Tax plan

[TGHusker]

David Stockman, Reagan's former budget chief, says Trump's tax plan: DOA Too many goodies not enough money to pay for it - a disaster in the making.

 

http://www.newsmax.com/Finance/StreetTalk/David-Stockman-Trump-Tax-Plan/2017/04/30/id/787314/

 

"It's a wonderful fantasy,” he said of Trump’s tax proposal. “But there's no way to pay for the $7.5 trillion cost of the main features," he contended.

"I like [the tax plan] but you have to pay for it either with a new tax like the border adjustment tax, which is dead, or spending cuts which Trump has ruled off the table," Stockman explained. "What you have down there is a total fiscal calamity that is going to basically dominate Washington," said Stockman, who served as a Republican U.S. Representative from the state of Michigan (1977–1981).

Of Trump's first 100 days in office, Stockman again referred to the White House as a "pop up store giving out candy before the 100th day to say they've accomplished something." Adding, "this isn't a serious plan, it can't be done. And I think it's only indicative of the huge trouble that's brewing down there in the beltway," he said.

"I don't know what the stock market is thinking but if they have faith in a giant fiscal stimulus and tax cut then it's a delusional faith that's going to be badly disappointed and I think fairly soon," he added.

[BigRedBuster]

 

What would be too much?

Depends on how much you brought home after taxes, not the rate IMO. As long as the rate left you with more than the cost of living then it's not making you poor, but I'd want the rate to be less than that so call it somewhere around 1.5 to 2 times the COL. And I'm not tied to those numbers, just the idea that the tax rate isn't the determining factor.

 

Seriously?????

 

So...let's say living in central Nebraska, I could live off of $40,000. Then....let's say I start a company and through my own financial sacrifices grow it to be a major company. Let's say along those lines I had to struggle for a number of years putting more and more of my own resources at risk and at times losing quite a bit of them. But...now the company is growing and prospering. Let's say I now am bringing home $500,000 per year.

 

You think it isn't out of line to tax me so that I am only bringing home somewhere between $60,000 - $80,000 per year? That's an 84% tax rate.

 

Let's say I am a surgeon that just got out of college with $400,000 debt and want to practice in central Nebraska. You're saying that after all of the college and all my debt, I can only bring home maybe $70,000 per year and all the rest should go to the government???

 

 

The line of "too much" doesn't come somewhere before that?????

[RedDenver]

 

 

What would be too much?

Depends on how much you brought home after taxes, not the rate IMO. As long as the rate left you with more than the cost of living then it's not making you poor, but I'd want the rate to be less than that so call it somewhere around 1.5 to 2 times the COL. And I'm not tied to those numbers, just the idea that the tax rate isn't the determining factor.

 

Seriously?????

 

So...let's say living in central Nebraska, I could live off of $40,000. Then....let's say I start a company and through my own financial sacrifices grow it to be a major company. Let's say along those lines I had to struggle for a number of years putting more and more of my own resources at risk and at times losing quite a bit of them. But...now the company is growing and prospering. Let's say I now am bringing home $500,000 per year.

 

You think it isn't out of line to tax me so that I am only bringing home somewhere between $60,000 - $80,000 per year? That's an 84% tax rate.

 

Let's say I am a surgeon that just got out of college with $400,000 debt and want to practice in central Nebraska. You're saying that after all of the college and all my debt, I can only bring home maybe $70,000 per year and all the rest should go to the government???

 

 

No. I'm saying that's the minimum amount that you'd always take home. I support the idea that making more means you should take home more, so somebody making $500k should have more after taxes than somebody making $100k or $60k or whatever.

 

Here's an example to give a better idea of what I mean:

The federal poverty level is around $22k/yr for a family of four, so let's imagine that's the COL. Using a multiplier of 1.5, the minimum taxable income would be $33k. So no one would pay any taxes on their first $33k/yr. Now we set the tax rates above $33k to meet the federal spending needs. So imagine a fixed tax rate (no deductions or loopholes for simplicity) of 10% for the $33k-$50k bracket, 20% for $50k-$100k, 30% for $100k-$200k, 40% for $200k-$1 million, and 50% above $1 million. I don't care about the rates or the brackets, so if you don't like those ones, pick different ones, as long as they meet the federal spending need. (And I don't mean the fed has to balance the budget every year, but enough tax revenue to cover the expenditures over time.)

 

If we use your $500k number with my imagined brackets, then you'd take home: $33k+.9*($50k-$33k) + .8*($100k-$50k) + .7*($200k-$100k) + .6*($500k-$200k) = $338,300 (for an effective rate of 32%)

a $50k income has an after-tax take-home = $48,300 (effective tax 3.4%)

a $10 million income has an after-tax take-home = $5.8 million (effective tax 49%)

 

There's another side to this discussion - what the taxes being used for. If the government is paying for your healthcare, college, medial school, whatever, then the amount we should expect to pay would change. If your healthcare is covered, then you need less money to cover it yourself while the government needs more.

 

So let's imagine much higher rates to cover additional costs (arbitrarily picking 15% for $33k-$50k, 30% for $50k-$100k, 50% for $100k-$200k, 75% for $200k-$1 million, and 90% above $1 million):

your $500k has after-tax take-home = $207,450 (for an effective rate of 59%)

a $50k income has an after-tax take-home = $47,450 (effective tax 5%)

a $10 million income has an after-tax take-home = $1.2 million (effective tax 88%)

 

All of that is a long way of saying, your tax rate doesn't mean as much as what you keep after taxes. So I can't say that your 40% effective rate is too high without knowing what the government is leaving you with at the end.

[BigRedBuster]

 

 

 

What would be too much?

Depends on how much you brought home after taxes, not the rate IMO. As long as the rate left you with more than the cost of living then it's not making you poor, but I'd want the rate to be less than that so call it somewhere around 1.5 to 2 times the COL. And I'm not tied to those numbers, just the idea that the tax rate isn't the determining factor.

 

Seriously?????

 

So...let's say living in central Nebraska, I could live off of $40,000. Then....let's say I start a company and through my own financial sacrifices grow it to be a major company. Let's say along those lines I had to struggle for a number of years putting more and more of my own resources at risk and at times losing quite a bit of them. But...now the company is growing and prospering. Let's say I now am bringing home $500,000 per year.

 

You think it isn't out of line to tax me so that I am only bringing home somewhere between $60,000 - $80,000 per year? That's an 84% tax rate.

 

Let's say I am a surgeon that just got out of college with $400,000 debt and want to practice in central Nebraska. You're saying that after all of the college and all my debt, I can only bring home maybe $70,000 per year and all the rest should go to the government???

 

 

No. I'm saying that's the minimum amount that you'd always take home. I support the idea that making more means you should take home more, so somebody making $500k should have more after taxes than somebody making $100k or $60k or whatever.

 

Here's an example to give a better idea of what I mean:

The federal poverty level is around $22k/yr for a family of four, so let's imagine that's the COL. Using a multiplier of 1.5, the minimum taxable income would be $33k. So no one would pay any taxes on their first $33k/yr. Now we set the tax rates above $33k to meet the federal spending needs. So imagine a fixed tax rate (no deductions or loopholes for simplicity) of 10% for the $33k-$50k bracket, 20% for $50k-$100k, 30% for $100k-$200k, 40% for $200k-$1 million, and 50% above $1 million. I don't care about the rates or the brackets, so if you don't like those ones, pick different ones, as long as they meet the federal spending need. (And I don't mean the fed has to balance the budget every year, but enough tax revenue to cover the expenditures over time.)

 

If we use your $500k number with my imagined brackets, then you'd take home: $33k+.9*($50k-$33k) + .8*($100k-$50k) + .7*($200k-$100k) + .6*($500k-$200k) = $338,300 (for an effective rate of 32%)

a $50k income has an after-tax take-home = $48,300 (effective tax 3.4%)

a $10 million income has an after-tax take-home = $5.8 million (effective tax 49%)

 

There's another side to this discussion - what the taxes being used for. If the government is paying for your healthcare, college, medial school, whatever, then the amount we should expect to pay would change. If your healthcare is covered, then you need less money to cover it yourself while the government needs more.

 

So let's imagine much higher rates to cover additional costs (arbitrarily picking 15% for $33k-$50k, 30% for $50k-$100k, 50% for $100k-$200k, 75% for $200k-$1 million, and 90% above $1 million):

your $500k has after-tax take-home = $207,450 (for an effective rate of 59%)

a $50k income has an after-tax take-home = $47,450 (effective tax 5%)

a $10 million income has an after-tax take-home = $1.2 million (effective tax 88%)

 

All of that is a long way of saying, your tax rate doesn't mean as much as what you keep after taxes. So I can't say that your 40% effective rate is too high without knowing what the government is leaving you with at the end.

 

OK....I understand this. But, my question was more simple than obviously the thought you put into this.

 

My question simply was....what percentage of someone's income should the government legally be able to take. No matter if they are making $20,000 or $1,000,000 per year. Is there a percentage of that that makes you start to say.....Oooooo.....we shouldn't be doing that????

 

The way you answered it made it sound like you would be fine taxing everyone so that their take home would have been the $33,000.

[BigRedBuster]

 

WASHINGTON — President Trump says the perfect medicine for the economy’s sluggish growth is a big tax cut.

Mr. Trump and his advisers say that leaving more money in the hands of businesses and consumers will lead to more spending and investment, lifting economic growth, which has been stuck in a 2-percent-a-year rut.

Indeed, the Trump administration insists its tax plan will be so good for growth that the federal government won’t even lose any revenue. The government will simply get a smaller share of a much larger pie.

But a range of economists, both conservative and liberal, are highly skeptical that a tax cut is the cure for what ails the economy. They say Mr. Trump has little opportunity to increase economic growth in the next few years because the economy is already growing about as fast as it can. The government’s focus, they say, should be on raising the economy’s speed limit, for example, by encouraging investments that increase productivity.

 

[zoogs]

Yeah, but why listen to economists, right? Bunch of fact-stuffed intellectual elites.

[BigRedBuster]

Maybe we need a thread basically talking about the budget. Or...turn this one into one.

 

 

See the problem? Trump is not only counting on supply-side magic growth to make his numbers work, he’s using the same magic bean twice. First the tax cuts provide enough extra growth to make the tax reform deficit neutral. Then the deficit neutral tax reform provides enough extra growth to make the overall budget balanced. It’s ridiculous. Larry Summers, the former Treasury secretary and National Economic Council director, calls it “a logical error of the kind that would justify failing a student in an introductory economics course.”

 

[QMany]

[Danny Bateman]

Here's another one:

 

 

That first article said Trump ordered changes to his original tax-plan (revenue-neutral) to its current state based on an Op-Ed by Steve Forbes, Larry Kudlow, a former Club for Growth president & the guy who invented the Laffer curve. They argued for massive deficit-ballooning tax cuts, and Trump agreed.

 

When Mulvaney defends this budget, he's basically pretending it's deficit-neutral because it's easy for him. But it's not.

 

Man, the incompetence.

[BigRedBuster]

 

Trump’s Budget Is Built On A Fantasy

 

President Trump’s first budget, released Tuesday, is not going to become law. First, because presidents’ budgets never become law, not the way they’re initially proposed. And second, because the specifics of Trump’s fiscal 2018 budget — enormous cuts to nearly every significant government program other than defense, Social Security and Medicare in order to pay for huge tax cuts that would go disproportionately to the wealthy — seem designed to alienate not just Democrats (at least a few of whom Trump needs to get his budget through the Senate) but also moderate Republicans and the public at large. Trump likely knows this; the White House released the budget while he is thousands of miles away on his first foreign trip as president.