$1.5 Trillion GOP Tax Cut Thread

[Southern Senator North Carolina Yankee]

The 1980s tax cuts did create economic growth , and the reason for the deficits were not cause of the tax cuts but because of the spending increases .


Here look at the total tax revenue per year and look at the 1980s : https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 . It's clear that it was the increas in spending what caused the deficits not the tax cuts . Also the economy did grow from 1986 -1990 just look at the increase in revenue during those years .

Lastly on the increase in revenue over a decade :


In the 1980s revenue went up from 517 billion to  991 billion which is an increase of 91.68 percent

In 1990s revenue went up from 1.03 trillion to 1.82 trillion which is an increase of 79 percent , and even if you include 2000 numbers tax revenue went up by 97.08 percent .


That means despite the tech boom of the 1990s the increase of revenue was barely more then the increase in the 1980s and that is if you include the 2000 numbers .

I suppose you don't want to talk about how the economy was doing when the Bush tax cuts fully took effect circa 2008-2010.

Lmao the tax cuts weren't why economic crash happened, it was the repeal of glass stegall and keeping interest rates artificially low throught the 2000s.


Also the deficits under Bush were mainly for these two things : Iraq War , and more than doubling military spending in the 2000s(https://www.statista.com/statistics/272473/us-military-spending-from-2000-to-2012/).


The budget deficit in 2006 and 2007(years which the tax cuts had been fully implemented by ) were 248 billion and 161 billion and without the Iraq war and if you had a slight instead of a massive increase in military spending the budget would have been balenced .

Keep in mind that that the Budgets prior to the Dems taking back control of Congress in 2006 didn't include Iraq, since it was constantly being funded through emergency funding bills so as to lower the top line deficit.

That said you are right, the tax cuts were basically money pushing on a string because the banks locked up tight beginning in the summer of 2007 due to the credit crunch. Cheap easy money was not just coming from the Fed, but the asset valuations from the derivatives market as well and when the housing market crash occurred, those valuations began to crash and rather then being an asset that could be borrowed against, became an anchor on those same firms. This in turn led to the credit crunch in mid 2007, and nobody at the time appreciated what was coming unglued. 

The credit crunch then crippled both the back to school and Christmas shopping seasons in the Fall and Winter of 2007 and pushed the general economy into a recession beginning in December 2007.

Glass-Steagall alone didn't lead to this situation, but it was a part of it and the consolidation of firms into giant "too big to fail banks" is very dangerous. Because suddenly the collateral damage becomes the US economy, when the market acts to correct their mistakes.

[Southern Senator North Carolina Yankee]

I suppose you don't want to talk about how the economy was doing when the Bush tax cuts fully took effect circa 2008-2010.

This is at least the second time in the last couple weeks you have tried to connect the Bush tax cuts to the Financial Crisis. You clearly have no idea what you are talking about because those are totally unrelated to each other. Stop.

Both parties share blame for the recession. But the Bush tax cuts, which are mostly irrelevant to this, ballooned the deficit. It is fiscally irresponsible to expend hundreds of billions of dollars on new foreign wars and simultaneously cut taxes heavily on the other end. What, is there a magic money tree?

There was a bipartisan desire to stimulate the economy out of the 2001 recession. That is why a big chunk of the tax cut passed, despite Dems controlling the Senate. The rest of it was rammed in 2003 when the Republicans regained the Senate.

[Southern Senator North Carolina Yankee]

51-49

[Southern Senator North Carolina Yankee]

This wealthy wank is going to crash the economy.

It seems that's the only way Americans are going to be weaned from Trumpism -let them suffer from the effects of his policies.  If they're not going to listen to the mainstream media, they will listen to their pocketbooks, at least.

Thing is, this is unlikely to cause any short term pain. The ill effects will largely happen after Trump's term, when Democrats will suffer the consequences of passing the measures needed to deal with this mess.

Doesn't this all expire in ten years since it is being done with budget reconciliation?

[Southern Senator North Carolina Yankee]

This wealthy wank is going to crash the economy.

It seems that's the only way Americans are going to be weaned from Trumpism -let them suffer from the effects of his policies.  If they're not going to listen to the mainstream media, they will listen to their pocketbooks, at least.

Thing is, this is unlikely to cause any short term pain. The ill effects will largely happen after Trump's term, when Democrats will suffer the consequences of passing the measures needed to deal with this mess.

Doesn't this all expire in ten years since it is being done with budget reconciliation?

Unclear. What they're passing now is just a budget to let them use reconciliation, the actual tax reform bill comes later. The rule is 10 years only if it adds to the deficit, permanent if it doesn't. There's actually been some discussion of passing a bill with some permanent provisions and some temporary provisions. And as we saw with the bush tax cuts, when that 10 year deadline does come, there will be immense pressure on politicians to extend at least some of the cuts.

But eventually, the ones for the highest incomes were not extended.

Frankly I am beginning to coming around to wanting this to pass now for the sake of the corporate tax code reform and the simplification of the code. I think that will be of immense benefit to the economy. I am disturbed by the adding to the deficit obviously, in the mean time. But if this fails, I doubt it will ever get done.

[Southern Senator North Carolina Yankee]

This wealthy wank is going to crash the economy.

It seems that's the only way Americans are going to be weaned from Trumpism -let them suffer from the effects of his policies.  If they're not going to listen to the mainstream media, they will listen to their pocketbooks, at least.

Thing is, this is unlikely to cause any short term pain. The ill effects will largely happen after Trump's term, when Democrats will suffer the consequences of passing the measures needed to deal with this mess.

I'm not just referring to his tax cuts -Obamacare repeal by executive fiat would impact many of his white working class supporters. Let's face it, the bill by Sens. Murray and Alexander is not going to pass the House, and even by the slim chance it did, I wouldn't count on Trump signing it into law. 

I read an article that because of Trump's executive order, it will cause premiums for silver plans to rise, which will turn lead to the premium subsidy getting spiked, meaning more people could afford to get a Gold plan or drop down to Bronze plan with a higher % of the premium covered by the subsidy.

Of course this means that trump's EO actually raises the deficit.

[Southern Senator North Carolina Yankee]

This wealthy wank is going to crash the economy.

It seems that's the only way Americans are going to be weaned from Trumpism -let them suffer from the effects of his policies.  If they're not going to listen to the mainstream media, they will listen to their pocketbooks, at least.

Thing is, this is unlikely to cause any short term pain. The ill effects will largely happen after Trump's term, when Democrats will suffer the consequences of passing the measures needed to deal with this mess.

Doesn't this all expire in ten years since it is being done with budget reconciliation?

Unclear. What they're passing now is just a budget to let them use reconciliation, the actual tax reform bill comes later. The rule is 10 years only if it adds to the deficit, permanent if it doesn't. There's actually been some discussion of passing a bill with some permanent provisions and some temporary provisions. And as we saw with the bush tax cuts, when that 10 year deadline does come, there will be immense pressure on politicians to extend at least some of the cuts.

But eventually, the ones for the highest incomes were not extended.

Frankly I am beginning to coming around to wanting this to pass now for the sake of the corporate tax code reform and the simplification of the code. I think that will be of immense benefit to the economy. I am disturbed by the adding to the deficit obviously, in the mean time. But if this fails, I doubt it will ever get done.

You make some good points but it's very hard for me to support something that benefits the wealthy way more than the middle class and adds to the deficit. That being said I understand the framework and budget are not gospel and will postpone judgment until I see the final tax reform bill.

Well to all things there is a solution. If Republicans were far less in the mind of being sticks in the mud, I would add an increase of the minimum wage (say to $9.15) and a boost to the EITC significantly to ensure that there will be a substantial increase in take home pay for the lowest income brackets.

The massive tax cuts and simplification would help compensate small business for the increased labor expense and such a broad based boost to disposable incomes would benefit small business.

But of course Republicans in DC are stupid so it would never happen.

[Southern Senator North Carolina Yankee]

^ If you can somehow get Congress to pass that then go for it. You have my blessing.

In 2006, the Republicans passed a minimum wage increase tied to a permanent death tax repeal in the house, but it fell short of the 60 votes in the Senate.

The following year the Democrats passed $7.15 with other tax cuts attached to it. There has long been a model of tying minimum wage hikes to tax cut proposals.

It is something I could see a large number of Senators and even Trump going along with. With Cruz, Lee and Paul opposed in the Senate and the Freedom Caucus in the House.

[Southern Senator North Carolina Yankee]

1.5 million over the next 10 years is not that big of a cut and can easily be made up.


-Taxing overseas havens ,including a one time wealth tax on those havens

- Cutting 70 billion dollars in military spending

McCain is raising bloody murder about the budget resolution not including increases in defense spending.

The problem is that the Republican majorities are too small. Republicans are paying for the mistakes made in 2012 in IN, MO, ND and MT right now. With 56 Senators they would have far more flexibility and could tell the grand standers to take a hike.

[Southern Senator North Carolina Yankee]

1.5 million over the next 10 years is not that big of a cut and can easily be made up.


-Taxing overseas havens ,including a one time wealth tax on those havens

- Cutting 70 billion dollars in military spending

McCain is raising bloody murder about the budget resolution not including increases in defense spending.

The problem is that the Republican majorities are too small. Republicans are paying for the mistakes made in 2012 in IN, MO, ND and MT right now. With 56 Senators they would have far more flexibility and could tell the grand standers to take a hike.

Did they really have a better candidate to face Tester in 2012?

"Mistakes" is a broad term.  Lugar should have retired and Becky Skillman would have won that primary and the General election by 18%.  Berg and Rehberg should have run better candidates and anybody but Akin should have been the nominee in MO.

[Southern Senator North Carolina Yankee]

1.5 million over the next 10 years is not that big of a cut and can easily be made up.


-Taxing overseas havens ,including a one time wealth tax on those havens

- Cutting 70 billion dollars in military spending

McCain is raising bloody murder about the budget resolution not including increases in defense spending.

The problem is that the Republican majorities are too small. Republicans are paying for the mistakes made in 2012 in IN, MO, ND and MT right now. With 56 Senators they would have far more flexibility and could tell the grand standers to take a hike.

Did they really have a better candidate to face Tester in 2012?

"Mistakes" is a broad term.  Lugar should have retired and Becky Skillman would have won that primary and the General election by 18%.  Berg and Rehberg should have run better candidates and anybody but Akin should have been the nominee in MO.

Skillman was considering running for IN Governor in 2012 but opted out due to her medical condition. Given that I don't think she would have ran for Senate.

There were other potential candidates as well that would have come forward with an open seat.

[Southern Senator North Carolina Yankee]

This wealthy wank is going to crash the economy.

It seems that's the only way Americans are going to be weaned from Trumpism -let them suffer from the effects of his policies.  If they're not going to listen to the mainstream media, they will listen to their pocketbooks, at least.

Thing is, this is unlikely to cause any short term pain. The ill effects will largely happen after Trump's term, when Democrats will suffer the consequences of passing the measures needed to deal with this mess.

Doesn't this all expire in ten years since it is being done with budget reconciliation?

Unclear. What they're passing now is just a budget to let them use reconciliation, the actual tax reform bill comes later. The rule is 10 years only if it adds to the deficit, permanent if it doesn't. There's actually been some discussion of passing a bill with some permanent provisions and some temporary provisions. And as we saw with the bush tax cuts, when that 10 year deadline does come, there will be immense pressure on politicians to extend at least some of the cuts.

But eventually, the ones for the highest incomes were not extended.

Frankly I am beginning to coming around to wanting this to pass now for the sake of the corporate tax code reform and the simplification of the code. I think that will be of immense benefit to the economy. I am disturbed by the adding to the deficit obviously, in the mean time. But if this fails, I doubt it will ever get done.

You make some good points but it's very hard for me to support something that benefits the wealthy way more than the middle class and adds to the deficit. That being said I understand the framework and budget are not gospel and will postpone judgment until I see the final tax reform bill.

Well to all things there is a solution. If Republicans were far less in the mind of being sticks in the mud, I would add an increase of the minimum wage (say to $9.15) and a boost to the EITC significantly to ensure that there will be a substantial increase in take home pay for the lowest income brackets.

The massive tax cuts and simplification would help compensate small business for the increased labor expense and such a broad based boost to disposable incomes would benefit small business.

But of course Republicans in DC are stupid so it would never happen.

https://www.rollcall.com/news/politics/graham-pitches-minimum-wage-hike-part-tax-reform-effort

[Southern Senator North Carolina Yankee]

Yes but it emphasizes that as the Republican's evolve, so have the Democrats to being a party of upper class suburbs like Westchester, DuPage, Orange and Fairfax.

Yes the committee should do this, but it will pull them away from Sanders type Democrats and more towards Clinton style Democrats.

[Southern Senator North Carolina Yankee]

http://www.thefiscaltimes.com/2017/10/23/GOP-Eyes-Million-Dollar-Tax-Bracket

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Why does anyone give a crap what this Commie adoring fruitcake thinks anymore?


There is absolutely no benefit to cutting income tax rate for millionaires and it will just add to the deficit.

Cut the payroll tax, expand EITC, further expand the Child Tax Credit or the standard deduction, give more tax benefits to small business and raise the minimum wage in conjunction, or use it to put money in the highway trust fund, anything would be more useful than cutting top rates for millionaires and billionaires.

[Southern Senator North Carolina Yankee]

So the Dems are now defending a tax deduction that disproportionally favors the wealthy. Why would you do that when you could also vote for a tax cut that disproportionally favors the wealthy ?

It's actually not that incompatible. SALT is used more by middle- to upper-middle-income earners in these suburbs (and yes, the super rich, but the middle income earners outnumber the super rich in the beneficiaries group). This would likely still bring taxes up on people already highly taxed in those states while not closing any real loopholes and slashing income taxes across the board for every other bracket.

Anyway, why would a political committee not do this? Isn't the point of committees to win elections?

It was a joke, but you're right that it's politically smart to do this. And even though it's not as lopsided as some other charitable deductions it's still the wealthy who benefit the most from the SALT deduction if you look at after tax income. But you're right that there are a lot of upper middle-class people who benefit from the SALT deduction.

Anyway, I'd rather see them eliminate the mortgage interest deduction since the mortgage interest deduction really doesn't have any rationale (while the SALT deduction atleast prevents double taxation).

Because of the standard deduction change, the number of homes that would qualify, that wouldn't also qualify and do better under the expanded Standard deduction, drops by 78% according to one article I saw. So the number of people using the Mortgage Interest deduction will decline substantially anyway.

[Southern Senator North Carolina Yankee]

If there is to be an economic downturn (or even another crisis) sometime within the next few years, I'd rather it happen with these tax cuts already in place.  It would be all the more easier to discredit supply-side economics that way. 

The 2008 collapse was supposed to do that, and then Republicans came back with a vengeance a year later anyway.

The 2008 collapse was the product of regulatory changes passed in the 1990's, not the Bush tax cuts.

[Southern Senator North Carolina Yankee]

If there is to be an economic downturn (or even another crisis) sometime within the next few years, I'd rather it happen with these tax cuts already in place.  It would be all the more easier to discredit supply-side economics that way.  

The 2008 collapse was supposed to do that, and then Republicans came back with a vengeance a year later anyway.

The 2008 collapse was the product of regulatory changes passed in the 1990's, not the Bush tax cuts.

That doesn't matter. Perception is reality. The public blamed Bush and the Republicans in the 2008 polls. They forgot a year later and saw the Republicans as their new saviors.

Isn't that the point? He said the 2008 recession was suppose to do that, and you said "perception is reality and for once brief moment the public blamed people based on this "perceived narrative" but quickly forgot.

Perhaps that says something about the narrative and the presence of alternative mediums. Both Parties were responsible for the laws that set the stage for the Recession, but the Democrats hoped and planned for the Republicans getting destroyed by it and them being able to cash in on it to create decades of political dominance. That didn't happen obviously and largely because the narrative itself doesn't stand up and the diversification of medium means you had Republicans thinking Obama and Clinton were at fault, while Dems blamed Bush.

It also didn't help that Bush and McCain were very ineffective at controlling the narrative and it is no accident that the next Republican President is someone who counter punches too much. Everyone Republican back in 2005 onward was frustrated beyond belief that Bush wouldn't defend himself and beat back false narratives.

[Southern Senator North Carolina Yankee]

While I have concerns about some of the details, I must say they did exceed my expectations in many areas.


There are some improvements I would like to see, including an expanded EITC and Graham's minimum wage proposal. I would like to see some stronger barriers to the pass-through loophole and provisions to get Hedge Funds up to at least the 20% corporate rate.

It is clear to me that they really focused on two priorities.

Getting the Corporate rate way down to bring us well into a competitive range and put an end to the corporate inversions. They also went towards a territorial system and even if imperfect, the reforms on the corporate tax side are worth it, even if the rates go up slightly to like say 25% under a future Dem President.

They also went to great lengths to focus the cut towards the middle class with the dropping of many people down to that 12% and the creation of a de-facto 0% rate that encompasses those who were at the previous 10% rate, via the Standard Deduction increase.

I didn't appreciate the Standard Deduction as a tool but it was a great way to help those across a wide swath of incomes.

From a pure political perspective, looking at the income tax rates and the deductions, Republicans are starting to realize they are not a Party of the rich anymore, at least not as broadly defined as it is used to be in that sense. It is big leap for them to accept not cutting the rate for millionaires and billionaires in that sense. I also find it hilarious that they face backlash from big states over SALT and decide to keep it just for property. And which two big states, do not have an income tax but high property taxes? Texas and Florida!

[Southern Senator North Carolina Yankee]

While we're at it, let's take another swipe at Obamacare:

Conservatives push to repeal Obamacare mandate in tax package

Of course, they cannot let a good thing happen without letting stupidity get in the way.

[Southern Senator North Carolina Yankee]

Upper middle class is 90k-250k

Ok. Well if that were the case then for sure I would agree that this tax plan does lower taxes for this group.  My point about wealth transfers were mostly for people in the 500K levels and above between metropole and non-metropole regions.

Of course if you ask people in my neighborhood they will define upper middle class at 750K but I get different regions have different views on this.

Wow! In Arkansas, the top 1% is something like $200,000+. If you make >$90,000, you're in the richest 5%. So yeah, this "hurts" rich states like New York and Oregon.


That said, I think the current tax rates are appropriate. I agree with Senator Lankford absolutely here: let's stop cutting at taxes and raising military spending until we can close that deficit. Even a 5% value-added tax should close it absolutely.

Whatever the current rates are, is meaningless. We need "reform" in many areas, especially in the corporate area, and to bring the corporate tax rate down to a competitive range

As for the tax code generally and the reason why I like parts of this bill is while yes we shouldn't be cutting our taxes to get to paradise, we should definitely try to eliminate as many deductions, exemptions and credits as possible. America spends $500 billion a year in "tax code compliance", which is in and of itself a regressive tax that shuts out the small firms and encourages big business, consolidation and even too big to fail (Which cost us Trillions of dollars over the past decade).

I have long said that most all of them should be eliminated with the EITC being kept and substantially increased/expanded. I would also add keeping and expanding the Standard Deduction along with that.

This is perhaps one of the few areas I agree with Libertarians on, that we should get away from trying to encourage behavior via the tax code. I would much rather rout money through the Social Services offices to help the poor, then through the damn IRS. Republicans historically have loved to use tax credits and such to do things like Healthcare because it gives them cover. "I am not subsidizing the poor, I am just giving people their hard earned dollars back". That political cover is leading to the further metastasizing of the IRS, which should be the one government agency all "conservatives" should be able to unify around downsizing and eliminating.

And yes that means rich New Yorkers won't be getting tax subsidized on their first, second and third million dollar homes. Which frankly I find completely galling when so many people cannot find housing or are priced out of owning their first home.

[Southern Senator North Carolina Yankee]

This is why the tax code remains a completely corrupt mess. Everyone wants to keep their special provisions and special breaks, and uses their influence, lobbyists and pressure groups to preserve them. Which means they all get together and everyone get's their breaks maintained, and the sum total is that tax code compliance cost I mentioned above. Special interests thus win out of over the general welfare.

Clearly the tax code is never going to be reformed, until these groups are de-clawed by getting money out of politics.

[Southern Senator North Carolina Yankee]

The vast majority of deductions are special interests at work, with a handful of exceptions. However, cutting the income tax rates is fiscally insane, and raising them is politically suicidal.  Cutting at deductions would be fine, though. That said, we really, really need to find a new way of raising money.

We really should be cutting the corporate rate though. But it is insane to not cut the taxes on small business at the same time and it is political suicide to cut business taxes and not poor people and the middle class.

So rates end up coming down for most of the individual brackets by necessity.

[Southern Senator North Carolina Yankee]

Upper middle class is 90k-250k

LMAO. Half of Americans make less than $30k per year; 71% less than $50k per year. To be in the literal Top 1%, all you need to do is earn $250k per year.

Your "upper middle class" figure basically applies to the top 10% of income earners minus the wealthiest 1%. There's nothing "middle" (and certainly not "median") about being in the top 10%.

And anybody who has a $500,000 house is f@%king rich, much less one million.

[Southern Senator North Carolina Yankee]

The vast majority of deductions are special interests at work, with a handful of exceptions. However, cutting the income tax rates is fiscally insane, and raising them is politically suicidal.  Cutting at deductions would be fine, though. That said, we really, really need to find a new way of raising money.

We really should be cutting the corporate rate though. But it is insane to not cut the taxes on small business at the same time and it is political suicide to cut business taxes and not poor people and the middle class.

So rates end up coming down for most of the individual brackets by necessity.

I'm not sure if this is simply a terminology difference, but there isn't a special "small business" rate, other than corporate rates progressively increasing based on an enterprise's income.

Any current business is plenty capable of paying $150 to incorporate in Delaware and availing itself of any lower corporate rate, whether the business has gross receipts of $100K or $100M.

The general political calculation seems reasonable and makes sense to me, but I'm just not sure where this idea that cutting the rate on partnerships = small business cut when that really just isn't the case. Any semi-savvy operator would just incorporate the business and take advantage of those rates.

Which is why I really think that the end result of this tax package exercise will be a moderate rate cut across the board (think down to 29% corporate rate, similar cuts for individuals) with a few revenue raisers to help neutralize any talking points about benefits accruing to the top 1%.

The post was about political optics. Of course they can incorporate to get that lower rate.

I would prefer a 25% corporate tax rate with far more aggressive approaches to things like the Carried interest deductions and hedge funds generally.

[Southern Senator North Carolina Yankee]

Upper middle class is 90k-250k

LMAO. Half of Americans make less than $30k per year; 71% less than $50k per year. To be in the literal Top 1%, all you need to do is earn $250k per year.

Your "upper middle class" figure basically applies to the top 10% of income earners minus the wealthiest 1%. There's nothing "middle" (and certainly not "median") about being in the top 10%.

And anybody who has a $500,000 house is f@%king rich, much less one million.

Inaccurate. Many homes in NoVA or even in southern VA cost this much for a small house. Also, I know folks who had like a 2 bedroom in SD and 500K would barely get you that out there. Home value, although somewhat indicative of overall income, is a wildly misleading indicator depending on the area of the country being discussed.

Just on the principle, a 500,000 home is about $1,500 a month on a 30 year mortgage. At the very least we are talking upper middle class. No one, who is lower middle class or working class can can afford that and anyone who does have one will more then likely lose it before they ever get close to paying it off.