from Republicans. Trump’s Republican Party is the most awful group of people I’ve ever seen. It’s Ayn Rand in fruition.
After this tax bill, I never want to hear a thing about fiscal responsibility again.
- Thread starter DrHoops
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I agree this bill has nothing to do with fiscal responsibility. But I will give the Republicans some credit, they eliminated most of the stupid stuff. I am talking of the 401k restrictions, the two anti-student provisions, and most of the blue state retributions.
This bill could have been far worse.
Fiscal responsibility, personal responsibility, the sanctity of marriage, family values, respect for the military...they’ve outed themselves on the principles they’ve pretended to have all these years.
You sure about that?
Tax experts are predicting this law will incentivize moving more jobs out of the country.
In the future, corporations would be required to pay about a 10 percent minimum tax on overseas income above a certain level. The provision is billed as a way to discourage the movement of jobs and profit overseas. But the fine print of the new global minimum tax would make the problem worse, several tax specialists said.
“The overall effects of this are going to be unambiguously bad for the workers that it’s ostensibly designed to help,” Clausing said.
This is what happens when politicians rush a complicated bill through without careful deliberation. Tax and business experts will game the new law in every way possible. That's the American ways. There will probably be zillions of way, here are just three:“The overall effects of this are going to be unambiguously bad for the workers that it’s ostensibly designed to help,” Clausing said.
There are three reasons, according to nonpartisan tax experts. First, a corporation would pay that global minimum tax only on profit above a “routine” rate of return on the tangible assets — such as factories — it has overseas. So the more equipment a corporation has in other countries, the more tax-free income it can earn. The legislation thus offers corporations “a perverse incentive” to shift assembly lines abroad, said Steve Rosenthal of the Tax Policy Center.
Second, the bill sets the “routine” return at 10 percent — far more generous than would typically be the case. Such allowances are normally fixed a couple of percentage points above risk-free Treasury yields, which are currently around 2.4 percent.
As a result, a U.S. corporation that builds a $100 million plant in another country and makes a foreign profit of $20 million would pay roughly $1 million in tax versus $4 million on the same profit if earned in the United States, said Rosenthal, who has been a tax lawyer for 25 years and drafted tax legislation as a staffer for the Joint Committee on Taxation.
Finally, the minimum levy would be calculated on a global average rather than for individual countries where a corporation operates. So a U.S. multinational could lower its tax bill by shifting profit from U.S. locations to tax havens such as the Cayman Islands.
Disclaimer: I'll be riding high on the new tax law.Second, the bill sets the “routine” return at 10 percent — far more generous than would typically be the case. Such allowances are normally fixed a couple of percentage points above risk-free Treasury yields, which are currently around 2.4 percent.
As a result, a U.S. corporation that builds a $100 million plant in another country and makes a foreign profit of $20 million would pay roughly $1 million in tax versus $4 million on the same profit if earned in the United States, said Rosenthal, who has been a tax lawyer for 25 years and drafted tax legislation as a staffer for the Joint Committee on Taxation.
Finally, the minimum levy would be calculated on a global average rather than for individual countries where a corporation operates. So a U.S. multinational could lower its tax bill by shifting profit from U.S. locations to tax havens such as the Cayman Islands.
Do you want to hear about fiscal responsibility from Democrats?
Both parties talk about it when they're out of power. Both parties suck at it when they're in power.
Hopefully Paul Ryan can redeem himself by getting busy on entitlement reform next year. But I'm not holding my breath.
Why is there any disparity at all between tax rates of two types of corporate entities?
I think having the two types is increasingly obsolete, myself.
I don’t understand your question. There are very fundamental differences between C corps and pass throughs.
The 1994 election was a sweeping victory by Republicans. They took control of Congress after 50 or 60 years of Democratic control. It was the first election in my lifetime that I went all Republican and the first when I considered myself a Republican, although I shifted my registration to Republican in 1996. The Republicans managed this mostly because they focused on fiscal issues and listening to the will of Americans. The Contract with America embodied that by focusing largely on that rather than social issues. Republicans campaigned on fiscal responsibility to include a goal of achieving a balanced budget - and they were elected, followed through on the promise, and achieved it.
I think Republican politicians, in general, slowly lost their way after that. While I support some of the tax bill, such as the reduction in corporate taxes and simplifying some tax law, it should have been revenue neutral and to make it so I would have been more than OK with raising the top rates. That might have meant me too, depending which brackets they raised, but I would be good with it.
Also, though “fiscal responsibility” hasn’t generally been a Democratic priority in recent years, and Republicans of the past 10 to 15 years have generally given it mostly lip service, not parties better start taking it seriously. We have unsustainable policies that require reform or we will reach that proverbial fiscal cliff.
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Where is the Tea Party? What a bunch of bought losers. Deficits are fine when you are giving tax breaks to the rich and buying bombs not so much when it benefits the people. They have a good marketing strategy of exploiting the poor dumb people. Money, Guns, and bullshit religion rhetoric wins. Pathetic.
You said there were some fundamental differences and I also would like to hear them. From my perspective, the two best aspects of the bill were the corporate tax reduction and the pass through change. Those both had bipartisan support in recent years - though it won’t show in the voting for the bill as Democrats are united in opposition to the whole (and I think they have good reasons to oppose, by the way).
Where is the Tea Party? Well, there's no longer a black Kenyan Muslim socialist in the White House for them to oppose at every turn or run their mouths about. Now that they might actually have to govern instead of acting like paranoid racist idiots, they're totally lost.
I’m going to assume you both know how the different Corp entities are taxed.
Aside from that, corporate form election is up to the owners. If you want taxed at the corp level and then pay shareholders dividends, become a C. If you want the corp income to flow to the owners directly, become a pass through and pay income tax rates. The owners make the choice. If they don’t like it, change. It’s easy to do.
This further conflates how we tax income. You’re a working stiff, we go through the brackets. You’re making money selling stock, capital gains. Now we have another different way we tax income. Pass through owners get to chop off 20% for no real reason. If the reason Is that the GOP slashed the C corp rate, great. Change the entity form. Problem solved.
Aside from that, corporate form election is up to the owners. If you want taxed at the corp level and then pay shareholders dividends, become a C. If you want the corp income to flow to the owners directly, become a pass through and pay income tax rates. The owners make the choice. If they don’t like it, change. It’s easy to do.
This further conflates how we tax income. You’re a working stiff, we go through the brackets. You’re making money selling stock, capital gains. Now we have another different way we tax income. Pass through owners get to chop off 20% for no real reason. If the reason Is that the GOP slashed the C corp rate, great. Change the entity form. Problem solved.
Typically, the only difference has been size -- as determined by the number of shareholders. I wouldn't call that a "fundamental difference" -- not, anyway, one that would justify disparate rates of taxation.
It didn't last long, and had little to do with "fiscal responsibility". It was a populist revolt against the Wall Street bailouts (and auto company bailouts to a lesser extent). Then it got co-opted by the right wing anarchists ("Drill, Baby, Drill!"). And then, the movement that started out as the Tea Party ended up electing Trump. If you want to blame Trump on someone, look back at GWB and Hank Paulson.
Like any business/budgetary planning, you look at its assumptions first and foremost.
This plan has an assumption that the economy will grow at a steady rate of 2.9% for the next ten years.
Talk about delusional. No economic/business cycles?
These guys couldn't borrow 10bucks from the local bank manager, never mind raise capital for their own company. I would have been laughed out the room.
Who was the last POTUS with a balanced budget. After Clinton, who shrink the deficit significantly?
This is a long way of saying YES, I’d like to hear about fiscal responsibility from the only party that is fiscally responsible.
This is a long way of saying YES, I’d like to hear about fiscal responsibility from the only party that is fiscally responsible.
Pfft, the dotcom bubble fueled a temporary burst of tax revenue.
That wasn't fiscal responsibility. Even if it was -- which it wasn't -- we had divided government at that time. Are you saying that Gingrich & Co. were fiscally responsible, too?
Here's the deficit during and shortly after the Clinton presidency.
According to you, nothing was happening to the deficit until the dotcom bubble of 1997-2001. Predictably, that's not what the data show. One thing that happened before the dotcom bubble? The 1993 Clinton tax hikes that every Congressional Republican voted against.
Yeah, yeah, yeah. There is always some excuse by Republicans as to why Democratic Presidents are better stewards of the economy than their colleagues across the aisle.
We don't know exactly why, but over the last 16 presidential terms, the economy has performed substantially better with a Democrat in the White House. Obviously there's a lot more to it than that, but it's striking just how little evidence supports Republican claims that their policies are better for the economy. I'd love to see someone try to prove that.
Here's the deficit during and shortly after the Clinton presidency.
According to you, nothing was happening to the deficit until the dotcom bubble of 1997-2001. Predictably, that's not what the data show. One thing that happened before the dotcom bubble? The 1993 Clinton tax hikes that every Congressional Republican voted against.
Even left-wing economist Dean Baker -- who runs a labor-affiliated thinktank that counts Stiglitz as one of their economic advisors -- calls this explanation "sanctimonious garbage." According to his data, legislative changes actually worked against the budget's ephemeral balance.
As the chart shows, all of the improvement in the budget between 1996 and 2000 was due to the fact that the economy performed much better than expected and that CBO had been overly pessimistic about trends in government spending and tax collections. The legislative changes added by Congress in this period actually went the wrong way. So, we did not actually move from large deficits to surpluses by tax increases and/or spending cuts, we did it through a strong economy and some good luck with the cost of government programs and tax collections. (The biggest part of this picture is that Alan Greenspan ignored the orthodoxy in the economics profession and allowed the unemployment rate to decline by almost 2 percentage points below the conventionally accepted estimates of the NAIRU*, but we won't talk about that.)
Rockfish's point is that the claim by Repubs to care about deficits of debt is disingenuous. GOP administrations produce more debt and higher deficits than Democratic admins. We are in the midst of the Obama recovery. The proper approach now would be to raise revenues and reduce debt. The approach taken is the opposite.
It’s very interesting how much credit or blame people give Presidents for the economy, deficits or surpluses (which almost never happen) and debt. Presidents don’t, and can’t, spend funds not authorized and appropriated by Congress - and appropriation bills must start in the House. Congress clearly deserves more of the credit/blame than the President. However, if you want to blame or credit Presidents, I suppose President Obama is personally responsible for essentially doubling the debt while in office.
I agree it’s time to reduce debt by increasing revenues and cutting some spending.
Here's what Baker said in your linked piece was "sanctimonious garbage":
There is an incredible amount of sanctimonious garbage going around Washington about the horrors of the deficit and the debt.
He said that in April 2011, when you were arguing for austerity because the deficits were too big. He was talking about people like you, so it's amusing you try to throw him at me.
You claimed that Bill Clinton didn't care about fiscal discipline, and we only got a surplus because of the dotcom bubble. Both statements are false, and Baker doesn't say otherwise. In fact, he says what I say (in part because I read a fair amount of what he writes).
The piece you link proceeds in its assessment from 1996 (the end of Clinton's first term). Given where we were then, Baker argues, the dotcom bubble was sufficient to drive the budget into surplus. But we were where we were then because (as Baker explains in an academic paper) the deficit had steadily been shrinking during Clinton's first term:
When President Clinton came into office in 1993 he had two conflicting agendas that he had promised to pursue. The first was his “public investment” agenda, centered on promoting investment in infrastructure, research and development, and education and training. This position was most strongly identified with Labor Secretary Robert Reich. The second agenda was deficit reduction – the belief that the top priority must be to reduce the deficit to a sustainable level, if not eliminate it altogether. This position was most strongly associated with then Treasury Secretary Lloyd Bentsen and Robert Rubin, the head of Clinton’s National Economic Council.
Clearly it was not possible to both promote substantial increases in public investment and reduce the deficit at the same time. After the defeat of a modest stimulus package in the summer of 1993, the main focus of Clinton’s economic policy through the rest of his administration was the reduction of the deficit. As the deficit shrank more rapidly than had been anticipated, the goal shifted to a balanced budget and later to paying off the national debt. Throughout this process, public investment took a back seat, with most categories of public investment no higher (measured relative to the size of the economy) at the end of Clinton’s administration than at the beginning.
The rapid decline in the deficit was partly due to tax increases and spending restraint, and partly to an unexpected surge in tax revenue. In fiscal 1992, the last full fiscal year before President Clinton took office, the deficit was $290.4 billion or 4.7 percent of GDP. The deficit in 1997, the last budget prepared in his first term in office, was just $22.0 billion, or 0.3 percent of GDP. In 2000, the surplus peaked at $236.4 billion, an amount equal to 2.4 percent of GDP.
As this excerpt demonstrates, you're not just getting the details wrong here. You're getting the big picture wrong too. Clinton absolutely did care about fiscal discipline. In hist first term (before the dotcom bubble), the deficit shrank from 4.7 percent of GDP to 0.3 percent of GDP. From Baker's perspective (and mine) Clinton was way too enthused about a balanced budget and way too supportive of Rubinite fiscal and financial policies. The ultimate results, Baker argues, were lousy, and Democrats shouldn't think fondly of those days.Clearly it was not possible to both promote substantial increases in public investment and reduce the deficit at the same time. After the defeat of a modest stimulus package in the summer of 1993, the main focus of Clinton’s economic policy through the rest of his administration was the reduction of the deficit. As the deficit shrank more rapidly than had been anticipated, the goal shifted to a balanced budget and later to paying off the national debt. Throughout this process, public investment took a back seat, with most categories of public investment no higher (measured relative to the size of the economy) at the end of Clinton’s administration than at the beginning.
The rapid decline in the deficit was partly due to tax increases and spending restraint, and partly to an unexpected surge in tax revenue. In fiscal 1992, the last full fiscal year before President Clinton took office, the deficit was $290.4 billion or 4.7 percent of GDP. The deficit in 1997, the last budget prepared in his first term in office, was just $22.0 billion, or 0.3 percent of GDP. In 2000, the surplus peaked at $236.4 billion, an amount equal to 2.4 percent of GDP.
Bill Clinton supported fiscal austerity and financial deregulation. Baker argues that he was wrong about both, and we shouldn't replicate those policies today. He disagrees with your claim that Clinton's fiscal policies were irrelevant.
Apart from that, though, good find.
Also that crazed doesn't know what he's talking about and that the Republican "you guys are no better than we are" defense is false.
I always liked listening to people say both teams are shitty and corrupt, yet they still prefer one over the other.
I know we don’t have a final bill/law yet, but does anyone know whether the current version is expected to be applied for the first time to the 2017 or 2018 tax year?
Sure. Will you do the same?
Can you tell us ANY system with ANY President and ANY tax rates where the poor will be successful?
It’s one thing to be a troll. It’s another thing to be a bad one.
Republicans will again become the party of fiscal conservatism in an effort to reduce the projected deficits resulting from their "tax reforms". The Pubs will then stomp for entitlement reforms (i.e., cuts).
As a result, state governments concerned about the environment, children in poverty, infrastructure, education, job training and other social problems will have to pick up the slack. Increases in state and local taxes will eat up any cuts for lower income folks which resulted in the "tax reform" being discussed in this thread. Also many states will do nothing, and their people will suffer in the short and long run..
It will of course be argued that the "tax reforms" will generate sufficient growth in the GDP that all boats will rise across the entire nation, and none of my fears will occur. Yep, some boats will rise and some parts of the country will benefit, but more people and more parts will lose ground.
As a result, state governments concerned about the environment, children in poverty, infrastructure, education, job training and other social problems will have to pick up the slack. Increases in state and local taxes will eat up any cuts for lower income folks which resulted in the "tax reform" being discussed in this thread. Also many states will do nothing, and their people will suffer in the short and long run..
It will of course be argued that the "tax reforms" will generate sufficient growth in the GDP that all boats will rise across the entire nation, and none of my fears will occur. Yep, some boats will rise and some parts of the country will benefit, but more people and more parts will lose ground.
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