$1.5 Trillion GOP Tax Cut Thread

[jaichind]

I assume the Senate plan also eliminates the Worthless Entitled Rich Kids Tax (the estate tax).

No. It keeps it but raises the threshold.  It is the same as the House plan except the House plan will completely remove the tax after a transition period (2023?) while the Senate plan will leave it in with a higher threshold.

[jaichind]

Senate keeps the endowment tax (yes !! And that is speaking as someone that went to Yale and gives to the Yale alumni fund) but keep student loan interest deduction (NO !!).  Frankly they do not go far enough.  I think universities should just bee taxed like any other business.  If they want to give financial aid, fine.  Just raise the price on everyone else so it can be paid for.   

[jaichind]

I don't know how the GOP can justify not giving people the SALT deduction which has been in the code for like a 100 years, almost since there was income tax.

One of the basic arguments will be to avoid double taxation. You are already paying state & local taxes, you should atleast be able to deduct that & not pay taxes on taxes already paid. The GOP argues about Death Tax for the Millionaire Estate Tax but would make people pay tax on tax.

I don't know how the Democrats can justify making people pay a medicare tax for dividends which has been exempt in the code for like a 50 years, almost since there was medicare.

One of the basic arguments will be to avoid double taxation.  Corporations already pay a corporate tax for profits but now we are asking for investors tho receive these dividends after tax to pay another tax on top of that.

[Tintrlvr]

Senate keeps the endowment tax (yes !! And that is speaking as someone that went to Yale and gives to the Yale alumni fund) but keep student loan interest deduction (NO !!).  Frankly they do not go far enough.  I think universities should just bee taxed like any other business.  If they want to give financial aid, fine.  Just raise the price on everyone else so it can be paid for.   

The endowment tax makes no sense. Why are some charities taxed on investments but not others? Will just result in absurd things like universities transferring parts of their endowments to associated non-profit hospitals in order not to pay the tax, or religiously affiliated colleges claiming to be churches so as to avoid treatment as educational endowments.

[Antonio the Sixth]

I assume the Senate plan also eliminates the Worthless Entitled Rich Kids Tax (the estate tax).

No. It keeps it but raises the threshold.  It is the same as the House plan except the House plan will completely remove the tax after a transition period (2023?) while the Senate plan will leave it in with a higher threshold.

Then yeah, I am willing to concede that the Senate plan is marginally but distinctly less awful than its House counterpart.

Still hoping this all falls apart, though.

[jaichind]

Senate keeps the endowment tax (yes !! And that is speaking as someone that went to Yale and gives to the Yale alumni fund) but keep student loan interest deduction (NO !!).  Frankly they do not go far enough.  I think universities should just bee taxed like any other business.  If they want to give financial aid, fine.  Just raise the price on everyone else so it can be paid for.   

The endowment tax makes no sense. Why are some charities taxed on investments but not others? Will just result in absurd things like universities transferring parts of their endowments to associated non-profit hospitals in order not to pay the tax, or religiously affiliated colleges claiming to be churches so as to avoid treatment as educational endowments.

I view a university as a business and not a charity.  BTW. I would also be for taxing charities.  If you want to help people, fine.  Why should the government subsidize that.  I think this entire charity deduction should go. 

[jaichind]

House plan
Rate       Single               Married, filing jointly
12%     Up to $45K           Up to $90K
25%     $45K–$200K        $90K–$260K
35%     $200K–$500K      $260K–$1M
39.6% More than $500K   More than $1M

Plus this bubble claw-back that starts at 1mil for single and 1.2 mil for married.

Senate plan
Rate      Single                  Married, filing jointly
10%     Up to $9,525        Up to $19,050
12%     $9,525–$38.7K     $19,050–$77.4K
22.5%  $38.7K–$60K        $77.4K–$120K
25%     $60K–$170K         $120K–$290K
32.5%  $170K–$200K       $290K–$390K
35%     $200K–$500K       $390K–$1M
38.5%   More than $500K   More than $1M

No bubble clawback.

So the Senate brackets are 10 12 22.5 25 32.5 35 38.5 vs 10 15 25 28 33 35 39.6

I am more in favor of the Senate plan more because of the removal of real estate deduction.    OK part of it is also because I do better under the Senate plan.  This stupid bubble claw-back hits me pretty bad and pretty much wipes out my gains.  And it is stupid.  I rather the House GOP call a spade a spade and raise the top rate to 41% or something like that.

[jaichind]

I have to do some more scenario analysis. But my initial read of the tax brackets numbers is that it seems in the Senate plan most of the revenue saved by the delay of the corporate tax cut mostly went to upper income personal tax reductions relative to the House plan with the benefits going to those around 250K and above with the benefit getting bigger as income goes up.  

If the goal is to keep the code progressive at the personal income side the House plan does that more than the Senate plan.  Both will be a hit for Blue Sate high income tax payers but the House hit is greater.

[OSR stands with Israel]

Honestly, the Senate Bill looks decent. The bottom tax bracket is kept at 10% instead of being raised, the existing 7 bracket system is kept with only slight rate reductions, and a bunch of worthwhile deductions that are eliminated in the house bill are kept in the Senate Bill. I also like the fact that the corporate reduction isn't in full effect until a year has passed. I would prefer that some of SALT is kept, but whatever. Really, my only major grievance with this is the deficit increase, and that's not enough on its own for me to oppose this.

I mean what the hell is the point of even doing this if you are going to keep the same number of brackets.

Taxes still get cut for everyone , and Businesses no longer have to pay the highest tax rate in the industrialized world

[Attorney General & PPT Dwarven Dragon]

Politico is featuring this opinion article, which is throwing Cold Water on this tax reform thing actually passing: https://www.politico.com/agenda/story/2017/11/10/gop-tax-plan-programs-face-the-ax-000581

[Statilius the Epicurean]

If this Congress can't pass tax reform then the GOP will collapse

That's why they are guaranteed to pass something at least

[#gravelgang #lessiglad]

Politico is featuring this opinion article, which is throwing Cold Water on this tax reform thing actually passing: https://www.politico.com/agenda/story/2017/11/10/gop-tax-plan-programs-face-the-ax-000581

If this Congress can't pass tax reform then the GOP will collapse

That's why they are guaranteed to pass something at least

This is why I think the most likely outcome is a small cut in rates across the board that would cumulatively cost $1.5T.

[Shadows]

I don't know how the GOP can justify not giving people the SALT deduction which has been in the code for like a 100 years, almost since there was income tax.

One of the basic arguments will be to avoid double taxation. You are already paying state & local taxes, you should atleast be able to deduct that & not pay taxes on taxes already paid. The GOP argues about Death Tax for the Millionaire Estate Tax but would make people pay tax on tax.

I don't know how the Democrats can justify making people pay a medicare tax for dividends which has been exempt in the code for like a 50 years, almost since there was medicare.

One of the basic arguments will be to avoid double taxation. Corporations already pay a corporate tax for profits but now we are asking for investors tho receive these dividends after tax to pay another tax on top of that.

Irrelevant. Corporation is a separate legal entity & is paying income taxes. Dividend tax in not a new thing as a concept. While the corporation are paying taxes on it, the individual people aren't. In general, Capital gains & income from investments are taxed at fairly moderate levels. Anyways, we will disagree on this so...

[Frodo]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

[Attorney General & PPT Dwarven Dragon]

I am proud to officially endorse the Senate Tax Plan. I call on Congress to Unite behind it and pass it as quickly as possible.

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

[Beet]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Same here. There may still be something they are leaving out, but it looks okay so far.

[Frodo]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag.

It's still early in the process, though.    

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag. 

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

[Ban my account ffs!]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag. 

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

And jaichind i'm sure is happy about it.  But he also thinks $750,000/year is middle class.

[True Federalist (진정한 연방 주의자)]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag. 

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

So what you're saying is that a year of grad school isn't actually worth the $30+ sticker price? Regardless of whether it's feasible, there's no denying that it is income. Income is not the same as cash flow. This is far from the most painful example of that. If you get a debt cancelled because the lender figures you'll never pay them back, the debt cancellation is treated as taxable income and Uncle Sam has ways of making you pay that aren't available to private lenders.

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag. 

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

So what you're saying is that a year of grad school isn't actually worth the $30+ sticker price? Regardless of whether it's feasible, there's no denying that it is income. Income is not the same as cash flow. This is far from the most painful example of that. If you get a debt cancelled because the lender figures you'll never pay them back, the debt cancellation is treated as taxable income and Uncle Sam has ways of making you pay that aren't available to private lenders.

Well:

1) No, it's not worth it, but that's not the issue at hand.
2) It is not income. I am not seeing that money, and I don't have the ability to invest it or use it as I wish as if it were actual income.
3) This is not a debt cancellation; this is a waving of charging you something (100% discount). By your logic, states should start taxing coupon sales and the like (Buy 1, Get 1 Free [+taxes on what you didn't pay]). Got a discount? Pay taxes on the full price even though the price you're paying is lower. It's ridiculous.

[jaichind]

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

And jaichind i'm sure is happy about it.  But he also thinks $750,000/year is middle class.

Conceptually I do not agree with that part of the tax plan.  I agree that a stipend should really not be taxed as income since it is meant to be used on a particular product.  What I would say is that tax regulations should be changed so that if the stipend were dependent on the graduate student doing certain labor for the department or professor then that should be split out and the value of that work be taxed as income. But beyond that I fail to see why a stipend should be taxed as income since it is really a discount on a product.  Of course there are plenty of other aspects of this plan I do not agree with (it should zero out all deductions like charity, mortgages as well as SALT etc etc.)   But overall it moves in the right direction and I will be glad to support a likely compromise version between the House and Senate versions.

[True Federalist (진정한 연방 주의자)]

1) No, it's not worth it, but that's not the issue at hand.
2) It is not income. I am not seeing that money, and I don't have the ability to invest it or use it as I wish as if it were actual income.
3) This is not a debt cancellation; this is a waving of charging you something (100% discount). By your logic, states should start taxing coupon sales and the like (Buy 1, Get 1 Free [+taxes on what you didn't pay]). Got a discount? Pay taxes on the full price even though the price you're paying is lower. It's ridiculous.

1) Actually that is exactly the issue at hand.
2) I repeat, since you clear ignored the point, income is not synonymous with cash flow. You've chosen a job which includes payment of your tuition as part of the pay package.
3) I never said it was the same as debt cancellation. I used that as an example of income that doesn't involve cash flow. What it is, is an employee benefit. Some benefits get taxed, some don't. This change involves changing it from tax-free to taxable. Incidentally, unless they're getting rid of the entire employer educational benefit provision, the first $5,250 of assistance each year will still be tax-free, just as it would be if you were getting tuition assistance from any other employer. For that matter, with a little creative accounting, they might be able to split your job among multiple employers, say by having you hired by the professor you're assisting for each course/field of research, so as to get that $5,250 multiple times,  assuming you assist more than one professor.

[Dr. Arch]

1) No, it's not worth it, but that's not the issue at hand.
2) It is not income. I am not seeing that money, and I don't have the ability to invest it or use it as I wish as if it were actual income.
3) This is not a debt cancellation; this is a waving of charging you something (100% discount). By your logic, states should start taxing coupon sales and the like (Buy 1, Get 1 Free [+taxes on what you didn't pay]). Got a discount? Pay taxes on the full price even though the price you're paying is lower. It's ridiculous.

1) Actually that is exactly the issue at hand.
2) I repeat, since you clear ignored the point, income is not synonymous with cash flow. You've chosen a job which includes payment of your tuition as part of the pay package.
3) I never said it was the same as debt cancellation. I used that as an example of income that doesn't involve cash flow. What it is, is an employee benefit. Some benefits get taxed, some don't. This change involves changing it from tax-free to taxable. Incidentally, unless they're getting rid of the entire employer educational benefit provision, the first $5,250 of assistance each year will still be tax-free, just as it would be if you were getting tuition assistance from any other employer. For that matter, with a little creative accounting, they might be able to split your job among multiple employers, say by having you hired by the professor you're assisting for each course/field of research, so as to get that $5,250 multiple times,  assuming you assist more than one professor.

1) Costs of almost everything in this country are inflated.
2) Fine, but I'll let you know that the contract states that the tuition remission is part of the benefits, not a supplementary payment to my income, which is already stupid low.
3) Not feasible. Tuition remission is calculated differently from tuition. In this university, the hiring body pays the university $8,000 to have the tuition waived for a year. The university is actually charging itself less. If you start having to break it down, there will not be enough resources to maintain the graduate student population.

I'm already working about 60%, while being paid for 40%. On top of that, I pay segregated fees equal to about 8% of my income ($1,300 a year at this point). On top of that, I pay taxes on the income I receive. And now you want to tax me as if I were earning $50,000? I don't have the time to work another job to cover for that, so you're forcing a workforce to go into debt while working. That's really screwed up. This country does not value the resources that come with having an educated workforce. In the long run, we will lose to other countries that do. That's why the U.S. has been falling behind on everything but weapons. Oh, the irony.