Lowering Corporate Tax Rates The Coward’s Way

[bendog]

Trumpbots, grease up and bend over.

Ryan likely to get rolled on tax reform

Under the Senate’s complex reconciliation rules, legislation that’s fast-tracked must not add to the deficit in the long term, which is defined as anything beyond a 10-year window. That’s why Ryan and his team are so focused on making sure any proposal is paid for.

 

[g5000]

As I have explained many times, every time you give a special interest a tax break, someone else has to make up the difference. This is achieved by raising tax rates on everyone. So even the lobby that got the tax break now has a higher tax rate, along with everyone else.

However, if we raised tax rates high enough to pay for the $1.4 trillion of them that are given out each year, the American people would revolt. So tax rates are raised to a barely tolerable level, and then the rest is borrowed.

And that is how we got to $19 trillion in debt and a 39.1% corporate tax rate.

As I have explained many times, if you get rid of all these government gifts to all these special interests, you could substantially lower tax rates. And you get the extra bonus of everyone being on a level playing field. Entities which earn identical incomes would pay identical taxes.

Instead, we have an insane system where entities which earn identical incomes pay radically different taxes.

Enter the House Ways and Means Committee, chaired by Kevin Brady. This committee came up with a plan to do just what I have been saying for years. They came up with a plan to lower the corporate tax rate substantially by getting rid of all those government giveaways.

Their original plan was simple. Get rid of all the special interest deductions, credits, and exemptions.

Guess what? Those special interests are so powerful that this turned out to be impossible. Our Congress is now completely owned, boys and girls, and it is long past time to wake the fuck up to this fact.

You simply must wake up. Anyone who defends $1.4 trillion of thievery is on the wrong side, and yet we are burdened with pseudocons who do just that. They defend deductions, credits, and exemptions which add up to $1.4 trillion like they are welfare queens.

They have been fed a lie that these tax expenditures mean they get to keep more of their own money. This is a giant lie. A YUGE lie.

As it happened, every time the House Ways and Means committee tried to take away all those special interest tax breaks, the special interests forced them back in. Which then forced the House Ways and Means to raise tax rates back to 39.1%.

Impasse.

So House Ways and Means came up with Plan B: The border adjustment tax. It’s real name is a “destination-based cash flow tax”, but the colloquial term is border adjustment tax.

The border adjustment tax is, very basically, an import tax. Even better, it’s a consumption tax. The corporate tax is a tax on production.

All of our allies have a border adjustment tax. We don’t. We’ve been living on that unlevel playing field forever. Now that House Ways and Means introduced the idea of the US moving to one, our allies are screaming at how unfair it would be for us to have the same kind of import tax they do!

Go figure.

We can get into the pluses and minuses of a border adjustment tax a little later. But for now, here’s how the GOP plan was going to work.

Since the special interests refused to give up their special tax breaks, the GOP decided to leave them in.

Since the special interests want their cake and to eat it, too, they also got the corporate tax rate lowered. To somewhere around 15%.

Because of this, all the lost revenue due to the tax breaks was no longer made up for by the 39.1% tax rate. So House Ways and Means intended to make up the lost revenues with the Border Adjustment Tax.

Enter Trump.

Donald Trump was “ambivalent”, at best, about the Border Adjustment Tax. And now he has decided he is against it.

So bye-bye Border Adjustment Tax.


But…he is keeping the lower corporate tax rate AND all those special interest tax breaks. And that means, boys and girls, a gigantic spurt in national debt if the Trump way comes to pass.


This is a total cop-out. It is the coward’s way out, and every fiscal conservative should be vehemently opposed to this.

There are 2 sides to every equation, and you are addressing the revenue side of the debt equation. The spending side is at least as treacherous as the revenue side. We have a national debt in excess of $19 trillion. Congress, be they left or right, has shown they are unable to control spending. If the government stole all the wealth of the 400 riches Americans, they would only pay down the debt about 12%. The reality is there is a limit to how much you can tax, and the spending limit is well beyond the taxing limit.

You don't understand.

Tax expenditures ARE spending!

That's why they are called tax expenditures.

They are the largest part of the budget. By far.

You see, after our government has spent all that money on roads and defense and puppies for hookers and Social Security and whatnot, it then spends an additional $1.4 trillion on tax expenditures.

So you go right ahead and cut spending for roads and defense and puppies for hookers, but you have barely scratched the surface. You haven't even touched the $1.4 trillion of tax expenditures.

So you idiot want to spend 17 trillion to make 1,4 trillion?

No. Where the living hell did you get that idea?

 

[Rustic]

As I have explained many times, every time you give a special interest a tax break, someone else has to make up the difference. This is achieved by raising tax rates on everyone. So even the lobby that got the tax break now has a higher tax rate, along with everyone else.

However, if we raised tax rates high enough to pay for the $1.4 trillion of them that are given out each year, the American people would revolt. So tax rates are raised to a barely tolerable level, and then the rest is borrowed.

And that is how we got to $19 trillion in debt and a 39.1% corporate tax rate.

As I have explained many times, if you get rid of all these government gifts to all these special interests, you could substantially lower tax rates. And you get the extra bonus of everyone being on a level playing field. Entities which earn identical incomes would pay identical taxes.

Instead, we have an insane system where entities which earn identical incomes pay radically different taxes.

Enter the House Ways and Means Committee, chaired by Kevin Brady. This committee came up with a plan to do just what I have been saying for years. They came up with a plan to lower the corporate tax rate substantially by getting rid of all those government giveaways.

Their original plan was simple. Get rid of all the special interest deductions, credits, and exemptions.

Guess what? Those special interests are so powerful that this turned out to be impossible. Our Congress is now completely owned, boys and girls, and it is long past time to wake the fuck up to this fact.

You simply must wake up. Anyone who defends $1.4 trillion of thievery is on the wrong side, and yet we are burdened with pseudocons who do just that. They defend deductions, credits, and exemptions which add up to $1.4 trillion.

They have been fed a lie that these tax expenditures mean they get to keep more of their own money. This is a giant lie. A YUGE lie.

As it happened, every time the House Ways and Means committee tried to take away all those special interest tax breaks, the special interests forced them back in. Which then forced the House Ways and Means to raise tax rates back to 39.1%.

Impasse.

So House Ways and Means came up with Plan B: The border adjustment tax. It’s real name is a “destination-based cash flow tax”, but the colloquial term is border adjustment tax.

The border adjustment tax is, very basically, an import tax. Even better, it’s a consumption tax. The corporate tax is a tax on production.

All of our allies have a border adjustment tax. We don’t. We’ve been living on that unlevel playing field forever. Now that House Ways and Means introduced the idea of the US moving to one, our allies are screaming at how unfair it would be for us to have the same kind of import tax they do!

Go figure.

We can get into the pluses and minuses of a border adjustment tax a little later. But for now, here’s how the GOP plan was going to work.

Since the special interests refused to give up their special tax breaks, the GOP decided to leave them in.

Since the special interests want their cake and to eat it, too, they also got the corporate tax rate lowered. To somewhere around 15%.

Because of this, all the lost revenue due to the tax breaks was no longer made up for by the 39.1% tax rate. So House Ways and Means intended to make up the lost revenues with the Border Adjustment Tax.

Enter Trump.

Donald Trump was “ambivalent”, at best, about the Border Adjustment Tax. And now he has decided he is against it.

So bye-bye Border Adjustment Tax.


But…he is keeping the lower corporate tax rate AND all those special interest tax breaks. And that means, boys and girls, a gigantic spurt in national debt if the Trump way comes to pass.


This is a total cop-out. It is the coward’s way out, and every fiscal conservative should be vehemently opposed to this.

An insanely high corporate tax rate that we happen to have now, along with the stupidity of capital gains tax makes for a weak economy… Fact

G lives in the classic liberal lala land where money is finite. If the gubmint don't get this $, then it has to get that $. They don't understand t hat taking a $ from an entity that does nothing but spend it, and giving it to entity t hat will grow it is a +. What generates more taxes, $1 or $5?

Soggy, you have always spoken from a place of deep and willful ignorance. You don't even realize how badly you are exposing your ignorance of this issue.

The country basically is in 225+ trillion dollars of debt, less people are putting in less and more people are taking more out of socialist entitlement programs where do you think this is going to lead?

 

[bendog]

As I have explained many times, every time you give a special interest a tax break, someone else has to make up the difference. This is achieved by raising tax rates on everyone. So even the lobby that got the tax break now has a higher tax rate, along with everyone else.

However, if we raised tax rates high enough to pay for the $1.4 trillion of them that are given out each year, the American people would revolt. So tax rates are raised to a barely tolerable level, and then the rest is borrowed.

And that is how we got to $19 trillion in debt and a 39.1% corporate tax rate.

As I have explained many times, if you get rid of all these government gifts to all these special interests, you could substantially lower tax rates. And you get the extra bonus of everyone being on a level playing field. Entities which earn identical incomes would pay identical taxes.

Instead, we have an insane system where entities which earn identical incomes pay radically different taxes.

Enter the House Ways and Means Committee, chaired by Kevin Brady. This committee came up with a plan to do just what I have been saying for years. They came up with a plan to lower the corporate tax rate substantially by getting rid of all those government giveaways.

Their original plan was simple. Get rid of all the special interest deductions, credits, and exemptions.

Guess what? Those special interests are so powerful that this turned out to be impossible. Our Congress is now completely owned, boys and girls, and it is long past time to wake the fuck up to this fact.

You simply must wake up. Anyone who defends $1.4 trillion of thievery is on the wrong side, and yet we are burdened with pseudocons who do just that. They defend deductions, credits, and exemptions which add up to $1.4 trillion like they are welfare queens.

They have been fed a lie that these tax expenditures mean they get to keep more of their own money. This is a giant lie. A YUGE lie.

As it happened, every time the House Ways and Means committee tried to take away all those special interest tax breaks, the special interests forced them back in. Which then forced the House Ways and Means to raise tax rates back to 39.1%.

Impasse.

So House Ways and Means came up with Plan B: The border adjustment tax. It’s real name is a “destination-based cash flow tax”, but the colloquial term is border adjustment tax.

The border adjustment tax is, very basically, an import tax. Even better, it’s a consumption tax. The corporate tax is a tax on production.

All of our allies have a border adjustment tax. We don’t. We’ve been living on that unlevel playing field forever. Now that House Ways and Means introduced the idea of the US moving to one, our allies are screaming at how unfair it would be for us to have the same kind of import tax they do!

Go figure.

We can get into the pluses and minuses of a border adjustment tax a little later. But for now, here’s how the GOP plan was going to work.

Since the special interests refused to give up their special tax breaks, the GOP decided to leave them in.

Since the special interests want their cake and to eat it, too, they also got the corporate tax rate lowered. To somewhere around 15%.

Because of this, all the lost revenue due to the tax breaks was no longer made up for by the 39.1% tax rate. So House Ways and Means intended to make up the lost revenues with the Border Adjustment Tax.

Enter Trump.

Donald Trump was “ambivalent”, at best, about the Border Adjustment Tax. And now he has decided he is against it.

So bye-bye Border Adjustment Tax.


But…he is keeping the lower corporate tax rate AND all those special interest tax breaks. And that means, boys and girls, a gigantic spurt in national debt if the Trump way comes to pass.


This is a total cop-out. It is the coward’s way out, and every fiscal conservative should be vehemently opposed to this.

There are 2 sides to every equation, and you are addressing the revenue side of the debt equation. The spending side is at least as treacherous as the revenue side. We have a national debt in excess of $19 trillion. Congress, be they left or right, has shown they are unable to control spending. If the government stole all the wealth of the 400 riches Americans, they would only pay down the debt about 12%. The reality is there is a limit to how much you can tax, and the spending limit is well beyond the taxing limit.

You don't understand.

Tax expenditures ARE spending!

That's why they are called tax expenditures.

They are the largest part of the budget. By far.

You see, after our government has spent all that money on roads and defense and puppies for hookers and Social Security and whatnot, it then spends an additional $1.4 trillion on tax expenditures.

So you go right ahead and cut spending for roads and defense and puppies for hookers, but you have barely scratched the surface. You haven't even touched the $1.4 trillion of tax expenditures.

So you idiot want to spend 17 trillion to make 1,4 trillion?
No.

JFC, we ALREDY SPENT TEH 19 TRILLION. JFC. We will spend the 1.4 Trillion in expenditures EVERY YEAR IN THE FUTURE.

 

[WaitingFor2020]

When I first saw the video of Congressman Nunes this past February, he skyrocketed in my esteem. You can tell he's fucking pissed at all the special interests who are forcing the corporate tax rate up. Really pissed.

You're looking at a genuine fiscal conservative who gets it. Really gets it. And he's trying his best to do something about it.

He dropped in my esteem when he started throwing up a smokescreen for Trump over the whole bogus wiretap thing. But at least he's done the right thing and recused himself.

He had to. The source of his so-called blockbuster insider info about Trump came from inside the White House.

 

[g5000]

An allegory:

Bob earns $50k a year. Joe earns $50k a year.

When the federal budget is evenly divided up, Bob and Joe's share of government spending is $6000. So Bob and Joe should each be paying $3000. That works out to a 6 percent tax on their income.

But Bob is getting a subsidy from the government. He gets to deduct $1000 from his share of the tax burden. So his tax bill is $2000 instead of $3000.

That subsidy does not magically reduce the budget. That $6000 still needs to come from somewhere.

To balance the budget, Joe will have to make up the difference. He will have to pay $4000 instead of $3000.

Here's the problem: $4000 is not 6 percent of Joe's income.

To fix this problem, the government has to increase tax rates so that after Bob's subsidy is factored out, Bob is paying about $2000 while Joe pays $4000. And we end up with an insane system where two people earning identical incomes are paying radically different amounts of tax.

Doing the math, tax rates have to be increased to around 8 percent to make this happen.

Joe pitches a royal hissy fit at having his taxes increased by 33 percent, as he damn well should.

So Congress decides to raise the tax rate to 7 percent instead, and borrow the rest from China.

This is the effect your tax expenditures are having on our country.

Now let's eliminate Bob's tax deduction.

If we leave the tax rate at 7 percent, the government would bring in $7,000. That's a $1,000 surplus, without any deficit.

We can choose to spend that surplus by lowering tax rates to 6 percent.

Then we have equilibrium. Bob does not get a deduction, but now he is paying a lower tax rate, as is his neighbor Joe.

That means Joe gets instant tax relief. The guy you haven't given a flying fuck about as long as you got your government subsidy. Joe has been carrying Bob.

And by eliminating Bob's subsidy, we don't have to borrow money from China any more. Not only that, Joe and Bob pay identical taxes since they earn identical incomes.

Joe is no longer carrying Bob on his back.

This is what fiscal conservatives are trying to achieve.

But as you heard from Congressman Nunes, the special interests have stopped it cold.

 

[bendog]

Oh I agree completely and I would love to see tax reform of this type.

I have low expectations of my fellow Americans to sacrifice their money saving(damn sarcasm again) deductions, I guess.

Right now I have three years of extensions on my income tax so my accountant can find ways to save as much money as possible. Of course I only do that in principal, I pay far more for my accountant fees then I do in taxes.

If there were no tax expenditures, you could fill out your taxes in five minutes, on a postcard. And you would be paying a much lower tax rate.

Accountants hate the very idea of that. They lobby to keep your taxes as complicated as possible.

True, but I would rather see the money go to someone like a local accountant then to the federal government, on principle alone.

That's not the equation. In a world of no tax expenditures, money you save by not going to an accountant would not be going to the government. This would be a situation where you really do get to keep more of your own money.

See that's the problem, with an over-bearing, obese federal government and the concept of a safety net counts on human nature to do the right thing, It never has happened in history…

The basic premise of the Repbulic is people will do what they think is in their self interest. I agree that some of the safety net distorts self interest v. self help.

The premise of the thread, imo, is that the gop House was trying to reform taxes so that self interest, as paying the least anyone or any corp can manage under the system, coincides more closely with what benefits the economy overall.

Soggy missed that entirely.

 

[Rustic]

An allegory:

Bob earns $50k a year. Joe earns $50k a year.

When the federal budget is evenly divided up, Bob and Joe's share of government spending is $6000. So Bob and Joe should each be paying $3000. That works out to a 6 percent tax on their income.

But Bob is getting a subsidy from the government. He gets to deduct $1000 from his share of the tax burden. So his tax bill is $2000 instead of $3000.

That subsidy does not magically reduce the budget. That $6000 still needs to come from somewhere.

To balance the budget, Joe will have to make up the difference. He will have to pay $4000 instead of $3000.

Here's the problem: $4000 is not 6 percent of Joe's income.

To fix this problem, the government has to increase tax rates so that after Bob's subsidy is factored out, Bob is paying about $2000 while Joe pays $4000.

Doing the math, tax rates have to be increased to around 8 percent to make this happen.

Joe pitches a royal hissy fit at having his taxes increased by 33 percent, as he damn well should.

So Congress decides to raise the tax rate to 7 percent instead, and borrow the rest from China.

This is the effect your tax expenditures are having on our country.

Now let's eliminate Bob's tax deduction.

If we leave the tax rate at 7 percent, the government would bring in $7,000. That's a $1,000 surplus, without any deficit.

We can choose to spend that surplus by lowering tax rates to 6 percent.

Then we have equilibrium. Bob does not get a deduction, but now he is paying a lower tax rate, as is his neighbor Joe.

That means Joe gets instant tax relief. The guy you haven't given a flying fuck about as long as you got your government subsidy. Joe has been carrying Bob.

And by eliminating Bob's subsidy, we don't have to borrow money from China any more. Not only that, Joe and Bob pay identical taxes since they earn identical incomes.

Joe is no longer carrying Bob on his back.

But here's the real problem is the people should determine what the federal budget is, they don't now. The government should spend within its means and what they have at the time, future perceived taxes are not the governments… they can change depending on what the people want.

 

[g5000]

Congressman Nunes:

"If people wanted to drop the corporate rate from 35 to say 33, 32, maybe 30, we could probably do it. But if you go back to several years that we looked at doing just that, the goal was to get to 25 percent, and by the time every lobbyist, every special interest group in town, representing every major corporation in this country, the tax rate was automatically all the way back above 30 by the time you put everybody's special loophole in."

Read that. Read it, and read it, and read it again until you get it.

 

[g5000]

An allegory:

Bob earns $50k a year. Joe earns $50k a year.

When the federal budget is evenly divided up, Bob and Joe's share of government spending is $6000. So Bob and Joe should each be paying $3000. That works out to a 6 percent tax on their income.

But Bob is getting a subsidy from the government. He gets to deduct $1000 from his share of the tax burden. So his tax bill is $2000 instead of $3000.

That subsidy does not magically reduce the budget. That $6000 still needs to come from somewhere.

To balance the budget, Joe will have to make up the difference. He will have to pay $4000 instead of $3000.

Here's the problem: $4000 is not 6 percent of Joe's income.

To fix this problem, the government has to increase tax rates so that after Bob's subsidy is factored out, Bob is paying about $2000 while Joe pays $4000.

Doing the math, tax rates have to be increased to around 8 percent to make this happen.

Joe pitches a royal hissy fit at having his taxes increased by 33 percent, as he damn well should.

So Congress decides to raise the tax rate to 7 percent instead, and borrow the rest from China.

This is the effect your tax expenditures are having on our country.

Now let's eliminate Bob's tax deduction.

If we leave the tax rate at 7 percent, the government would bring in $7,000. That's a $1,000 surplus, without any deficit.

We can choose to spend that surplus by lowering tax rates to 6 percent.

Then we have equilibrium. Bob does not get a deduction, but now he is paying a lower tax rate, as is his neighbor Joe.

That means Joe gets instant tax relief. The guy you haven't given a flying fuck about as long as you got your government subsidy. Joe has been carrying Bob.

And by eliminating Bob's subsidy, we don't have to borrow money from China any more. Not only that, Joe and Bob pay identical taxes since they earn identical incomes.

Joe is no longer carrying Bob on his back.

But here's the real problem is the people should determine what the federal budget is, they don't now. The government should spend within its means and what they have at the time, future perceived taxes are not the governments… they can change depending on what the people want.

"The government should spend within its means."

When I say we should ban tax expenditures, that is EXACTLY what I am saying.

 

[g5000]

When our government gives a special interest a tax break, it has to raise tax rates. This is what Nunes is trying to tell the public.

However, you can only raise tax rates so far. After that point, you have to borrow the difference.

That's what has been going on, folks.

We have higher tax rates, and a giant national debt, because of this very kind of spending.

The tax break is paid for by everyone paying higher tax rates.

The people getting the tax break are stealing from every taxpayer.

 

[Rustic]

Right now I have three years of extensions on my income tax so my accountant can find ways to save as much money as possible. Of course I only do that in principal, I pay far more for my accountant fees then I do in taxes.

If there were no tax expenditures, you could fill out your taxes in five minutes, on a postcard. And you would be paying a much lower tax rate.

Accountants hate the very idea of that. They lobby to keep your taxes as complicated as possible.

True, but I would rather see the money go to someone like a local accountant then to the federal government, on principle alone.

That's not the equation. In a world of no tax expenditures, money you save by not going to an accountant would not be going to the government. This would be a situation where you really do get to keep more of your own money.

See that's the problem, with an over-bearing, obese federal government and the concept of a safety net counts on human nature to do the right thing, It never has happened in history…

The basic premise of the Repbulic is people will do what they think is in their self interest. I agree that some of the safety net distorts self interest v. self help.

The premise of the thread, imo, is that the gop House was trying to reform taxes so that self interest, as paying the least anyone or any corp can manage under the system, coincides more closely with what benefits the economy overall.

Soggy missed that entirely.

The government forcing its people to do the "responsible" thing never has worked, does not work and never will work…
Are people going to save money on their own? in most cases no... but doing it for their own good it's not the answer. That always results in the overbearing obese all controlling government…
The concept of leeching off the prosperous and successful has a diminishing return, every time… They simply run out of money. Then what?
Socialism/communism always looks good on paper, but never once in history has it worked out in real life long-term.
Hitting rock-bottom is always the best way to wake people up, handouts have no future…

 

[bendog]

When our government gives a special interest a tax break, it has to raise tax rates. This is what Nunes is trying to tell the public.

However, you can only raise tax rates so far. After that point, you have to borrow the difference.

That's what has been going on, folks.

We have higher tax rates, and a giant national debt, because of this very kind of spending.

The tax break is paid for by everyone paying higher tax rates.

The people getting the tax break are stealing from every taxpayer.

There's also the spending component of expenditures working with direct appropriations. If you just cut rates to equalize what people pay to be revenue neutral with what they lose in expenditures a/k/a tax breaks, it has not effect on deficits.

However, by making the decision on what to buy or build more based on what it's actually worth w/o tax giveaways, then perhaps the economy runs more efficiently and in the end we all win. THAT WAS THE THEORETICAL BASIS FOR THATCHERISM/REAGONOMICS.

But what Trump delivers is a Yuuge tax cut for the 1%, a lesser tax cut for the middle class and more spending. HE'S W WITHOUT THE WAR.... YET.

 

[Rustic]

When our government gives a special interest a tax break, it has to raise tax rates. This is what Nunes is trying to tell the public.

However, you can only raise tax rates so far. After that point, you have to borrow the difference.

That's what has been going on, folks.

We have higher tax rates, and a giant national debt, because of this very kind of spending.

The tax break is paid for by everyone paying higher tax rates.

The people getting the tax break are stealing from every taxpayer.

There's also the spending component of expenditures working with direct appropriations. If you just cut rates to equalize what people pay to be revenue neutral with what they lose in expenditures a/k/a tax breaks, it has not effect on deficits.

However, by making the decision on what to buy or build more based on what it's actually worth w/o tax giveaways, then perhaps the economy runs more efficiently and in the end we all win. THAT WAS THE THEORETICAL BASIS FOR THATCHERISM/REAGONOMICS.

But what Trump delivers is a Yuuge tax cut for the 1%, a lesser tax cut for the middle class and more spending. HE'S W WITHOUT THE WAR.... YET.

Taxing in the prosperous/successful more always has a diminishing return. A progressive income tax is taxation without representation. A consumption tax makes so much more sense…

 

[Winston]

As I have explained many times, every time you give a special interest a tax break, someone else has to make up the difference. This is achieved by raising tax rates on everyone. So even the lobby that got the tax break now has a higher tax rate, along with everyone else.

However, if we raised tax rates high enough to pay for the $1.4 trillion of them that are given out each year, the American people would revolt. So tax rates are raised to a barely tolerable level, and then the rest is borrowed.

And that is how we got to $19 trillion in debt and a 39.1% corporate tax rate.

As I have explained many times, if you get rid of all these government gifts to all these special interests, you could substantially lower tax rates. And you get the extra bonus of everyone being on a level playing field. Entities which earn identical incomes would pay identical taxes.

Instead, we have an insane system where entities which earn identical incomes pay radically different taxes.

Enter the House Ways and Means Committee, chaired by Kevin Brady. This committee came up with a plan to do just what I have been saying for years. They came up with a plan to lower the corporate tax rate substantially by getting rid of all those government giveaways.

Their original plan was simple. Get rid of all the special interest deductions, credits, and exemptions.

Guess what? Those special interests are so powerful that this turned out to be impossible. Our Congress is now completely owned, boys and girls, and it is long past time to wake the fuck up to this fact.

You simply must wake up. Anyone who defends $1.4 trillion of thievery is on the wrong side, and yet we are burdened with pseudocons who do just that. They defend deductions, credits, and exemptions which add up to $1.4 trillion like they are welfare queens.

They have been fed a lie that these tax expenditures mean they get to keep more of their own money. This is a giant lie. A YUGE lie.

As it happened, every time the House Ways and Means committee tried to take away all those special interest tax breaks, the special interests forced them back in. Which then forced the House Ways and Means to raise tax rates back to 39.1%.

Impasse.

So House Ways and Means came up with Plan B: The border adjustment tax. It’s real name is a “destination-based cash flow tax”, but the colloquial term is border adjustment tax.

The border adjustment tax is, very basically, an import tax. Even better, it’s a consumption tax. The corporate tax is a tax on production.

All of our allies have a border adjustment tax. We don’t. We’ve been living on that unlevel playing field forever. Now that House Ways and Means introduced the idea of the US moving to one, our allies are screaming at how unfair it would be for us to have the same kind of import tax they do!

Go figure.

We can get into the pluses and minuses of a border adjustment tax a little later. But for now, here’s how the GOP plan was going to work.

Since the special interests refused to give up their special tax breaks, the GOP decided to leave them in.

Since the special interests want their cake and to eat it, too, they also got the corporate tax rate lowered. To somewhere around 15%.

Because of this, all the lost revenue due to the tax breaks was no longer made up for by the 39.1% tax rate. So House Ways and Means intended to make up the lost revenues with the Border Adjustment Tax.

Enter Trump.

Donald Trump was “ambivalent”, at best, about the Border Adjustment Tax. And now he has decided he is against it.

So bye-bye Border Adjustment Tax.


But…he is keeping the lower corporate tax rate AND all those special interest tax breaks. And that means, boys and girls, a gigantic spurt in national debt if the Trump way comes to pass.


This is a total cop-out. It is the coward’s way out, and every fiscal conservative should be vehemently opposed to this.

There are 2 sides to every equation, and you are addressing the revenue side of the debt equation. The spending side is at least as treacherous as the revenue side. We have a national debt in excess of $19 trillion. Congress, be they left or right, has shown they are unable to control spending. If the government stole all the wealth of the 400 riches Americans, they would only pay down the debt about 12%. The reality is there is a limit to how much you can tax, and the spending limit is well beyond the taxing limit.

That's what I've been saying all along, we are fucked. There is not enough money to pay for the debt that career politicians put on to this country.

First, you are wrong. Sure, the number looks huge, but it is easily serviced, and that is the key, even in an individual household budget. It is not the amount of debt that creates a problem, it is the percentage of income devoted to servicing that debt. Throughout the Obama administration the COST of servicing the debt, that is the percentage of the government 's budget devoted to the payment of interest, was less than HALF of what it was throughout the entire Reagan administration. Obama was borrowing money at two and three percent long term, sometimes they got paid to borrow money short term. Reagan was borrowing at over six percent long term.

 

[bendog]

If there were no tax expenditures, you could fill out your taxes in five minutes, on a postcard. And you would be paying a much lower tax rate.

Accountants hate the very idea of that. They lobby to keep your taxes as complicated as possible.

True, but I would rather see the money go to someone like a local accountant then to the federal government, on principle alone.

That's not the equation. In a world of no tax expenditures, money you save by not going to an accountant would not be going to the government. This would be a situation where you really do get to keep more of your own money.

See that's the problem, with an over-bearing, obese federal government and the concept of a safety net counts on human nature to do the right thing, It never has happened in history…

The basic premise of the Repbulic is people will do what they think is in their self interest. I agree that some of the safety net distorts self interest v. self help.

The premise of the thread, imo, is that the gop House was trying to reform taxes so that self interest, as paying the least anyone or any corp can manage under the system, coincides more closely with what benefits the economy overall.

Soggy missed that entirely.

The government forcing its people to do the "responsible" thing never has worked, does not work and never will work…
Are people going to save money on their own? in most cases no... but doing it for their own good it's not the answer. That always results in the overbearing obese all controlling government…
The concept of leeching off the prosperous and successful has a diminishing return, every time… They simply run out of money. Then what?
Socialism/communism always looks good on paper, but never once in history has it worked out in real life long-term.
Hitting rock-bottom is always the best way to wake people up, handouts have no future…

People used to save money because it was in their interests. My parents and grandparents did. We now spend all we earn.

The purpose of tax reform would be, for example, to encourage people buy smaller houses, not take an interest deduction, and possibly save some money. Of course wages would have to rise.

 

[Rustic]

As I have explained many times, every time you give a special interest a tax break, someone else has to make up the difference. This is achieved by raising tax rates on everyone. So even the lobby that got the tax break now has a higher tax rate, along with everyone else.

However, if we raised tax rates high enough to pay for the $1.4 trillion of them that are given out each year, the American people would revolt. So tax rates are raised to a barely tolerable level, and then the rest is borrowed.

And that is how we got to $19 trillion in debt and a 39.1% corporate tax rate.

As I have explained many times, if you get rid of all these government gifts to all these special interests, you could substantially lower tax rates. And you get the extra bonus of everyone being on a level playing field. Entities which earn identical incomes would pay identical taxes.

Instead, we have an insane system where entities which earn identical incomes pay radically different taxes.

Enter the House Ways and Means Committee, chaired by Kevin Brady. This committee came up with a plan to do just what I have been saying for years. They came up with a plan to lower the corporate tax rate substantially by getting rid of all those government giveaways.

Their original plan was simple. Get rid of all the special interest deductions, credits, and exemptions.

Guess what? Those special interests are so powerful that this turned out to be impossible. Our Congress is now completely owned, boys and girls, and it is long past time to wake the fuck up to this fact.

You simply must wake up. Anyone who defends $1.4 trillion of thievery is on the wrong side, and yet we are burdened with pseudocons who do just that. They defend deductions, credits, and exemptions which add up to $1.4 trillion like they are welfare queens.

They have been fed a lie that these tax expenditures mean they get to keep more of their own money. This is a giant lie. A YUGE lie.

As it happened, every time the House Ways and Means committee tried to take away all those special interest tax breaks, the special interests forced them back in. Which then forced the House Ways and Means to raise tax rates back to 39.1%.

Impasse.

So House Ways and Means came up with Plan B: The border adjustment tax. It’s real name is a “destination-based cash flow tax”, but the colloquial term is border adjustment tax.

The border adjustment tax is, very basically, an import tax. Even better, it’s a consumption tax. The corporate tax is a tax on production.

All of our allies have a border adjustment tax. We don’t. We’ve been living on that unlevel playing field forever. Now that House Ways and Means introduced the idea of the US moving to one, our allies are screaming at how unfair it would be for us to have the same kind of import tax they do!

Go figure.

We can get into the pluses and minuses of a border adjustment tax a little later. But for now, here’s how the GOP plan was going to work.

Since the special interests refused to give up their special tax breaks, the GOP decided to leave them in.

Since the special interests want their cake and to eat it, too, they also got the corporate tax rate lowered. To somewhere around 15%.

Because of this, all the lost revenue due to the tax breaks was no longer made up for by the 39.1% tax rate. So House Ways and Means intended to make up the lost revenues with the Border Adjustment Tax.

Enter Trump.

Donald Trump was “ambivalent”, at best, about the Border Adjustment Tax. And now he has decided he is against it.

So bye-bye Border Adjustment Tax.


But…he is keeping the lower corporate tax rate AND all those special interest tax breaks. And that means, boys and girls, a gigantic spurt in national debt if the Trump way comes to pass.


This is a total cop-out. It is the coward’s way out, and every fiscal conservative should be vehemently opposed to this.

There are 2 sides to every equation, and you are addressing the revenue side of the debt equation. The spending side is at least as treacherous as the revenue side. We have a national debt in excess of $19 trillion. Congress, be they left or right, has shown they are unable to control spending. If the government stole all the wealth of the 400 riches Americans, they would only pay down the debt about 12%. The reality is there is a limit to how much you can tax, and the spending limit is well beyond the taxing limit.

That's what I've been saying all along, we are fucked. There is not enough money to pay for the debt that career politicians put on to this country.

First, you are wrong. Sure, the number looks huge, but it is easily serviced, and that is the key, even in an individual household budget. It is not the amount of debt that creates a problem, it is the percentage of income devoted to servicing that debt. Throughout the Obama administration the COST of servicing the debt, that is the percentage of the government 's budget devoted to the payment of interest, was less than HALF of what it was throughout the entire Reagan administration. Obama was borrowing money at two and three percent long term, sometimes they got paid to borrow money short term. Reagan was borrowing at over six percent long term.

Right now the economy due to socialist entitlement programs is very unhealthy, has been for decades.
career politicians with their government has sucked this country dry.
The fact remains the nanny state with the safety net can never work, there's only so much blood that can be sucked out of the prosperous/successful…

 

[BuckToothMoron]

An allegory:

Bob earns $50k a year. Joe earns $50k a year.

When the federal budget is evenly divided up, Bob and Joe's share of government spending is $6000. So Bob and Joe should each be paying $3000. That works out to a 6 percent tax on their income.

But Bob is getting a subsidy from the government. He gets to deduct $1000 from his share of the tax burden. So his tax bill is $2000 instead of $3000.

That subsidy does not magically reduce the budget. That $6000 still needs to come from somewhere.

To balance the budget, Joe will have to make up the difference. He will have to pay $4000 instead of $3000.

Here's the problem: $4000 is not 6 percent of Joe's income.

To fix this problem, the government has to increase tax rates so that after Bob's subsidy is factored out, Bob is paying about $2000 while Joe pays $4000. And we end up with an insane system where two people earning identical incomes are paying radically different amounts of tax.

Doing the math, tax rates have to be increased to around 8 percent to make this happen.

Joe pitches a royal hissy fit at having his taxes increased by 33 percent, as he damn well should.

So Congress decides to raise the tax rate to 7 percent instead, and borrow the rest from China.

This is the effect your tax expenditures are having on our country.

Now let's eliminate Bob's tax deduction.

If we leave the tax rate at 7 percent, the government would bring in $7,000. That's a $1,000 surplus, without any deficit.

We can choose to spend that surplus by lowering tax rates to 6 percent.

Then we have equilibrium. Bob does not get a deduction, but now he is paying a lower tax rate, as is his neighbor Joe.

That means Joe gets instant tax relief. The guy you haven't given a flying fuck about as long as you got your government subsidy. Joe has been carrying Bob.

And by eliminating Bob's subsidy, we don't have to borrow money from China any more. Not only that, Joe and Bob pay identical taxes since they earn identical incomes.

Joe is no longer carrying Bob on his back.

This is what fiscal conservatives are trying to achieve.

But as you heard from Congressman Nunes, the special interests have stopped it cold.

Your simplistic analogy doesn't really address the ramifications of eliminating deductions/tax expenditures. Imagine if the interest deduction for home mortgages was eliminated. How many people would lose their house, how many loans would go into default, how many banks would be insolvent. You seem to think you can turn a switch and eliminate these expenditures and balance the budget. The budgets of businesses and people are constructed with these expenditures considered. I'm all for a simpler tax system, but let's also not be naive and think that 1) We can eliminate these from the tax code with out devastating effects, and 2) congress will not add more to the code immediately. Subsidies are used to encourage a particular behavior or action, and our government will continue to employ them.

As a side note- China actually "only" owns about $1 trillion of our nearly $20 trillion debt.

 

[Rustic]

True, but I would rather see the money go to someone like a local accountant then to the federal government, on principle alone.

That's not the equation. In a world of no tax expenditures, money you save by not going to an accountant would not be going to the government. This would be a situation where you really do get to keep more of your own money.

See that's the problem, with an over-bearing, obese federal government and the concept of a safety net counts on human nature to do the right thing, It never has happened in history…

The basic premise of the Repbulic is people will do what they think is in their self interest. I agree that some of the safety net distorts self interest v. self help.

The premise of the thread, imo, is that the gop House was trying to reform taxes so that self interest, as paying the least anyone or any corp can manage under the system, coincides more closely with what benefits the economy overall.

Soggy missed that entirely.

The government forcing its people to do the "responsible" thing never has worked, does not work and never will work…
Are people going to save money on their own? in most cases no... but doing it for their own good it's not the answer. That always results in the overbearing obese all controlling government…
The concept of leeching off the prosperous and successful has a diminishing return, every time… They simply run out of money. Then what?
Socialism/communism always looks good on paper, but never once in history has it worked out in real life long-term.
Hitting rock-bottom is always the best way to wake people up, handouts have no future…

People used to save money because it was in their interests. My parents and grandparents did. We now spend all we earn.

The purpose of tax reform would be, for example, to encourage people buy smaller houses, not take an interest deduction, and possibly save some money. Of course wages would have to rise.

But it is not up to the government to determine what those interests of the people are. Because what works for one guy will not work for the next guy, it's called individuality and freedom.
A cookie-cutter does not work on humans…
With a small lean federal government and more robust states rights people's needs would be better Addressed.
With the rise of environmentalism the last several decades has cost in small business, it's just about impossible to run a small business long-term with all of these regulations And taxes.
The job determines wages or at least should, the federal government certainly should not. Stocking shelves and flipping burgers is not an $10 an hour job(maybe seven?), and certainly is not an career. A living wage is basically progressive for mooching/working the system.
Past generations had it right, they knew to depend on themselves not some fucked up career politicians government. This country is a capitalistic republic, not some FUBARED collective... in which there are no repercussions for screwing up, like a socialist safety net Which responsible people could never afford.

 

[Winston]

Real tax reform would have another benefit. The people who lend money to the government would suddenly have much more faith in our ability to honor our debts, and interest rates would drop, making the interest on our debt easier to manage.

It's win/win.

Whoa, you can stop right there because that is the key.

First, congratulations--pretty rare to see someone talk about "tax expenditures". Even more rare do you find someone that actually understands them. But here is the deal, the people lending money to the government, they are the very same people reaping the benefits of those tax expenditures. Take the big three--payment of medical benefits with pre-tax dollars, the home mortgage interest deduction, and the "step-up", especially the "step-up", listed by the Department of Treasury as "capital gains"--those three alone account for three hundred fifty billion of your 1.7 trillion dollar figure. Rather conservative if you ask me. Steinbrenner's family opted for an estate tax and the step-up. That alone cost the government three hundred million.

https://www.treasury.gov/resource-center/tax-policy/Documents/Tax-Expenditures-FY2016.pdf

The government is required to list tax expenditures within each budget. The above is that required report.

When Reagan took office the wealthy figured out pretty damn quick that it was much better to lend money to the government than pay taxes. Hell, anyone would rather collect interest, and especially when it is considered "risk-free", than PAY taxes. And the most effective way to cut taxes paid by the wealthy is not with some big swooping "rate cut", but with "tax expenditures". Stealthy, confusing, limited, and complicated--damn perfect for those that can afford the "access", rather it be the funds to pay lawyers, accountants, or people like me, or the funds to donate to politicians in order to create some more "tax expenditures".