Biden infrastructure/tax increase megathread

[True Federalist (진정한 연방 주의자)]

What is SALT and why does it matter?

A tax deduction that allows high tax states to fund social services, like schools, without needing insanely high tax rates.

Why is Biden against it?

That is misleading ,

SALT is an itemized deduction that lets you deduct State and Local taxes on your tax return . Keep in mind that the deduction is only beneficial if you have total itemized deductions of over $12,400 for singes  and $24,800 for joint filers .

So basically unless you are already pretty affluent, that deduction will very likely not benefit you

No....

Just no, look at the map I posted earlier, it puts this myth to rest.

Do you know that you can’t even deduct state and local taxes if you don't use the itemized deduction

FTFY

But yeah, capping the SALT deduction at $10,000 doesn't really have much of an effect except on the wealthy. Not only because the wealthy are more likely to have more than $10,000 in State And Local Taxes, but because it's a tax deduction, not a tax credit, so someone in a high tax bracket benefits more than someone in a low tax bracket from the same amount of SALT.

[True Federalist (진정한 연방 주의자)]

What is SALT and why does it matter?

A tax deduction that allows high tax states to fund social services, like schools, without needing insanely high tax rates.

Why is Biden against it?

That is misleading ,

SALT is an itemized deduction that lets you deduct State and Local taxes on your tax return . Keep in mind that the deduction is only beneficial if you have total itemized deductions of over $12,400 for singes  and $24,800 for joint filers .

So basically unless you are already pretty affluent, that deduction will very likely not benefit you

No....

Just no, look at the map I posted earlier, it puts this myth to rest.

Do you know that you can’t even deduct state and local taxes if you dont use the itemized deduction

Yeah, I haven't been able to deduct them since they approx doubled the standard deduction and took away the exemption for yourself. Because I'd lose money if I itemized.

which is obviously not true although this year they are allowing people to deduct up to $300 of cash based charitable contributions even you itemize.

Uggh, wish I'd known about that before I did my taxes. I could have took that. Haven't been able to take the charitable deduction the last few years, for the same reason.

You can file a 1040X amended return.

[True Federalist (진정한 연방 주의자)]

I’ve looked at this lab further and it’s really a major major disappointment.

A true major infrastructure bill would not only garner overwhelming support but would put more tangible evidence of this administration and congress getting things done

The bill needs to focus on simply: a faster safer power grid, rural broadband, nationwide 5G, new water lines, some highway improvements, new sage & symbolic bridges, improved airports and as much as $450B in rail expansion.

The plan out there comes woefully short of the mark

Rail?  The freight rail system is largely fine and does not need government subsidy. Passenger rail is largely a pipedream. HSR suffers from the problem that in most places where there is sufficient density to make it potentially operationally viable once built, the construction costs are staggering.

[True Federalist (진정한 연방 주의자)]

I’ve looked at this lab further and it’s really a major major disappointment.

A true major infrastructure bill would not only garner overwhelming support but would put more tangible evidence of this administration and congress getting things done

The bill needs to focus on simply: a faster safer power grid, rural broadband, nationwide 5G, new water lines, some highway improvements, new sage & symbolic bridges, improved airports and as much as $450B in rail expansion.

The plan out there comes woefully short of the mark

Rail?  The freight rail system is largely fine and does not need government subsidy. Passenger rail is largely a pipedream. HSR suffers from the problem that in most places where there is sufficient density to make it potentially operationally viable once built, the construction costs are staggering.

The construction costs are staggering but that’s a problem with contractors ripping the government off. So because of that we are supposed to just say “Nah won’t work”? This is the United States - at one point and time we were the DO’ers who got things done. But now investment that is needed is a pipe dream?

The whole reason air travel took over rail travel for domestic trips was because it wasn’t just faster but was light years faster. And for long haul flights that’s still the case. But for short distances flights HSR has technology now to compare to flying - especially when you factor in travel to an airport, check in, security and the whole process. Not to mention the price difference.

High Speed Rail creates many construction jobs in the short term and in the long term improves connectivity between cities and economies - and spurs a ton of growth in smaller secondary cities.

There are 3 or 4 corridors in the US that would be absolute cash cows if built. And it is possible if we got our act together as a nation (that goes for our power grid, broadband, water, bridges, hospitals and schools as well). China has built a MASSIVE HSR network in 12 years. TWELVE YEARS. By massive I mean massive. Lines that travel up to 250mph.

WITH ALL THAT BEING SAID....

When I was talking about rail I was focusing centrally on local mass transit. Take Los Angeles for instance. The reason why driving is still the preferred commuting method over rail (like it is in NY) is because their network is half ass. Too many grade crossings, lines that don’t connect well - on and on.
The current Sepulveda pass which is in the planning stages is a perfect example of why investment is needed. That project would literally turn a corridor that has such stifling traffic it’s amongst the worst in the WORLD and easily the worst in North America. If that line is built properly in an instant you’ll have a single line with more riders in a day than every other ENTIRE network in the US other than NY. That’s hundreds of thousands of riders PER DAY and hundreds of thousands of cars off the route with the worst traffic on the continent. Currently the proposed cost of the project is beyond what the local transportation taxing measure will pay for, so because of that LA METRO is working with two private companies for a public private partnership. One is a tradition heavy rail subway that would be done right. But the other potential PPP proposes doing a monorail - a technology out of date, out of sync with the rest of LA’s system. In its mono rail proposal most of the stations are planned to be BESIDE the freeway - people want to take rail mass transit because it brings them directly to their destination not to be taken to a parking lot next to the free way! and worst of all it’s plans don’t even include a stop at the cooridors biggest ridership driver (UCLA). So what’s my point? If this Biden infrastructure bill allotted $8 Billion to this project (the gap between the $5B set aside for it & the $13b estimated cost) you could have a project that would do wonders for the entire Los Angeles region.

There are also two other projects in LA that would bring in ENORMOUS ridership and likely turn the preferred method of commuting to rail - one which has a $4B funding gap (Crenshaw North) and the other which is ENTIRELY not funded (Vermont Ave Red Line extension, cost $10B). $22B that would change that region FOREVER.

Then you New York City. The flagship city of this nation who has a large and extensive rail network but one that is in hideous shape. You have cities like London, Paris and virtually all major Asian cities with huge networks where every station is at minimum modern and clean. The city needs an estimated 8 billion to modernize every single station on the network. There are also areas of expansion that are badly needed. The Second Avenue Subway or lack of it has created log jams on the rail networks, in the cab network and on the roads. It’s a project proposed for 3 quarters of a century before a portion of it (3 stations) were completed in 2017. The project should be completed. There’s the proposed Utica Avenue Subway which is needed because there is a large swath of Southeast Brooklyn with no mass transit (this isn’t Boise, this is BROOKLYN). Then there’s the fact that NYC’s second airport has no rail connection to it... imagine how much that would change traveling. There’s the outter borough proposal that would take enormous strain off of the system. States Island has needed a rail connection for a century. Then there’s the needed improvements for connection to NJ.

Austin is the fastest growing city in the US. It just recently passed a measure to build a rail network. But from the looks of it - it’ll need more funding. Dallas has a light rail network but it’s central line that runs through downtown is at grade and isn’t grade separated - a proposal to put that line under ground and build a second downtown subway would likely make use of DART significantly more popular due to its added efficiency. Boston is one of the most mass transit dependent cities in the nation and  has a few projects that would have major impact: the North South Rail link that would connect its Northern commuter rail lines and its Southern Commuter Rail lines - allowing for a state wide network of passenger  electric rail and potentially open up potential for a subway traveling through the greenway and potentially into the under served seaport - there is the Blue extension which would give direct airport access to close to the entire North Shore and would take away congestion on Route 1A.

I could go on and on and on and on. Rail might seem like a pipe dream to those not living in transit dependent cities but it can do wonders for a region if executed properly and with all this money being thrown around - to tell me these badly needed projects can’t be paid for is a joke.

The issue of construction costs is something the government needs to crack down on. Or simply attach provisions for cost overruns into projects.

The main cost problem isn't construction costs, but land acquisition costs in built up areas. It wasn't just racism that caused many of our urban freeways built in the 50s and 60s to plow through minority communities, but also the fact that they were often the lowest cost routes that could be acquired.

[True Federalist (진정한 연방 주의자)]

I don't necessarily support eliminating the cap, but I would support raising it to affect only the highest of earners.

Isn't already? Take a look at the graph.

I mean the votes are in the House to kill it, if it isn't included, maybe they agree to raise the cap to a level where only the truly wealthy are affected, like say $70k or so.

Man, the following caclulations are probably somewhat misleading, but it is what it is. $4. Ok, may be $400.

https://www.crfb.org/blogs/repealing-salt-caps-would-cost-another-500-billion

Man, Pelosi is such a great messenger. Otherwise, how could she make "progressives" to defend this? She could easily make people to re-open the schools that would greatly benefit poor kids. Well, donors are more important, I guess.

I'm very much aware of what eliminating the SALT cap would do. It makes blue states more attractive to higher earners. These are people that can deduct state and local taxes from federal taxes. This makes it easier for those states to maintain higher tax rates and pay for more generous social welfare programs. What happens with the SALT cap? Many high earners move out of California and NY and move to Texas and Florida. The latter are both states that have refused to expand their Medicaid programs even though the federal government pays for 90% of the tab (and under a new program, they would get even more funds for traditional Medicaid).

Didn't you just say that you wanted to make this tax to "affect only the highest of earners". Because it literally what Trump did, he capped it in such way it affects basically only the highest of earners. At least according to these graph. Those with earnings under $500k won't get much. Those under $100k won't get nothing at all.

Or, do you want to repeal it to make blue states more attractive to the highest of earners. Fair enough. But you can't have both.

Actually, you can.  Just repeal the SALT cap and increase the highest tax bracket rates by 1 or 2 percent.

[True Federalist (진정한 연방 주의자)]

https://twitter.com/tax/status/1387156903936004099?s=21

This makes absolutely no sense. I can’t name a single better item to tax than estates.

Unless they reduced the limit to $100,000 or so, and put some stringent rules in place to limit trusts, the estate tax would never be a significant revenue generator. Biden is proposing tax increases to raise revenue, not own the rich.

[True Federalist (진정한 연방 주의자)]

I'm a bit confused about the capital gains tax increase. Would it create a tax cliff since it only applies to people whose income is over $1,000,000? Google searches aren't coming up with much detail.

I would presume this proposal adds a fourth bracket to the capital gains tax rates that starts at $1,000,000. In which case, it's not a tax cliff.

[True Federalist (진정한 연방 주의자)]

If Biden ends up pulling this off I believe the big lesson for both parties should be that experience really does matter. I understand that both sides want an outsider who has not been in Washington for too long, but just look at how that worked out for Trump when he tried to pass his health care bill and immigration reform or even Obama when he struggled to pass anything else after the ACA was signed into law in 2010.

The lesson that experience matters should have been learned after the Carter presidency.

[True Federalist (진정한 연방 주의자)]

If this passes, Biden goes down as a top 5 President

https://twitter.com/JStein_WaPo/status/1424727128944353283

As someone who does payroll for small businesses, I hope the paid leave doesn't kick in until at least 2022. The IRS has already been overwhelmed by changes to payroll taxes as part of various COVID relief measures, and I presume any permanent paid leave will be handled similarly to the emergency COVID paid leave. It needs both time and more people to ensure a smooth rollout of additional changes. It won't get the people, but it could use the time. We have clients that have been waiting months already to receive checks from the IRS for credits claimed. A last minute change kicking in for the fourth quarter would be rocky.

Of course, it could be worse, we could still be filling separate W-1 and SS-1 forms instead of the unified 941 form. (Prior to 1950, W-1 was the form employers filed with the IRS each quarter to document the amount of income tax that had been withheld from employee pay, SS-1 was the same idea, but for the employer and employee share of Social Security tax.)

[True Federalist (진정한 연방 주의자)]

If Biden ends up pulling this off I believe the big lesson for both parties should be that experience really does matter. I understand that both sides want an outsider who has not been in Washington for too long, but just look at how that worked out for Trump when he tried to pass his health care bill and immigration reform or even Obama when he struggled to pass anything else after the ACA was signed into law in 2010.

The lesson that experience matters should have been learned after the Carter presidency.

This is kind of ironic since Carter actually had more experience than Obama and Trump before he became president lol

unilke those 2 Carter was a Georgia state senator (1963–1967) and The Governor of Georgia (1971–1975)

The carter years shows us that this is a very tough job even for someone with a decent amount of experience and that is a big reason why both parties should not be trying to make 1 term junior senators or reality tv show stars the next president of the united states

Carter had zero Washington experience and his cabinet and staff were largely outsiders as well. Worse than that, they were proud of being outsiders and largely disdained Washington experience.