Let Me Explain Tax Rate/Deduction Cuts

[jwoodie]

With marginal tax rates (FIT, SIT & SS) often approaching 50%, it becomes more beneficial (and easier) to seek additional deductions to taxable income (negative economic decisions) than it does to increase taxable income (positive economic decisions). The rationale behind reducing tax rates AND deductions is not to immediately change government tax revenues, but to encourage positive economic decisions which grow the economy and employ more people. This, in turn, will then have a secondary effect of reducing government expenditures and actually increasing tax revenues. Questions?

 

[NYcarbineer]

With marginal tax rates (FIT, SIT & SS) often approaching 50%, it becomes more beneficial (and easier) to seek additional deductions to taxable income (negative economic decisions) than it does to increase taxable income (positive economic decisions). The rationale behind reducing tax rates AND deductions is not to immediately change government tax revenues, but to encourage positive economic decisions which grow the economy and employ more people. This, in turn, will then have a secondary effect of reducing government expenditures and actually increasing tax revenues. Questions?

Yes.

Is there an economic benefit to tax free municipal bonds? Benefit to the issuer?

 

[jwoodie]

Tax free bonds are a gimmick to shift borrowing costs to other (taxable) investments. They were originally justified because of the extremely long life (50+ years) of the public improvements they financed, but have been misused in more recent times to provide slush funds for special interest groups (e.g., stem cell research) and mask local government budget deficits.

 

[g5000]

With marginal tax rates (FIT, SIT & SS) often approaching 50%, it becomes more beneficial (and easier) to seek additional deductions to taxable income (negative economic decisions) than it does to increase taxable income (positive economic decisions). The rationale behind reducing tax rates AND deductions is not to immediately change government tax revenues, but to encourage positive economic decisions which grow the economy and employ more people. This, in turn, will then have a secondary effect of reducing government expenditures and actually increasing tax revenues. Questions?

Yes.

Is there an economic benefit to tax free municipal bonds? Benefit to the issuer?

The benefit to the issuer is they are charged a lower interest rate by investors than bonds that are taxed.

.

 

[NYcarbineer]

Tax free bonds are a gimmick to shift borrowing costs to other (taxable) investments. They were originally justified because of the extremely long life (50+ years) of the public improvements they financed, but have been misused in more recent times to provide slush funds for special interest groups (e.g., stem cell research) and mask local government budget deficits.

Was that a yes or a no?

 

[NYcarbineer]

With marginal tax rates (FIT, SIT & SS) often approaching 50%, it becomes more beneficial (and easier) to seek additional deductions to taxable income (negative economic decisions) than it does to increase taxable income (positive economic decisions). The rationale behind reducing tax rates AND deductions is not to immediately change government tax revenues, but to encourage positive economic decisions which grow the economy and employ more people. This, in turn, will then have a secondary effect of reducing government expenditures and actually increasing tax revenues. Questions?

Yes.

Is there an economic benefit to tax free municipal bonds? Benefit to the issuer?

The benefit to the issuer is they are charged a lower interest rate by investors than bonds that are taxed.

.

They are of a mutual benefit because they let governments borrow at lower rates and thus save money for the taxpayer and they allow investors with high tax liabilities to collect tax exempt income, albeit at lower interest rates.

 

[Dick Tuck]

With marginal tax rates (FIT, SIT & SS) often approaching 50%, it becomes more beneficial (and easier) to seek additional deductions to taxable income (negative economic decisions) than it does to increase taxable income (positive economic decisions). The rationale behind reducing tax rates AND deductions is not to immediately change government tax revenues, but to encourage positive economic decisions which grow the economy and employ more people. This, in turn, will then have a secondary effect of reducing government expenditures and actually increasing tax revenues. Questions?

You're a lying scumbag. Marginal rates aren't anywhere near approaching 50%.

 

[NYcarbineer]

With marginal tax rates (FIT, SIT & SS) often approaching 50%, it becomes more beneficial (and easier) to seek additional deductions to taxable income (negative economic decisions) than it does to increase taxable income (positive economic decisions). The rationale behind reducing tax rates AND deductions is not to immediately change government tax revenues, but to encourage positive economic decisions which grow the economy and employ more people. This, in turn, will then have a secondary effect of reducing government expenditures and actually increasing tax revenues. Questions?

What does eliminating the mortgage interest deduction discourage or encourage?

What better economic decisions result from eliminating the charitable contribution deduction?