to tax. A large % are retirees who only have non taxed SS income. Another bunch are lower /middle income families getting child tax credits.
People like to cite this figure and whinge about it as if its a mass injustice. So do people all wanna jack up taxes on the poor? Repeal child tax credits? Make SS 100% taxable?
[/quote]You took my response out of context.The context here is that if you pay very little or no federal income tax, a federal income tax cut is not going to benefit you all that much, if at all, as there is very little or no tax to reduce.
The issue with sunset provision on the individual tax changes is not that the individual changes might go away in the future. The issue is that the corporate tax changes are permanent while the individual tax changes are required to sunset (or be extended in the future). Essentially individuals are being asked to gamble that our changes will be extended or kept rolling forward in the future so that corporations can have permanent change now. Will the economy be so booming from the corporate tax cut in 10 years that they are able to extend the individual changes, who knows? Guess we have to hope so or we will be suckers in 10 years.
[quote=“hairybeast, post:374, topic:1661”]
The issue with sunset provision on the individual tax changes is not that the individual changes might go away in the future. The issue is that the corporate tax changes are permanent while the individual tax changes are required to sunset (or be extended in the future). Essentially individuals are being asked to gamble that our changes will be extended or kept rolling forward in the future so that corporations can have permanent change now. Will the economy be so booming from the corporate tax cut in 10 years that they are able to extend the individual changes, who knows? Guess we have to hope so or we will be suckers in 10 years.
[/quote]For the reasons that I mentioned above, it’s a distinction without a difference, and merely represents a budget maneuver, which is something that both parties use all the time.
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=“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.
[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.
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.
