13 thoughts on “Tax non-reform”

1. It sounds to me as though the support for it comes down to “Something must be done. This is something. Therefore, this must be done.”

   True but there is a lot of conflicting leaks and bickering so it is hard to understand what the tax bill changes or not. Basically Republicans are trying to hide a lot 2019 – 2017 tax increases with anybody who less than $250K. And they are trying to convince suburban America that they are cutting taxes when they pay more starting in 2023. So Republicans who are raising taxes on ‘Bobo Americans’ that voted slightly more for Trump than HRC (look it up) but are bleeding support for the last 5- 10 years. (Obama started taking these voters and Trump is losing them now. Look up any special election in 2017 to see this.)

   At this point, the main issue for America the tax bill overwhelming hurts the young people trying to settle into a career, marriage and kids which will continue to diminish the small c conservatives like Ross Douthat.

2. The major thing the tax bill does is lower the corporate tax rate a lot. That’s a pretty big deal, and earns the label of conservative tax reform too. Elimination of the State And Local Tax deductions are also big deals, and also conservative tax reform.

   But after that, there just isn’t that much room to play with individual income rates without blowing up the deficit and tempting the fiscal crisis fates even further. Several outlets have done impact estimates for people in different situations, and besides the SALT impact, the overall effect doesn’t seem to be very large.

   I think Rubin’s example is an extreme outlier of a set of rare particular circumstances that was unintended and unexpected and exactly what you pay a good tax law analyst to uncover. Tax law ain’t easy when one has to work within our system’s financial, legal, and political constraints.

3. I think Rubin missed the boat here. The original idea behind the pass-thru rate reduction was to provide a benefit to certain kinds of pass-thru businesses, like a family run convenience store or construction business.

   The pass-thru benefit was not originally intended to provide anyone that was a part of the white-collar, professional class. So doctors, lawyers, engineers, accountants, and financial professionals were kicked out.

   What they’ve done now is coughed up a little bit of benefit for “small” professional services businesses, but don’t want to give the benefit to the lawyers and doctors that are making seven figures a year.

   But the core, original idea remains the same: fundamentally, this was a shot in the class/culture warfare.

4. Along with what the others have said, recall too that this “tax reform” bill must comply with the tight budget restrictions imposed by the Byrd Rule’s “reconciliation” procedure.
   Note the 6 limiting items in this article:
   https://www.vox.com/policy-and-politics/2017/11/14/16634200/republican-tax-reform-byrd-rule
   Some commenters assert that giving the Republicans majorities in both Chambers and a President who will sign bills *should* mean that Pubs can get anything done. Not so. The Senate majority is so slim that compromise with McCain & Co. to get to 51 (which may add spending, thus requiring spending reduction and/or revenue increases elsewhere, per Byrd Rule) may eliminate from consideration tax reduction provisions that might otherwise be included.

5. Conservatives do NOT “control” the Senate, nor even the house. Reps are a majority.

   Yes to lowering corporate tax; yes to getting rid of the State & Local tax deduction.

   Yes to increasing the standard deduction, so even more people will take it for simpler tax prep (even more w/o state tax deduction).

   This won’t be ideal, but will be a big step, popular with most taxpayers & most companies.

6. I notice the lack of interest in what is being done by those on the right while the same were obsessed with figments of the last administration. That only leads to bad outcomes.

7. THIS is what the Republican “majority” has to deal with. So if the child credit is increased, something else will have to give elsewhere to meet the Byrd Rule limits on budget deficits. How do you get real tax reform, e.g., more efficient funding of the federal government with less burden on business & individuals, when your own purported “conservative” member holds tax “reform” hostage for more social spending?

   http://www.nationalreview.com/corner/454659/marco-rubio-confirms-he-will-not-support-gop-tax-bill-unless-it-expands-child-tax

8. Ah, the voters right to nit pick…And that is one’s voters, forget about the Progressive crowd. To paraphrase Chris Edwards — Cato Institute Tax Policy Expert: Corporate tax reform is the core of this effort. Cutting the corporate tax rate, changing the tax system to a territorial system, and fully expensing capital investment ALONE are three huge policy changes that almost every analyst had been pleading any Congress to do for decades — unsuccessfully. The personal income tax side of reform is a mish mash, but mostly because it is hard to make the system tax code more progressive (yes!) when you get no help from, well, Progressives.

9. I think it was Mark “hiking the Appalachian trail” Sanford who said this tax effort really is branded all wrong. It’s a corporate tax bill period. And the problem is people want it to do all kinds of other things.

   So McConnell has 52 votes. Just do the corporate tax stuff and leave the rest for some other time.

10. “Conservative tax reform means lowering marginal tax rates. This requires eliminating deductions and reducing top tax rates. ”

    Isn’t “reducing top tax rates” a big part of why the GOP are considered ossified zombies that deserved to lose to Trump? This isn’t the 1970s, top rates aren’t exactly the out of whack economic driver they used to be.

    “Conservative” tax policy would take a lot of the things in this bill but completely change the emphasis of where the money goes. Eliminating silly deductions to take more from urban blue state professionals makes sense. However, instead of giving it to Republican donors it should have been used to lower tax rates on middle class workers and families. Getting middle class people married is good for society and the best way to turn them into Republicans. The money should have gone there instead of donor catnip.

    What tax reform like this shows is the most cynical case I made when questioned about the various middle class deductions. That if it ever happened the money would not be returned to the middle class in the form of lower marginal tax rates, but stolen.

    Lastly, the fact that all of the good middle class stuff is either set to expire or not adjusted for inflation shows what a crock this whole thing is.

    • Phasing out popular deductions at high levels of income and wealth is, to a first order approximation, a middle class benefit at the expense of the rich. We don’t know what the final reconciled bill will look like, but probably the mortage interest deduction will decline from $1M to $750K.

      And currently, Rubio and Lee are trying to make the child credit refundable instead of a strict rebate, but the current rebate structure also gives the middle class a major positional boost over lower income households, and makes zero difference for wealthier households.

      At any rate, the latest evidence suggests that it would take huge amounts of surgically-targeted money to actually nudge average familiy formation decisions to a significant degree, and that’s about as likely as a universal basic income at this point: way down the line, if ever.

      • If you meet the qualifications, even now there’s an “additional child tax credit” that will pay you the surplus of the “regular” child tax credit over your tax owed, e.g., it’s a workaround that allows the credit to essentially be “refundable.”
        https://www.investopedia.com/terms/a/additional-child-tax-credit.asp

      • Since the original bill they’ve been adding more exceptions to when the deductions will phase out, but they don’t link any to inflation so its going to affect everyone eventually. Same with the increase in the standard deduction.

        Bottom line is all the real money is going to corp taxes/pass-through/estate tax. Why not 10k for each kid (I’m making that up, but insert whatever you could afford if you ditched the other tax breaks). Or a lower marginal tax rate for parents that targets the middle class. In the long run having people form families and have kids pays for itself and is all we have to show for existing.

        Bottom line is ~zero people voted for the GOP to lower corp taxes.

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