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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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15% corp. tax rate.....okay, larger national debt....., and an import tax.....okay, and

Hey, now we're talk'in.......
---15% corporate tax rate, will "build" shareholder" value won't it??? At least the CEO may get a bit more value for meeting the goals, with high shares prices. Share prices will increase, won't they?
---larger national debt from the 15% corporate tax rate. So, what? Been this way since I was a kid. Just don't let anyone look behind the "curtain of faith in Ozland" and all will be well into the financial infinity.
---import tax, now this surely would stimulate foreign corps. to moving their manufacturing to the U.S., yes? What, you say you don't think so. Well, at least Fed. inflation targets would be met; and Social Security folks would start getting C.O.L.A. raises again. This must be good. Some businesses would have to be renamed, especially those that are "dollar" store types..........like to $5 and $10, due to inflation, eh? Holy crap, I used to shop at a 5 and 10 store...........'cept this indicated 5 and 10 cents.

"And the beat goes on and on and on.............

https://www.washingtonpost.com/business/economy/trump-seeks-15-percent-corporate-tax-rate-even-if-it-swells-the-national-debt/2017/04/24/0c78a35c-2923-11e7-be51-b3fc6ff7faee_story.html?utm_term=.a9eacc1490aa

Have a pleasant and restful evening,
Catch

Comments

  • @catch22- It's only fair to equalize these matters. Now Canada will be equally pissed as Mexico. It's a good thing the other two sides of the US are oceans.

    Besides, anyone building or buying a new house should certainly be able to afford an extra 20% on the lumber for heaven sakes. And US lumber is probably 20% better than Canadian lumber anyway!
  • Hi @Old_Joe
    Living not far from the Canadian border and having visited the country several times over the years and having a "Master Gardeners" certificate from Michigan State University; I consider myself qualified to state that the trees I have checked on either side of the border are very similar in appearance, but perhaps the Canadian soil does have different composition that I am not aware of to cause their trees to be inferior to ours. The "saw" test would be the full proof. But, I have never knowingly sawed Canadian wood.
    I have an advantage with some of this study, as I am fluent in Canadien (salute to the French portion); especially the Ontario dialect and intonation. I can phrase an "aboot" as well as any native citizen.
    I'm now waiting for a border crossing slow down by the truckers. Go, Canada!
    I still prefer my home state maple syrup, although theirs is pretty good, too.
    I'll rate this summary as a 3 smiley face:):):)

    Take care,
    Catch
  • When I hear 15% tax rates are going "generate so much economic activity, the tax collections will actually increase" , I want to barf.

    The Fed kept dropping the interest rate and companies borrowed cheap money on share buybacks to boost stock prices, so executives can enrich themselves, and use it to produce more economic activity.

    Now when companies are going to pay less taxes, they are actually going to boost economic activity with the money they are saving. Really?
  • @MFO Mermbers: Before we pass judgement on the Trump tax plan, lets wait for the details.
    Regards,
    Ted
  • A Washington Post opinion item from a Biden appointee? Pardon me if I don't chalk this up as unbiased and objective.
  • @willmatt72: You make a very valid point, but MFO Members like david moran already have the mind made up and don't want to be confused by the facts.
    Regards,
    Ted
  • Facts? Har, more comedy from Ted. I guess you guys didn't read it (not really an opinion piece), but why is that not surprising? @willmatt72, be sure not to read it, k?
  • @Ted- This administration makes a specialty of confusing facts, if they actually know what the word "fact" means. Which is very doubtful, considering their liberal use of "alternative" (ie: "dubious", to be charitable) facts.
  • Ted said:

    MFO Mermbers: Before we pass judgement on the Trump tax plan, lets wait for the details.

    Isn't "Trump details" an oxymoron? The details will come from Congress, just like the health plan that Trump was going to provide the moment his HHS nominee was approved. And just like AHCA 2.0.
  • http://nymag.com/daily/intelligencer/2017/04/conservatives-angry-media-reports-who-gets-trump-tax-cuts.html

    Lie, lie differently, spin, lie some more, and why?

    Cutting taxes on affluent people has been the Republican Party’s number-one policy objective for more than a quarter-century. Republicans are not merely interested in cutting taxes on the whole, they take special exception to the most progressive ones — which is why they ignore regressive taxes, like the payroll tax, while proposing the deepest cuts for taxation of capital income. They have hewed relentlessly to this goal during recessions and booms, in the minority and in the majority, and they believe in this policy for a combination of moral and economic reasons.
    However, ... this policy is highly unpopular with the public, ....
  • "this policy is highly unpopular with the public"

    Gee, I wonder why?
  • Howdy folks,

    As long as we're at the 'opening position' stage of tax reform a couple of things. For some reason, the republican party has taken this 'never raise taxes' stance that is misplaced at best and dangerous at worst. Here in Michigan, they've pretty much turned this state into a third world country via their incessant tax cuts on corporations and the wealthy. Rubbish. Most people (i.e. voters) will go along with higher taxes IFF they are needed, explained and transparent. It's when any of these three items is missing that they get upset.

    That said, I'd be good with lowering ALL taxes to 15% with a $25,000 personal exemption. However, ALL deductions would be eliminated. Just 15% 'pay at the window'. Yeah, I know all the history of progressive taxes, but in the above case, a family of four wouldn't start paying their 15% until they get to $100,000.

    The problem with our existing system is not the rates - it's the exemptions and deductions that result in an incidence of taxation (what folks and corporations actually pay) that it relative flat other than at the very top and very bottom of the chart where it goes to zero. Er, and it's been that way since I majored in Econ in the 70's.

    and so it goes,

    peace,

    rono
  • msf
    edited April 2017
    It's not that simple, unless you agree with Spicer (or whatever he said for five minutes) that 401k's are not deductible. Likewise employer matches, IRA contributions, HSA contributions, etc. Or are you only talking about "below the line" deductions? That is, are you talking about just the deductions on the back of the 1040, or also the deductions on the front of the form that reduce your AGI?

    How about employee stock options that are granted with a 15% discount (employees are instantly receiving something of non-zero value, even if they don't exercise immediately)? Shouldn't we be counting that as income also? On the business side, no business expense deductions - no deductions for paying employees (or their health insurance), borrowing expenses, etc. Hey, if I can't deduct my margin expenses, why should businesses be able to deduct the interest they pay, or any other expenses they incur to make their money?

    Also, no deductions for capital expenditures. Well, at least that would solve a hot issue of depreciation - if you can't deduct the expenditure, there's no longer a question of whether you deduct it over years or you can deduct it all at once.

    Muni interest becomes taxable, as does 100% of social security. Bye bye to refundable tax credits like EIC that help keep people afloat. You'd have to figure out another mechanism to distribute ACA subsidies, which would be difficult given that they're tied to the level of your income.

    Nor are the effective rates that people pay relatively flat. Here's a CNBC page showing that the bottom 20% pay an effective rate of 1.9%, which shoots up another 10% for the middle quintile, and yet another 10% or more for those above that.
    http://www.cnbc.com/2015/11/11/gop-simple-flat-tax-proposals-simply-do-not-add-up.html

    The top income effective rate might be distorted, depending on how income is defined in this chart. But there's no distortion on bottom earners - they usually don't make use of deductions to reduce their income.
  • edited April 2017
    I'm thinking that no tax cut will be passed without Trump releasing his taxes to show how he will gain by the revised tax policy becoming law.
  • I wrote my post above in a bit of a hurry - had to dash - so I just rattled off a few items that came to mind. There are two almost independent issues:

    1) What is taxable income? Rono is absolutely right here. This is where all the complexity comes in, and if this isn't addressed, you're not even talking about tax reform, just tax rates.

    One can say simply, "let's throw out everything", and severely harm many groups of people (and businesses). That's what I was alluding to with the refundable tax credit examples of EICs and ACA subsidies.

    Or one can say, "Simplification is good. Let's take these out of the tax code, see what we want to do with each preference. If one has merit, let's find some other way of administering it outside of the 1040. Might be feasible (though IMHO things like muni income exemptions best fit with the tax code). Definitely worth the exercise, but it will not happen for at least several more Congressional cycles.

    2) Having figured out what is taxable income, how much do we tax people at different income levels? One tax bracket, three, or twenty, there's no difference in the complexity. For your taxable income, you just look up a line for your bracket.

    This is the flip side of saying that all the complexity is in determining what constitutes taxable income. Complexity doesn't enter into the discussion of whether tax rates should be progressive. It's a red herring here.

  • Wondering where your/my neighbor who is a single parent with 1 teenage dependent; who grosses about $60,000/year, but isn't covered by a company health plan and has to buy in the market place. Their health plans have a $6,500 annual deductible.

    Not directly related to these"pending" changes, but the D.C folks do really fall off of the wagon and have a concussion that affects thinking too many times.
    From the early Affordable Care Act and the "magic" 1099 for everything over $600/year as applied to a "single receiver". Holy crap.......
    Tis the last time I really beat the table with emails and phone calls to the folks who represent this state.

    http://www.journalofaccountancy.com/news/2011/apr/20114071.html
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