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Allowing someone to keep more of the money they acquire is not a subsidy.
Mircea, you, President Trump, and the Republican Party correctly chose to repeal the alternative minimum tax.
Why should the wealthy be expected to (at minimum) pay tax rates no less than those who are not wealthy?
As BugsyPal points out "the benefits will "trickle down" to the rest of us"; (i.e. they urinate upon us).
Mircea, you, President Trump, and the Republican Party correctly chose to repeal the alternative minimum tax.
Why should the wealthy be expected to (at minimum) pay tax rates no less than those who are not wealthy?
As BugsyPal points out "the benefits will "trickle down" to the rest of us"; (i.e. they urinate upon us).
I do agree that taxes always favor or disfavor groups, as taxes are rarely fair. But I have to disagree about the shifting burden.
If you get a federal income tax cut I don't necessarily pay more tax. The tax is income based.
Federal taxes remitted initially lower our national debt by that amount, before gov't decides to spend. Tax cuts in essence mean less reduction in our total national debt. And as total national debt is not to be paid off, I don't receive a higher tax bill as a result. Unless future tax laws are changed, making me pay more tax, or we start basing federal taxes somehow on national debt. National debt is not an individual taxpayers burden.
Hoonose, no; federal taxes remitted DO NOT initially lower our national debt by that amount before government decides to spend.
Debt is reduced when the portion of debt paid, exceeds the the additional debt incurred. Our annual federal budget's have generally been examples of deficit financing; (i.e. examples of our spending,(which includes debt service expenses), exceeding our revenues. You correctly state that our national debt is not your individual burden, but it is indirectly a burden upon all of us and our posterity.
I do agree that taxes always favor or disfavor groups, as taxes are rarely fair. But I have to disagree about the shifting burden.
If you get a federal income tax cut I don't necessarily pay more tax. The tax is income based. ...
Hoonose, not all incomes are subject to tax rates that are entirely based upon income amounts. There are special strokes for special folks. The deep rate discounts granted to long-term capital gains incomes is such an example.
Taxpayer's once had the option of averaging out their annual incomes over a 3-year duration to reduce the consequences of income taxes progressive rates. That option still exists for commercial farmers and fishermen. I don't believe that they're the only taxpayers experiencing erratic annual incomes, but rather their lobbyists apparently had the most politically persuasive leverage in this particular case.
“... There's no reason to believe that that the aggregate consequences of this tax policy are in our nation’s better interest. On the contrary, within this issue there doesn’t seem to be any compelling public interest that would justify replacing administers and entrepreneurs determinations with a tax regulation favoring only LTCG, [i.e. long term capital games] incomes.
Those who strive and reinvest into their enterprises certainly do not contribute less to our economy.
…
… The IRS tax option of income averaging was once available to all taxpayers that experienced ANY financial boon. ...
… Unlike the tax reduction for long term capital gains, income averaging equally treated lottery winners, speculators, investors and home sellers. Government did not determine winners and losers. … “.
Are the new Trump tax cuts really tax cuts, or are they tax subsidies?
The federal government is running a $700 billion deficit. The tax cut will result in an immediate loss of revenue on the order of $140 billion for 2018. That $140 billion must be financed by the selling of Treasury bonds. Interest on those bonds will be paid for by taxpayers for years to come.
In 2017 Bob paid $10,000 in federal taxes. In 2018, his taxes will fall to $8,000 due to the tax cut. Bob thinks, great, I get to keep more of my own money. But in reality he has received a $2,000 subsidy from the government in the form of publicly financed debt. This is exactly what the government is doing: they are using public debt financing to help subsidize people's tax bills.
The only time a tax cut allows you to "keep more of your own money" is when the government has a budget surplus. In that case the tax cut can be granted without the need for public debt financing and no subsidy is involved.
if we want to play that game, then why dont we appropriately label "debt" as a "tax" since government debt is a financial obligation being stuck to taxpayers.
Mircea, you, President Trump, and the Republican Party correctly chose to repeal the alternative minimum tax.
Why should the wealthy be expected to (at minimum) pay tax rates no less than those who are not wealthy?
As BugsyPal points out "the benefits will "trickle down" to the rest of us"; (i.e. they urinate upon us).
Quote:
Originally Posted by UNC4Me
The AMT is not being repealed.
UNC4Me, I sit corrected because I don't stand before my keyboard.
Respectfully, Supposn
if we want to play that game, then why dont we appropriately label "debt" as a "tax" since government debt is a financial obligation being stuck to taxpayers.
CaptainNJ, most conservatives believe that government debt is another form of taxation, particularly if taxpayers are not obtaining their moneys' worth.
The preponderance of Germans with any regard for their history would believe debt certainly is effectively (at very least) a tax, and too often it's government robbing their population.
A key fact that was ignored in 2001-03 as well. GDP equals the supply of money times its velocity. When a redistribution shifts funds from those who spend more quickly to those who spend more slowly, the results can become contractionary, not expansionary.
A couple of points.
1. What you've outlined, Money supply x Velocity = Nominal GDP, is a key theory within something called The Quantity Theory of Money and it's an important and useful theory - especially as a teaching tool.
QTM also has two disabling flaws in the real world leading to the theory being wrong.
QTM assumptions:
1. Velocity of money is constant (no modern economy can meet this criteria).
2. Money supply must be constant (this is never true anywhere with a functioning banking system).
2a. MxV presents a non-comparable factors violation unless M is fixed (period of time v. point in time).
3. Real output is always equal to full employment output (no real economy can meet this criteria ever).
4. These QTM constraints yield the requirement that there must be a directly proportional relationship between money supply and inflation. This does not happen in the real world for lots of reasons.
The takeaway is QTM as you defined it, which BTW has roots in the very late middle ages, is very useful as a teaching tool and has some limited real world applications in Monetarism. Hower, M x V = nominal GDP simply isn't accurate. Friedman, who wrote about this area of economics a lot, was a proponent of a much more elegant, read more complicated, version of QTM that has a lot of merit but accounts for changes in M, changes in V (which is super hard to measure anyway) and messages the real output constraint.
I'm tired if I messed any of this up I'll fix it tomorrow.
CaptainNJ, most conservatives believe that government debt is another form of taxation, particularly if taxpayers are not obtaining their moneys' worth.
The preponderance of Germans with any regard for their history would believe debt certainly is effectively (at very least) a tax, and too often it's government robbing their population.
Respectfully, Supposn
it is a tax but a lot of people dont perceive it that way and so government keeps adding to it without the appropriate outcry from the taxpayers.
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