Tax "cut"

[Xan]

Do any of the tax proposals floating around make any sense to anyone? Am I correct that none of them are really "cuts": they have to be revenue-neutral or else the Democrats can filibuster them. So on its face it's hard to see an overall point to the exercise... And I really dislike the raising of the standard deduction (unless your real deductions can be added to it instead of replacing it), the elimination of deductions for taxes you're paying elsewhere, etc. I have yet to see anything particularly good about the proposals. I suppose the proposed cap of 25% tax on pass-through income could benefit me (maybe one day), but I don't understand it conceptually: why exactly shouldn't that be treated as ordinary earned income? It's already a much better deal than the double-taxation of income through a "real" corporation. I believe corporate income taxes should be zero, but that's another discussion I suppose.

Strategically, the Democrats will win the PR battle just sitting back and doing nothing. So the current strategy is a huge mistake for the Republicans. They should propose the bill they actually want, revenue-neutral or not, and then dare the Democrats to filibuster it. The reason they don't go this direction might be the deficit-hawk Republicans. Can we send them some information on Monetary Realism?

[Maddy]

I believe corporate income taxes should be zero, but that's another discussion I suppose.

Well, no time like the present. I, too, have always had difficulty understanding the double taxation of corporations. An even bigger mystery to me is the progressive position that corporations which take legitimate deductions for salaries and expenses, thereby reducing their taxable income to zero, aren't paying their fair share. Do they miss the fact that this income is taxed when it is distributed to, or earned by, an actual human being?

The 25% tax being proposed on pass-through entities: I've read articles that refer to a "25% cap" and others that refer to an across-the-board 25% tax. Is there any reason to worry that the tax being proposed on non-corporate businesses could result in a 25% rate for small business people who would otherwise fall into the lowest bracket?

[Tyler]

I personally really like the raising of the standard deduction and elimination of deductions for things like state, local, and property taxes. People are already whining that it disproportionately affects blue states and cities, but I'd argue that they haven't been paying their "fair share". The high cost of these areas is a choice, and I'd prefer not to subsidize that choice.

[ochotona]

The CARRIED INTEREST TAX LOOPHOLE has made it into tax bill. The swamp didn't get drained, it got bigger and more powerful.

https://www.bloomberg.com/news/articles ... n-tax-bill

[Xan]

I personally really like the raising of the standard deduction and elimination of deductions for things like state, local, and property taxes. People are already whining that it disproportionately affects blue states and cities, but I'd argue that they haven't been paying their "fair share". The high cost of these areas is a choice, and I'd prefer not to subsidize that choice.

For mortgage interest you might have a point. For taxes, though: how is that anything other than double taxation?

[moda0306]

I personally really like the raising of the standard deduction and elimination of deductions for things like state, local, and property taxes. People are already whining that it disproportionately affects blue states and cities, but I'd argue that they haven't been paying their "fair share". The high cost of these areas is a choice, and I'd prefer not to subsidize that choice.

If you look at who actually pays taxes into federal coffers, you'll notice that a lot of high-taxed blue states are big-contributers, and a lot of low-tax red states are the ones not paying their "fair share."

https://en.wikipedia.org/wiki/Federal_t ... e_by_state