The Brady/Ryan Tax Reform Plan

[g5000]

Enough with the monkeys running the zoo around here, and their shit slinging. Let's talk turkey.

Kevin Brady and Paul Ryan will be holding the fiscal reins going forward, and will thus be the real power in Washington.

Here is a summary of their tax reform plan: Forbes: Speaker Paul Ryan And Chairman Kevin Brady Produce A Tax Blueprint To Make America Great Again

• Increases the standard deduction from $6,300 to $12,000 for singles, from $12,600 to $24,000 for married couples filing jointly, and from $9,300 to $18,000 for heads of household.
• Eliminates the personal exemption and creates a $500 non-refundable credit for dependents who are not children.
• Increases the Child Tax Credit to $1,500 per child, limits the refundability of the credit to $1,000, and raises the phaseout threshold for the Child Tax Credit for married households from $110,000 to $150,000.
• Eliminates all itemized deductions besides the mortgage interest deduction and the charitable contribution deduction.
• Eliminates the individual alternative minimum tax.
• Reduces the corporate income tax rate from 35% to 20%.
• Eliminates the corporate alternative minimum tax.
• Taxes income derived from pass-through businesses at a maximum rate of 25%.
• Allows the cost of capital investment to be fully and immediately deductible.
• Eliminates the deductibility of net interest expenses on future loans.
• Restricts the deduction for net operating losses to 90% of net taxable income and allows net operating losses to be carried forward indefinitely, and increased by a factor reflecting inflation and the real return to capital. Does not allow net operating losses to be carried back.
• Eliminates the domestic production activities deduction (section 199) and all other business credits, except for the research and development credit.
• Creates a fully territorial tax system, exempting from U.S. tax 100% of dividends from foreign subsidiaries.
• Enacts a deemed repatriation of currently deferred foreign profits, at a tax rate of 8.75% for cash and cash-equivalent profits and 3.5% on other profits.
• Modifies all business income taxes to be border-adjustable, disallowing the deduction for purchases from nonresidents and exempting export profits and foreign-derived profits from taxation.

Here is their tax plan from their own pen: http://abetterway.speaker.gov/_assets/pdf/ABetterWay-Tax-PolicyPaper.pdf

Here is the analysis by the independent Tax Foundation: Details and Analysis of the 2016 House Republican Tax Reform Plan

• The House Republican tax reform plan would reform the individual income tax and would move towards destination-based cash flow taxation of businesses.
• According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to 9.1 percent higher GDP over the long term, 7.7 percent higher wages, and an additional 1.7 million full-time equivalent jobs.
• The plan would reduce federal revenue by $2.4 trillion over the first decade on a static basis. However, due to the larger economy and the broader tax base, the plan would reduce revenue by $191 billion over the first decade.
• Although the plan would reduce federal revenue by $2.4 trillion on a static basis in the first decade, much of the revenue loss is one-time. As a result, the plan will cost much less in subsequent decades.
• On a static basis, the plan would lead to 0.7 percent higher after-tax income for all taxpayers and 5.3 percent higher after-tax income for the top 1 percent. When accounting for the increased GDP, after-tax incomes of all taxpayers would increase by at least 8.4 percent.

 

[g5000]

"Eliminates all itemized deductions besides the mortgage interest deduction and the charitable contribution deduction."

First, big mistake not to eliminate the mortgage interest deduction. That's an $80 billion boondoggle scheme which transfers wealth from the pocket of the common man into the pockets of those up the food chain.

The rubes have been fooled into bleeving they are "getting to keep more of my own money". That's a huge lie. They are paying higher prices for their homes, and higher tax rates, to support the mortgage interest deduction.

Next, notice the key words "eliminates all itemized deductions". This bill still provides an up front bulk "standard deduction" just for breathing.

For every deduction, standard or otherwise, you have to raise tax rates higher to make up the difference.

But if you put a gun to my head, I would have to say this is one of the better tax reform plans to come down the pike since 1986.

 

[g5000]

"Enacts a deemed repatriation of currently deferred foreign profits, at a tax rate of 8.75% for cash and cash-equivalent profits and 3.5% on other profits."

3.5% on other profits...

When you open up a loophole like that, corporations have a way of driving truckloads of cash through them.

I bet less than 10 percent of those "deferred foreign profits" will be taxed at 8.75% when they are repatriated, and will be taxed as "other profits" at 3.5%.

Anyone want to take the other side of that bet?

 

[buckeye45_73]

"Eliminates all itemized deductions besides the mortgage interest deduction and the charitable contribution deduction."

First, big mistake not to eliminate the mortgage interest deduction. That's an $80 billion boondoggle scheme which transfers wealth from the pocket of the common man into the pockets of those up the food chain.

The rubes have been fooled into bleeving they are "getting to keep more of my own money". That's a huge lie. They are paying higher prices for their homes, and higher tax rates, to support the mortgage interest deduction.

Next, notice the key words "eliminates all itemized deductions". This bill still provides an up front bulk "standard deduction" just for breathing.

For every deduction, standard or otherwise, you have to raise tax rates higher to make up the difference.

But if you put a gun to my head, I would have to say this is one of the better tax reform plans to come down the pike since 1986.

I agree I just bought a house and think the mortale deduction.and charity deductions be removed as well, but that would be a huge under taking, so gutting the rest is a.good first step.

I also.like how they are trying to encourage capitale expenditures and business growth with the plan.

 

[Dont Taz Me Bro]

Creates a fully territorial tax system, exempting from U.S. tax 100% of dividends from foreign subsidiaries.

So does this mean that Americans who work in a foreign country no longer have to pay taxes to both? That's been a huge problem for expatriots and many have forfeited citizenship because of it. Most other nations don't require their workers here in the U.S. to also pay taxes to their home nation. We are one of the only ones that do.

 

[buckeye45_73]

Not enough smears or logical fallacies? Requires too much thinking? What?

Well we disagree alot, but when I agree im not afraid to say it. I would prefer the elimination of the income tax, but we have to compromise.

 

[LoneLaugher]

Not enough smears or logical fallacies? Requires too much thinking? What?

What would you like? A theoretical argument? This is a summary of a plan which does not include revenue projections. It is, therefore, theoretical. i stand to save some money as I understand the plan. I won't know if that is a good thing until I see what the effect is on the nation as a whole. I'm not confident given past GOP tax plans.

 

[g5000]

Not enough smears or logical fallacies? Requires too much thinking? What?

Well we disagree alot, but when I agree im not afraid to say it. I would prefer the elimination of the income tax, but we have to compromise.

I prefer the elimination of the income tax as well, and prefer we have consumption taxes. I lean heavily in favor of the Fair Tax. It has its pitfalls, but it is far better than an income tax.

However, no matter which tax scheme we have, we must first ban tax expenditures, and this Brady/Ryan plan is a big move in that direction.

I understand the political cowardice behind not removing the MID. But it really needs to go sooner or later.

The public must first be educated.

 

[g5000]

Not enough smears or logical fallacies? Requires too much thinking? What?

What would you like? A theoretical argument? This is a summary of a plan which does not include revenue projections.

Actually, it does. Did you read the entire OP?

 

[g5000]

Creates a fully territorial tax system, exempting from U.S. tax 100% of dividends from foreign subsidiaries.

So does this mean that Americans who work in a foreign country no longer have to pay taxes to both?

No, dividends from foreign subsidiaries relates to income taxes on dividends from foreign stocks.

26 U.S. Code § 245 - Dividends received from certain foreign corporations

 

[g5000]

The analysis of the Ryan/Brady tax plan states that this tax reform plan will still result in annual deficits.

It will not reduce our debt, and will in fact keep adding to it.

That's the price of deductions.

 

[buckeye45_73]

Not enough smears or logical fallacies? Requires too much thinking? What?

Well we disagree alot, but when I agree im not afraid to say it. I would prefer the elimination of the income tax, but we have to compromise.

I prefer the elimination of the income tax as well, and prefer we have consumption taxes. I lean heavily in favor of the Fair Tax. It has its pitfalls, but it is far better than an income tax.

However, no matter which tax scheme we have, we must first ban tax expenditures, and this Brady/Ryan plan is a big move in that direction.

I understand the political cowardice behind not removing the MID. But it really needs to go sooner or later.

The public must first be educated.

I cant disagree with anything in this post, well said! I too am in fabor of the Fair tax and Insupported Carson originally because of that and yeah consumption tax would encourage saving and not just buying stuff to buy stuff and would get criminals to pay taxes as well.

 

[Soggy in NOLA]

Not enough smears or logical fallacies? Requires too much thinking? What?

Well we disagree alot, but when I agree im not afraid to say it. I would prefer the elimination of the income tax, but we have to compromise.

I prefer the elimination of the income tax as well, and prefer we have consumption taxes. I lean heavily in favor of the Fair Tax. It has its pitfalls, but it is far better than an income tax.

However, no matter which tax scheme we have, we must first ban tax expenditures, and this Brady/Ryan plan is a big move in that direction.

I understand the political cowardice behind not removing the MID. But it really needs to go sooner or later.

The public must first be educated.

I cant disagree with anything in this post, well said! I too am in fabor of the Fair tax and Insupported Carson originally because of that and yeah consumption tax would encourage saving and not just buying stuff to buy stuff and would get criminals to pay taxes as well.

A direct tax on labor is abhorrent... I too favor a consumption based tax, no deductions, no exemptions. I won't however hold my breath.

 

[buckeye45_73]

Not enough smears or logical fallacies? Requires too much thinking? What?

Well we disagree alot, but when I agree im not afraid to say it. I would prefer the elimination of the income tax, but we have to compromise.

I prefer the elimination of the income tax as well, and prefer we have consumption taxes. I lean heavily in favor of the Fair Tax. It has its pitfalls, but it is far better than an income tax.

However, no matter which tax scheme we have, we must first ban tax expenditures, and this Brady/Ryan plan is a big move in that direction.

I understand the political cowardice behind not removing the MID. But it really needs to go sooner or later.

The public must first be educated.

I cant disagree with anything in this post, well said! I too am in fabor of the Fair tax and Insupported Carson originally because of that and yeah consumption tax would encourage saving and not just buying stuff to buy stuff and would get criminals to pay taxes as well.

A direct tax on labor is abhorrent... I too favor a consumption based tax, no deductions, no exemptions. I won't however hold my breath.

Yeah it's a bitch, but at least we are getting presidential candidates promoting it, so maybe in a while people will learn about it.

 

[Soggy in NOLA]

Not enough smears or logical fallacies? Requires too much thinking? What?

Well we disagree alot, but when I agree im not afraid to say it. I would prefer the elimination of the income tax, but we have to compromise.

I prefer the elimination of the income tax as well, and prefer we have consumption taxes. I lean heavily in favor of the Fair Tax. It has its pitfalls, but it is far better than an income tax.

However, no matter which tax scheme we have, we must first ban tax expenditures, and this Brady/Ryan plan is a big move in that direction.

I understand the political cowardice behind not removing the MID. But it really needs to go sooner or later.

The public must first be educated.

I cant disagree with anything in this post, well said! I too am in fabor of the Fair tax and Insupported Carson originally because of that and yeah consumption tax would encourage saving and not just buying stuff to buy stuff and would get criminals to pay taxes as well.

A direct tax on labor is abhorrent... I too favor a consumption based tax, no deductions, no exemptions. I won't however hold my breath.

Yeah it's a bitch, but at least we are getting presidential candidates promoting it, so maybe in a while people will learn about it.

We shall see.... unfortunately, the IRS has TREMENDOUS control over your life, that is not an easy thing to relinquish.

 

[Skull Pilot]

The analysis of the Ryan/Brady tax plan states that this tax reform plan will still result in annual deficits.

It will not reduce our debt, and will in fact keep adding to it.

That's the price of deductions.

the income tax alone will never reduce our debt we have to cut spending

Right now we have a 1.1 trillion dollar discretionary spending budget

We need to do away with all discretionary spending and apply it to the debt while at the same time balancing our annual budgets and in 20 years we will no longer be a debtor nation

 

[NYcarbineer]

Enough with the monkeys running the zoo around here, and their shit slinging. Let's talk turkey.

Kevin Brady and Paul Ryan will be holding the fiscal reins going forward, and will thus be the real power in Washington.

Here is a summary of their tax reform plan: Forbes: Speaker Paul Ryan And Chairman Kevin Brady Produce A Tax Blueprint To Make America Great Again

• Increases the standard deduction from $6,300 to $12,000 for singles, from $12,600 to $24,000 for married couples filing jointly, and from $9,300 to $18,000 for heads of household.
• Eliminates the personal exemption and creates a $500 non-refundable credit for dependents who are not children.
• Increases the Child Tax Credit to $1,500 per child, limits the refundability of the credit to $1,000, and raises the phaseout threshold for the Child Tax Credit for married households from $110,000 to $150,000.
• Eliminates all itemized deductions besides the mortgage interest deduction and the charitable contribution deduction.
• Eliminates the individual alternative minimum tax.
• Reduces the corporate income tax rate from 35% to 20%.
• Eliminates the corporate alternative minimum tax.
• Taxes income derived from pass-through businesses at a maximum rate of 25%.
• Allows the cost of capital investment to be fully and immediately deductible.
• Eliminates the deductibility of net interest expenses on future loans.
• Restricts the deduction for net operating losses to 90% of net taxable income and allows net operating losses to be carried forward indefinitely, and increased by a factor reflecting inflation and the real return to capital. Does not allow net operating losses to be carried back.
• Eliminates the domestic production activities deduction (section 199) and all other business credits, except for the research and development credit.
• Creates a fully territorial tax system, exempting from U.S. tax 100% of dividends from foreign subsidiaries.
• Enacts a deemed repatriation of currently deferred foreign profits, at a tax rate of 8.75% for cash and cash-equivalent profits and 3.5% on other profits.
• Modifies all business income taxes to be border-adjustable, disallowing the deduction for purchases from nonresidents and exempting export profits and foreign-derived profits from taxation.

Here is their tax plan from their own pen: http://abetterway.speaker.gov/_assets/pdf/ABetterWay-Tax-PolicyPaper.pdf

Here is the analysis by the independent Tax Foundation: Details and Analysis of the 2016 House Republican Tax Reform Plan

• The House Republican tax reform plan would reform the individual income tax and would move towards destination-based cash flow taxation of businesses.
• According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to 9.1 percent higher GDP over the long term, 7.7 percent higher wages, and an additional 1.7 million full-time equivalent jobs.
• The plan would reduce federal revenue by $2.4 trillion over the first decade on a static basis. However, due to the larger economy and the broader tax base, the plan would reduce revenue by $191 billion over the first decade.
• Although the plan would reduce federal revenue by $2.4 trillion on a static basis in the first decade, much of the revenue loss is one-time. As a result, the plan will cost much less in subsequent decades.
• On a static basis, the plan would lead to 0.7 percent higher after-tax income for all taxpayers and 5.3 percent higher after-tax income for the top 1 percent. When accounting for the increased GDP, after-tax incomes of all taxpayers would increase by at least 8.4 percent.

At first glance it appears certain that their plan would leave even MORE American households paying no federal income tax.

Isn't that one of the Right's most pet peeves?

 

[Skull Pilot]

Enough with the monkeys running the zoo around here, and their shit slinging. Let's talk turkey.

Kevin Brady and Paul Ryan will be holding the fiscal reins going forward, and will thus be the real power in Washington.

Here is a summary of their tax reform plan: Forbes: Speaker Paul Ryan And Chairman Kevin Brady Produce A Tax Blueprint To Make America Great Again

• Increases the standard deduction from $6,300 to $12,000 for singles, from $12,600 to $24,000 for married couples filing jointly, and from $9,300 to $18,000 for heads of household.
• Eliminates the personal exemption and creates a $500 non-refundable credit for dependents who are not children.
• Increases the Child Tax Credit to $1,500 per child, limits the refundability of the credit to $1,000, and raises the phaseout threshold for the Child Tax Credit for married households from $110,000 to $150,000.
• Eliminates all itemized deductions besides the mortgage interest deduction and the charitable contribution deduction.
• Eliminates the individual alternative minimum tax.
• Reduces the corporate income tax rate from 35% to 20%.
• Eliminates the corporate alternative minimum tax.
• Taxes income derived from pass-through businesses at a maximum rate of 25%.
• Allows the cost of capital investment to be fully and immediately deductible.
• Eliminates the deductibility of net interest expenses on future loans.
• Restricts the deduction for net operating losses to 90% of net taxable income and allows net operating losses to be carried forward indefinitely, and increased by a factor reflecting inflation and the real return to capital. Does not allow net operating losses to be carried back.
• Eliminates the domestic production activities deduction (section 199) and all other business credits, except for the research and development credit.
• Creates a fully territorial tax system, exempting from U.S. tax 100% of dividends from foreign subsidiaries.
• Enacts a deemed repatriation of currently deferred foreign profits, at a tax rate of 8.75% for cash and cash-equivalent profits and 3.5% on other profits.
• Modifies all business income taxes to be border-adjustable, disallowing the deduction for purchases from nonresidents and exempting export profits and foreign-derived profits from taxation.

Here is their tax plan from their own pen: http://abetterway.speaker.gov/_assets/pdf/ABetterWay-Tax-PolicyPaper.pdf

Here is the analysis by the independent Tax Foundation: Details and Analysis of the 2016 House Republican Tax Reform Plan

• The House Republican tax reform plan would reform the individual income tax and would move towards destination-based cash flow taxation of businesses.
• According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to 9.1 percent higher GDP over the long term, 7.7 percent higher wages, and an additional 1.7 million full-time equivalent jobs.
• The plan would reduce federal revenue by $2.4 trillion over the first decade on a static basis. However, due to the larger economy and the broader tax base, the plan would reduce revenue by $191 billion over the first decade.
• Although the plan would reduce federal revenue by $2.4 trillion on a static basis in the first decade, much of the revenue loss is one-time. As a result, the plan will cost much less in subsequent decades.
• On a static basis, the plan would lead to 0.7 percent higher after-tax income for all taxpayers and 5.3 percent higher after-tax income for the top 1 percent. When accounting for the increased GDP, after-tax incomes of all taxpayers would increase by at least 8.4 percent.

At first glance it appears certain that their plan would leave even MORE American households paying no federal income tax.

Isn't that one of the Right's most pet peeves?

it should be everyone's pet peeve but especially those who whine about "fair shares"

 

[NYcarbineer]

A Republican plan that appears based on the thoroughly discredited theory that lowering taxes will increase revenues and pay for themselves is what I would call

fool me thrice, shame on me again.

 

[Dont Taz Me Bro]

The analysis of the Ryan/Brady tax plan states that this tax reform plan will still result in annual deficits.

It will not reduce our debt, and will in fact keep adding to it.

That's the price of deductions.

I imagine that's based on an assumption of current levels of spending remaining constant. They could cut spending to offset the deficit.

I could also start believing in unicorns.