Jump to content

Republican Tax Plan (a nothingburger with cheese)


Tiberius

Recommended Posts

The budget sequestration in 2013 refers to the automatic spending cuts to United States federal government spending in particular categories of outlays that were initially set to begin on January 1, 2013, as an austerity fiscal policy as a result of Budget Control Act of 2011 (BCA), and were postponed by two months by the American Taxpayer Relief Act of 2012 until March 1 when this law went into effect.


The reductions in spending authority were approximately $85.4 billion (versus $42 billion in actual cash outlays during fiscal year 2013, with similar cuts for years 2014 until 2021.


Medicare spending rates were reduced by a fixed 2% per year versus the other, domestic percents planned for the sequester


The sequester lowers spending by a total of approximately $1.1 trillion versus pre-sequester levels over the approximately 8-year period from 2013 to 2021.




The next budget will be very interesting with increased defense spending , tax cuts , hurricane aid , infrastructure , the wall


Fiscal year 2018 starts Oct 1 , also starts 60 votes in Senate needed ?

Edited by ALF
Link to comment
Share on other sites

Can someone explain to me like I'm five how the Alternative Minimum Tax which was instituted in 1969 because 155 people who earned over $200,000 a year and used their legal deductions to minimize their Federal tax liability to zero, and which AMT was "tied to inflation" in 2013, currently gets tripped if you make only $54,300 (in 2017)? :blink:

"You could owe AMT if taxable income for these tax years exceeds: Filing status 2016 tax year 2017 tax year Single or head of household $53,900 $54,300 Married, filling separately $41,900 $42,250 Married, filing jointly $83,800 $84,500

The AMT rejects or reduces many common tax breaks used every year by individual taxpayers to lower their IRS bills.

For example, under the AMT:

  • You cannot deduct state and local taxes.
  • If you are 65 or older, have lots of itemized medical deductions and fall into the AMT, you’ll lose some of those write-offs.
  • Miscellaneous itemized deductions, which must exceed 2 percent of your adjusted gross income under the regular tax system, are disallowed under the AMT.
  • Personal exemptions may be disqualified.
  • While mortgage interest on your main and second home is still AMT-deductible, home equity loan interest is restricted. It can’t be deducted unless the money is used solely to pay for home improvements.
  • Real estate property taxes also are disallowed as deductions under the AMT.
  • Some tax credits that reduce your regular tax liability do not reduce what you owe under the AMT. Once you add back these disallowed credits and run the numbers, you might be subject to a bigger IRS bill if your taxable income exceeds the annual AMT exemption amount for your filing status.
  • Many of the tax breaks not allowed under the AMT system do affect predominantly wealthy individuals or businesses with complicated tax circumstances. These include:
    • Incentive stock options.
    • Intangible drilling costs.
    • Tax-exempt interest from certain private activity bonds.
    • Depletion and accelerated depreciation on certain leased personal or real property."

​​​Sourcehttp://www.bankrate.com/finance/taxes/alternative-minimum-tax-costly-complicated-1.aspx

Edited by Nanker
Link to comment
Share on other sites

AMT is always hilarious at accounting firms.

 

One time a junior staffer told me he told the client he was getting a $75,000 refund, but after he remembered AMT the client now owed $25,000.

 

So he asked me if he should tell the partner that the client would be expecting something different from what he was last told.

 

I told the staffer to go with his conscience. It was a Friday, so he went home before that 4pm meeting.

Link to comment
Share on other sites

Can someone explain to me like I'm five how the Alternative Minimum Tax which was instituted in 1969 because 155 people who earned over $200,000 a year and used their legal deductions to minimize their Federal tax liability to zero, and which AMT was "tied to inflation" in 2013, currently gets tripped if you make only $54,300 (in 2017)? :blink:

"You could owe AMT if taxable income for these tax years exceeds: Filing status 2016 tax year 2017 tax year Single or head of household $53,900 $54,300 Married, filling separately $41,900 $42,250 Married, filing jointly $83,800 $84,500

 

That's wrong. Those numbers are the exemptions; the AMT starts at $175k. Basically, if you're single and make $175k and are subject to the AMT (using whatever arcane determination they use), you're required to take the $53,900 standard deduction instead of your itemized deductions.

 

That's accurate in general terms, if not so much on the details.

Link to comment
Share on other sites

The only time I came across it was someone at year-end trying to put their work bonus into the tax-deferring retirement plan in Canada, can't put $250,000 in one shot just to avoid tax....

 

It was put in because of people whining that there "are 10 billion trillionaires who never pay a penny in tax" and the Resentful People demanded something be done about this.

 

So they went after the "rich people" but that is now defined as those who make $54,300 in this day and age.

 

well played!

Link to comment
Share on other sites

The CBO score for this latest tax plan will be a real doozy. So much for revenue neutral

That will be partially attributed to their aversion of the concept of dynamic scoring.

 

If the measures produce growth then there would be higher collections. For some odd reason the CBO tends to discount these potential growth policies, I'm guessing because it is too abstract for them to quantify.

Link to comment
Share on other sites

Maybe it's because they have been marinating in a no-growth economy for so long and the great stimulous efforts of the Summers of Recovery I, II, III, IV, V, VI, and VII produced 2% growth in spite of the Herculean efforts of the central socialist government.

 

If the best efforts of the central socialist government gets puny results like that after spending trillions, then they're in disbelief that not forcibly taking money from the citizenry and letting the great unwashed keep it for their own use will produce any greater economic growth. All they can "see" is the central socialist government would be taking in less.

 

Pay no attention to the 30 million unemployed people standing behind that curtain! They need another 99 weeks of unemployment benefits more than they need jobs.

The great and powerful CBO has spoken!

Edited by Nanker
Link to comment
Share on other sites

  • 2 weeks later...

Never understood why this shocks or upsets anyone. The media will then carve it up, saying that the cuts do nothing for those who don't make enough to owe income taxes. Then they will dismiss the cut that I will receive as " insignificant" , even if it would be thousands of dollars! What they forget is that it's OUR money, not the government's. Paying less to the government and keeping more of what we earn is always a good thing.

Link to comment
Share on other sites

Never understood why this shocks or upsets anyone. The media will then carve it up, saying that the cuts do nothing for those who don't make enough to owe income taxes. Then they will dismiss the cut that I will receive as " insignificant" , even if it would be thousands of dollars! What they forget is that it's OUR money, not the government's. Paying less to the government and keeping more of what we earn is always a good thing.

Yes, it is our money. But its also our government, our military, our health care, our roads, our space program and our stupid boarder wall and our bill to pay it. Those with the most should pay the most. Spoiled brats want things like super expensive boarder wall but don't want to pay for it, literally! "Mexico will pay" lol.

Link to comment
Share on other sites

Republicans have been harping on having a balanced budget with no deficit for years. Will the new tax plan and spending cuts do that? Shouldn't they be aiming for a surplus, so we can pay down our debts?

No they won't. They didn't under Reagan or Bush Jr. when they cut taxes. I just wish Republicans would be honest and say cutting taxes will add to our deficit but we believe it's worth it as our goal is to put millions back to work.

Link to comment
Share on other sites

No they won't. They didn't under Reagan or Bush Jr. when they cut taxes. I just wish Republicans would be honest and say cutting taxes will add to our deficit but we believe it's worth it as our goal is to put millions back to work.

In this economy? You think we have underemployment now?

Link to comment
Share on other sites

Republicans have been harping on having a balanced budget with no deficit for years. Will the new tax plan and spending cuts do that? Shouldn't they be aiming for a surplus, so we can pay down our debts?

 

Is this your drop the mic moment?

 

No one will argue that cutting taxes will increase the deficit in the short term.

 

The real question, however is which is the better fiscal policy for the long term, stimulating higher economic growth, allowing more cash to flow through the private sector, slowing the runaway spending - or - maintaining anemic economic growth, soaking a disproportionate share of earners with higher taxes and exploding the spending?

 

Which one of the two isn't sustainable forever?

Link to comment
Share on other sites

×
×
  • Create New...