The GOP claims that the US is one of the most highly taxed nations on earth, but of course the deficit seems to suggest otherwise. Regardless the plan now that they've stolen every branch of government is to get on with reforming the US's massive tax code.

This will be the big test of John Kelly's new role in the west wing, and his new method of making sure that the big boss doesn't get lost in the weeds as people keep feeding him new and conflicting info on a regular basis...

http://www.cnn.com/2017/08/25/politi...est/index.html


So...anyone think they can do it?

This should be a slam dunk since Trump had such a great, simple system to implement.

That of course means they'll sit around doing nothing and maybe manage to cut taxes on high earners.

Honestly I think they'll be able to do it. At least I'd put the chances at much higher than health care. The one unifying principle of the Republican Party is tax cuts for the rich. If they can't pull it off they might as well just call themselves the White Grievance Party and shunt all the policy wonks.

I'm very skeptical about tax reform this year. Basically there are a lot of different constituencies with different pet ideas, and there's no one in Congress or certainly the WH with the ability to get people on board with an actual plan written in legislative language.

I assume a tax cut needs to be budget neutral to skirt filibusters, right?

I think that's just for reconciliation.

If they stick to corporate tax cuts and leave medicare and everything else alone, I think they could get it done.

That is just for reconciliation, but you can't get around the filibuster without reconciliation. The technical requirement is that any impact on the deficit be confined to the 10-year budget scoring window, so you could theoretically sunset a straight tax cut after 10 years (similar to the Bush tax cuts). I once read somewhere that there's some kind of technical issue with using the sunsetting approach to corporate taxes (somehow the deficit impact leaks outside the window), but I couldn't understand it and haven't seen that concern referenced elsewhere, so who knows?

Is this the correct place to congratulate the legions of humble, working class heartland Middle America Trump voters on soothing their economic anxieties by electing Trump?



Oh but now they'll get to file their taxes on a Paul Ryan Postcard which is a hugely stark departure from the tortures of having to fill out the 1040EZ, so it was all worth it, three cheers for the GOP's working class pivot.

I'm going to go insane reading about all of the horrible tax proposals.

So far:

1) "Super wonk" Paul Ryan and his moronic idea of a postcard-sized tax return. Surprise, idiot, this already exists - it's the 1040EZ.
https://www.vox.com/policy-and-polit...ard-tax-return

2) "Simplifying" the tax code by reducing the number of tax brackets/rates. This is dumb because the tax tables literally do this calculation for you. And if you're using a computer program (even Excel), increasing the number of tax brackets adds ~zero difficulty or complexity. Defining income is hard. Multiplying by a tax rate is easy.

3) Taxing 401k contributions up front. I'll admit - this one caught me completely by surprise. http://www.politico.com/story/2017/0...rm-plan-241873
I have no idea how this will get any support anywhere. And it's just a gimmick - it increases taxes now at the expense of lower taxes later.



Actual good tax reforms they could implement, but won't:
1) Capping/ending the mortgage interest deduction.
2) Taxing employer-paid healthcare premiums.

Why is taxing employer paid health premiums a good idea?

LOL media EVERY ****ING TIME

Yeah idiots, let's focus the debate on "fiscally responsible" bull**** like taxing 401k contributions. The ballgame has always been robbing everyone else to give money to billionaires. JFC

Because it's treating two forms of compensation in completely different ways, without any good reason:

You get paid a combination of salary and healthcare benefits. The salary is taxed, but the healthcare benefits (i.e., the premiums paid by your employer for your benefit) are not taxed, even though they represent a benefit to you.

This encourages firms to provide more comprehensive/expensive healthcare packages than employees would choose to buy on their own, plus the tax benefit accrues to the wealthiest (who receive the most comprehensive/expensive benefits and would be taxed at a higher rate on those benefits).

http://www.taxpolicycenter.org/brief...insurance-work

It's not if you work for the gov't or anyone of the construction unions.

This is so weird, wouldn't this make 401ks the same as Roth IRAs? And wouldn't it hurt workers now who are presumably making more money now than they plan on withdrawing yearly in retirement?

It's not obvious to me if it's:
A) Remove tax-deductibility of 401k contributions, the end. 401k account withdrawals are taxed as ordinary income.
B) Remove tax-deductibility of 401k contributions, but make withdrawals tax free.

Option A turns 401k into normal, non-sheltered after-tax accounts, with absolutely no incentives to use them vs. a normal account, but with the restrictions that make that money less available than normal after-tax accounts.

Option B turns them into Roth IRAs. Which may be better or worse depending on whether you think your current tax rates are higher than they will be when you withdraw money. (If current rates higher, then current deductions are more valuable and you'd prefer 401k-type treatment.)

Like, this proposal is so stupid and will be so obviously unpopular that I don't actually believe that it will ever show up in any actual bill ever.

It would make it a roth 401k. Mathematically it would be the same even if you withdraw slowly as eventually you or your survivor will need to withdraw it all.

Problem is that the lack of tax relief on 401k now will discourage middle class workers from saving, imo.

It wont affect the wealthy one bit as taxes on 18,000 a year is a pittance.

I have to imagine it's B), because A) is too stupid for words and would also make it nonsensical to call it a "gimmick" or "short-term" (A would be neither of those, it would just be a massive tax increase).

I dont see how his tax cuts are ever possible without a massive reduction of defense/social budgets , which will in turn hurt the same corporations that would be enjoying the tax cut.

But A) is how you balance the revenue impacts from other tax cuts you plan to give to zillionaires. The zillionaires don't give a **** about the tax free 401k contributions. Under Republicans of yore, say 10 years ago, they'd just do deficits but they have some hardcore ideologues now who really want to pay for those tax cuts. Gotta get the money somewhere.

When the average person nearing retirement (+55) has less than 200k in their 401k should we really be discouraging them from saving more?

They'll cut social funding for sure but defense will be propped up because we're back to a "deficits don't matter" administration.

Even if it is B, people are going to lose a lot of trust of the govenment. There is a reason to stay tax diversified and not put everything in to ROTH currently, because you never know what government policy changes come 20/30 years down the line.

Yet again: if you're part of the mega wealthy, why should the government be encouraging saving at all? Keep people working, keep people spending, tax the wealthy less. Isn't that like the absolute ideal for them? ldo institutional 401k money has been pretty good for equities in the US so it's a little complicated. But it's not obvious that comfortable middle class retirements benefit the super rich.

Huh?