Senate passes major tax reform package

Discussion in 'Current Events' started by Mrlucky, Dec 2, 2017.

  1. zbr6

    zbr6 Banned

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    I said that some people are bad with money and that's something that will need to be fixed regardless of what comes next.

    Because here is a simple truth: Raising wages causes a parallel and dependent (although not always) raise in the cost of goods and services overall.

    A farm hand, a truck driver, and a grocery stocker all buy milk and they also all just got a $5 an hour raise.

    The farm hand works for a dairy farmer who just had his COGS go up, the truck driver works for a trucking company that just had its COGS go up, and the grocery stocker works for a grocer that had its COGS go up.

    The farmer, the trucking company, and the grocer negotiate the shift of that extra cost for each of their respective parts in the chain but the end result is always the same: The consumer is the one who will pay for the increase because that is by definition what a consumer is/does.

    So that farm hand, that truck driver, and that grocery stocker take home more money - but neither their buying power nor their ability to accumulate/sustain wealth has been improved.

    And in doing all of this we've created a problem: What do the people who didn't get a raise do now that their milk costs more but their paychecks are the same?

    The only way that simplification would work is if you could convince the farmer, the trucking company, and the grocer not to raise their costs.

    But even then, what if their margins are already razor thin because that's where they have to be to compete?

    Are we to put them out of business, or worse, redistribute more wealth to subsidize them?

    Plus, how do you imagine any of these huge changes are going to take place when the entire foundation of the "lets fix the wealth gap movement" is one fueled by the intense hatred, vitriol, and demagoguery against the very rich people that are being asked to share what they have?
     
  2. nastimarvasti

    nastimarvasti Member

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    So then what would you propose? We’ve had tax cuts before and it didn’t work. There is no proof that companies having more money from tax cuts will reinvest that money. The income gap has gotten worse for 40 years no matter which party was in power. You and I both know that Washington is bought and the wishes of those doing the buying are diametrically opposed to the majority of workers. I’m fairly confident that these policies won’t suddenly make my employer hire the help that they’ve been telling me they’d hire for the last two years, after a worker left and they saw it as an opportunity to save money and work me to death instead.
     
  3. PatriotNews

    PatriotNews Well-Known Member

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    No, you just gave a great reason to lower taxes and regulations. Because wealthy people have incentives to hit up the politicians for special tax breaks and regulations that will exempt them but stifle competition. Take away the tax breaks, lower the taxes, simplify the tax codes, and reduce government regulations and you no longer have incentive to bribe the politicians with campaign donations.
     
  4. Mrlucky

    Mrlucky Well-Known Member Past Donor

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    Most who have a good "work ethic" would naturally want to learn more and work harder so that they CAN succeed. There is little opportunity or incentive for a UNION journeyman in construction trades to do so. It is possible for a union electrician to become a Master electrician and most at that level will normally be retained, but only at a higher union pay scale. Carpenters may become foremen but also normally at no more than the union pay scale. Any person who really excels in a trade can become a job superintendent but at that point he's no longer union. He is management for the construction company.

    I have seen in many cases where other union members will intentionally "slow" anyone who is out performing because he's making other union brothers look bad... and it's against unwritten union rules.

    I have always been on the other side of unions as management representing the owner. I have a high regard for skilled trades people. I myself would not be satisfied with the status quo they accept.
     
    Last edited: Dec 4, 2017
  5. zbr6

    zbr6 Banned

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    I have this story I tell sometimes about being at a trade show while a union fork truck driver was bringing crates to our booth and he left one of the crates about 2 feet off the ground because it was break time.

    He was afraid of being fired for working every 10 seconds into union regulated breaks, sad.
     
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  6. nastimarvasti

    nastimarvasti Member

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    So many problems with this. First, you’re assuming that the super rich would somehow be satisfied after the changes. When and on what planet has that ever happened? These people are addicted to the money. It’s like gambling. You can’t stop. Giving the rich everything they want isn’t the answer. You’ve also now crippled anyone who isn’t wealthy because the ones with all the money are the ones who benefit the most from deregulation. Take the estate tax. It’s there to bring a small amount of fairness to our society so that someone who isn’t born into wealth doesn’t get totally screwed simply because of the luck of the draw. Reducing taxes nets the rich more money than it does the poor and this brings on more inequality. This in turn allows the rich to invest all the extra money they have which will net them even more money which brings on even more inequality and the cycle continues.

    As for competition, the number one thing that’s stifling it is corporations. They buy each other out to the point where we have fewer choices and they easily crush the mom and pop shops.
     
    Last edited: Dec 5, 2017
  7. PatriotNews

    PatriotNews Well-Known Member

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    See, you and I come at this from a completely different perspective.

    The money belongs to them. You are not giving the rich anything, it belongs to them. You don't have to take from them to be fair. And as for the estate tax, what is wrong with them leaving their money to their children or relatives? It's not your business. Many of the wealthy give their money to charities. They become philanthropists. Like the Koch brothers. Like President Donald J. Trump.
     
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  8. Mrlucky

    Mrlucky Well-Known Member Past Donor

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    I have many similar stories. I can't really blame the workers. They are usually very loyal to their unions and their rules.
    Many seem to have a certain 'blue collar' mindset that has been instilled in them from their first days of apprenticeship.
     
  9. nastimarvasti

    nastimarvasti Member

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    Yes, we come from different points of view and that’s fine. That’s what debates are for so I appreciate that.

    We can break this down into several categories but if we’re talking specifically about tax cuts, the money is only theirs because they bought off the politicians. It is completely arbitrary. A local farmer can’t pay off the politicians to pay hardly any tax. The rich don’t work for that money any harder than a teacher works for hers. That is welfare right there. I know some people think everyone should be taxed the exact same amount but that’s like the company raise issue. If you are lucky enough to work for a company that gives raises, most people will generally get a 3-5% raise. That sounds fair on the surface but the guy making $200,000 is going to get way more money than the person making $30,000. That’s a bunch of BS right there. Now, why is it ok to take more from students who barely make any money while lowering the taxes of corporations? How does it help our country to have students who can’t afford to be students? Human beings need each other for survival. Otherwise you’d be out in the wilderness building your fires and hunting for your food all by yourself. We all contribute to the well being of each other.

    With inheritance tax, how is it ok for Paris Hilton’s grandfather to be taxed when he builds the empire but we can’t tax Paris Hilton who has never worked a day in her life? That’s welfare. THAT’S a taker. Again, the estate tax is there to at least marginally level out the playing field. The Koch Brothers and Donald Trump inherited hundreds of millions of dollars through pure luck. Because of that money they started out with, they were able to do whatever they wanted. Trump’s businesses went bankrupt several times. He could afford the mistakes that others couldn’t because of the money daddy left him. People like that, with that much luck and privilege, owe it to society to pay their fair share of taxes. They would not be where they are if they grew up in a broke home. They would still have more money than they could ever spend. Charitable donations are not the same thing. We can go into details about why but I don’t want to get too side tracked.
     
    Last edited: Dec 5, 2017
  10. PatriotNews

    PatriotNews Well-Known Member

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    I'd rather the money be in the hands of a few smart billionaires who will invest it in companies who will hire people who will make products that other people will buy bringing more jobs ect. than have the government confiscate it and squander it, and use their power for tyrannical purposes.
     
  11. nastimarvasti

    nastimarvasti Member

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    The tyranny is already coming from the corporations and their heads who own our government. Also, demand creates jobs. Not supply. The billionaires only invest in more workers when the demand is there. They never create jobs out of thin air. The fewer people with dispensable money, the less likely you’re going to sell your products.
     
    Last edited: Dec 6, 2017
  12. PatriotNews

    PatriotNews Well-Known Member

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    Supply or demand do not create jobs. Businesses and corporations do. Supply and demand are market conditions. You don't increase people's wealth by making others more poor. What creates jobs is capital investment, business innovations and economic growth.
     
  13. Zorro

    Zorro Well-Known Member

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    If they legally earned it, it's theirs!

    Don’t Tune Out ‘What About?’ Maybe you actually are being hypocritical. Cop to it. Learn from it. Get back on topic.

    Last week, as you may have noticed, Republicans passed a tax bill. As you may also have noticed, Democrats were aghast. Passing a bill like that on straight party lines! Using a parliamentary maneuver to push through something that could never have survived a filibuster! How could Republicans be so brazen, so immoral, so fiscally irresponsible?

    Those of us who remembered saying many of the same things during the passage of Obamacare had to beg them to stop. I mean, we could have been seriously hurt, laughing that hard.

    But when I pointed this out, the good citizens of Twitter informed me over and over that this was mere “whataboutism.”

    Claiming “Whataboutism” is just a way to deflect.
     
  14. nastimarvasti

    nastimarvasti Member

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    I couldn’t care less about Dems or Republicans. I hate both parties.

    As for taxes, they legally earned the money and the law is they have to pay taxes. Until they bribe the politicians to pay less. The average person doesn’t have that power so I don’t see how you can defend that.
     
    Last edited: Dec 9, 2017
  15. Zorro

    Zorro Well-Known Member

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    I don't. Bribery should result in jail terms and the stripping of pensions.

    Senate Bill’s Marginal Rates Could Top 100% for Some.

    Some high-income business owners could face marginal tax rates exceeding 100% under the Senate’s tax bill, far beyond the listed rates in the Republican plan.

    That means a business owner’s next $100 in earnings, under certain circumstances, would require paying more than $100 in additional federal and state taxes.

    The possible marginal tax rate of more than 100% results from the combination of tax policies designed to provide benefits to businesses and families but then deny them to the richest people. As income climbs and those breaks phase out, each dollar of income faces regular tax rates and a hidden marginal rate on top of that, in the form of vanishing tax breaks. That structure, if maintained in a final law, would create some of the disincentives to working and to earning business profit that Republicans have long complained about, while opening lucrative avenues for tax avoidance.

    Consider, for example, a married, self-employed New Jersey lawyer with three children and earnings of about $615,000. Getting $100 in business income beyond that amount would force the lawyer to pay $105.45 in federal and state taxes, according to calculations by the conservative-leaning Tax Foundation. That is more than double the marginal tax rate that household faces today.

    If the New Jersey lawyer’s stay-at-home spouse wanted a job, the first $100 of the spouse’s wages would require $107.79 in taxes. And the tax rates for similarly situated residents of California and New York City would be even higher, the Tax Foundation found. Analyses by the Tax Policy Center, which is run by a former Obama administration official, find similar results, with federal marginal rates as high as 85%, and those don’t include items such as state taxes, self-employment taxes or the phase-out of child tax credits.

    Marginal tax rates are different from average tax rates. A marginal rate is the tax on the edge, or margin, of one’s earnings, and so it reflects what would be the next dollar of income. The average rate is a way of measuring a taxpayer’s total burden.

    The Republican bills are trying to reduce both marginal and average tax rates, and for many taxpayers, they do. The marginal tax rates above 100% affect a small slice of households with very particular circumstances. Similar, though smaller, effects occur throughout the tax system.

    “This is a big concern,” said Scott Greenberg, a Tax Foundation analyst. “It would be unfortunate if Congress passed a tax bill that had the effect of making additional work and additional income not worthwhile for any subgroup of households.”

    Here’s how that New Jersey lawyer’s marginal rate adds up to more than 100%:

    The household is paying the 35% marginal tax rate on their income range. Or, they are paying the alternative minimum tax, which operates at the same marginal rate in that income range.

    The household is paying New Jersey’s highest income-tax rate, which is 8.97%, and now has to pay all of that because the Republican tax plan wouldn’t let such state or local taxes be deducted from federal income.

    The household is also losing a deduction the Senate created for so-called pass-through businesses such as partnerships and S corporations. That 23% deduction is fully available to owners of service businesses like law firms, but only if income is below $500,000 for a married couple.

    The deduction then phases out over $100,000 in income, according to a complex formula, disappearing entirely once income reaches $624,000. Up to that point, each additional dollar of business income faces progressively steeper tax rates because the deduction and its benefit are shrinking rapidly as income goes up.

    The provisions also interact with each other in ways that drive up marginal rates. “The central problem here is that there is a large benefit phasing out over a short range,” Mr. Greenberg said.

    The Republican bill doubles the child tax credit to $2,000 but phases it out beginning at $500,000 income for joint filers. The credit shrinks by $50 for every $1,000 in income above that, so a married couple with three children faces a higher marginal tax rate when they’re in that phase-out range.

    The analysis assumes that the New Jersey lawyer is paying a 3.8% tax on self-employment income.

    Pushing marginal rates lower on these households wouldn’t be easy and would require tradeoffs. Republicans could make the phaseout of the business deduction more gentle, spreading it over, say, $200,000, as opposed to $100,000, of income above $500,000. But that would make the tax cuts bigger, and Republicans are already looking for money to offset other changes they are planning.

    They could lower the threshold for the child tax credit, but that would reduce tax cuts for households below $500,000.

    Under current law, there are some high marginal tax rates for some lower-income households. Some families just above the poverty line can see their earned income tax credits and food stamps going down as their federal and state taxes go up. That combination can create marginal tax rates of around 75%, according to the Congressional Budget Office.

    https://www.wsj.com/articles/the-ta...ginal-rates-could-top-100-for-some-1512942118
     
  16. Zorro

    Zorro Well-Known Member

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    Getting close!

    The substantial lowering of the corporate tax rate, was recently proposed by Barack Obama himself. But he's a talker and Trump's a doer!
     

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