CBO analysis of new tax bill, $100k+ earner gets big cuts, poorer earner will tax more after bill

[hal2kilo]

Yeah...only 40% which is currently 4th highest among OECD countries.

I don't care if their founding fathers don't care about creating an endless aristocracy. Remember we the people. There's way more poor people in this country than the rich and we all have a vote. Don't forget that.

 

[Jhhnn]

States don't pay a dime to the federal government. You're conflating people with States. Federal income taxes are not paid by States....they're paid by businesses and individuals who happen to live in States.

More of the deliberately obtuse hair splitting, huh? When I say "state contributions to the federal kitty" I mean the total contributed by taxpayers in that state.

 

[Jhhnn]

Nevertheless, the statistical voting preferences of the two groups (boomers and millennials) are very different. If millennials voted in similar or larger numbers compared to boomers, we wouldn't be having this conversation.

I wish they would.

 

[mect]

I don't know why everyone is expending so much energy over deducting state taxes from federal. That is the smallest issue with this tax plan in my opinion. Its like worrying about a little paper cut while your femoral artery is sliced open.

 

[JSt0rm]

I don't know why everyone is expending so much energy over deducting state taxes from federal. That is the smallest issue with this tax plan in my opinion. Its like worrying about a little paper cut while your femoral artery is sliced open.

Um no. I will be paying an additional 2%ish of my total income on my federal taxes. You think thats small?

 

[Paratus]

Eski:

Kind of offtopic....

DJIA is skyrocketing as the wealthy go all in. How high do you think the market will get before it crashes? 35k? $40K

I'm nervous watching the markets. Valuations are already historically high. Pumping an immense wad of cash into companies that will be quickly spent on buybacks and dividends seems like a really bad idea. The difference between going out for a few drinks or an all night bender. The hangover is inevitable, the only question is the severity and timing.

I’m concerned too. The %15+/year return has been nice but it’s going to hit the fan at some point, right?

So what happens to investments short and long term when businesses repatriate $100s of billions of dollars?

 

[repoman0]

I wish they would.

Part of it is sheer numbers, as the article points out -- there will be more millennials than boomers eligible to vote very soon, and the only people I know who still like Dump are boomers. On top of that, I think you'll see a huge uptick in turnout come 2018 and 2020. There are many, many younger people I know who never gave a shit about politics, voting, news etc. and are quickly realizing that there are consequences to not paying attention.

 

[mect]

Um no. I will be paying an additional 2%ish of my total income on my federal taxes. You think thats small?

Compared to a college student that just went from paying taxes on 20k to now paying taxes on 100k, yes, I'd say your problem is pretty small.

 

[fskimospy]

Eski:

Kind of offtopic....

DJIA is skyrocketing as the wealthy go all in. How high do you think the market will get before it crashes? 35k? $40K

I have no idea. If I did I'd be getting rich off it myself and not telling you, haha.

I can say that I have several friends who are traders and one who owns a company that builds ultra low latency interconnects for big banks and they have pulled their own money from the market because in my friend's words 'it's a fraud'. Now before you freak out I've always found finance people to be bizarrely conspiratorial and convinced there's always some financial apocalypse around the corner so who knows what to think. It's hard to see what's changed over the last year where companies would be ~15% more valuable now than they were then but again if I knew then I'd be a billionaire.

 

[mect]

Um no. I will be paying an additional 2%ish of my total income on my federal taxes. You think thats small?

Basically, I assume with a 2% increase in taxes, you're still going to be able to afford food, housing transportation, insurance and medical care, etc. People that pay enough in state taxes to make a sizeable impact on their federal taxes by not being able to deduct them are not about to suddenly be pushed into poverty. There are other people affected by the proposed tax plans that will no longer be able to afford basic necessities or that will have programs that help them with basic necessities eliminated because of the decreased tax revenue.

 

[Jhhnn]

Yeah...only 40% which is currently 4th highest among OECD countries.

Yeh, that's the rate that only rich morons pay-

Among the few estates nationwide that owe any estate tax in 2017, the effective tax rate — that is, the share of the estate’s value paid in taxes — is less than 17 percent, on average, according to the Tax Policy Center (TPC)

https://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax

 

[s0me0nesmind1]

There is no doubt that we are due for a stock market correction. But like always, it will bounce back and recover to where it was in no-time thereafter. Index funds, hold and retain till retirement, etc...

 

[K1052]

I’m concerned too. The %15+/year return has been nice but it’s going to hit the fan at some point, right?

So what happens to investments short and long term when businesses repatriate $100s of billions of dollars?

Rationally yes, one would think we'd have to see a pull back at some point. Short term would be great if you own a bunch of equities. Higher share price and dividends galore. After that though...

 

[ivwshane]

Correlation does not equal causation but I wanted to post these charts for posterity.

 

[Jhhnn]

Basically, I assume with a 2% increase in taxes, you're still going to be able to afford food, housing transportation, insurance and medical care, etc. People that pay enough in state taxes to make a sizeable impact on their federal taxes by not being able to deduct them are not about to suddenly be pushed into poverty. There are other people affected by the proposed tax plans that will no longer be able to afford basic necessities or that will have programs that help them with basic necessities eliminated because of the decreased tax revenue.

It's shameful that anybody's taxes should go up so that taxes on the richest can go down. Nobody's lifestyle gets any better because the wealthiest are already at saturation. It just makes them more powerful.

 

[fskimospy]

There is no doubt that we are due for a stock market correction. But like always, it will bounce back and recover to where it was in no-time thereafter. Index funds, hold and retain till retirement, etc...

This is generally sound advice but it may not be sound advice for much longer. The percentage of money held in index funds is set to surpass the amount of money actively traded in the next 5 or so years. When most investments are passive money at what point does the market lose its ability to tell you what something is worth because nobody's trying to do that anymore? Once that happens the market decouples from any semblance of reality and who knows what happens then. I don't know what this point is, but it seems like a real concern going forward.

 

[hal2kilo]

There is no doubt that we are due for a stock market correction. But like always, it will bounce back and recover to where it was in no-time thereafter. Index funds, hold and retain till retirement, etc...

It's get quite dicey when you are only 1.5 years from retiring. Hmm should I just get 1.1% on a safe investment while I watch 15% possible earnings pass me by. Let's just say, my finger is ready to dump everything into money markets if the shit starts going south in a big way.

 

[mect]

It's shameful that anybody's taxes should go up so that taxes on the richest can go down. Nobody's lifestyle gets any better because the wealthiest are already at saturation. It just makes them more powerful.

I agree, I'm just saying to me there are far bigger issues with the tax proposals than the state income tax deduction. Such as the tax cuts for the insanely wealthy.

 

[MomentsofSanity]

I love McCain's announcement. "After careful consideration". There's no final bill text, no hearings, no scores, no treasury analysis. What the F did he consider?

 

[Thebobo]

It's get quite dicey when you are only 1.5 years from retiring. Hmm should I just get 1.1% on a safe investment while I watch 15% possible earnings pass me by. Let's just say, my finger is ready to dump everything into money markets if the shit starts going south in a big way.

Ditto. I'm in the same boat.

 

[Jhhnn]

I love McCain's announcement. "After careful consideration". There's no final bill text, no hearings, no scores, no treasury analysis. What the F did he consider?

His ideological commitment to trickle down economics. That's all of them & that's what this is really about. It works for their class & that's what they care about. Their ideal distribution of wealth & income is that of the third world.

 

[JSt0rm]

I agree, I'm just saying to me there are far bigger issues with the tax proposals than the state income tax deduction. Such as the tax cuts for the insanely wealthy.

The whole thing is idiotic. But raising taxes on the people who already pay in the most of any state is bullshit.

 

[Viper GTS]

At quick inspection this actually would cut my tax bill fairly dramatically. I'm conflicted because as a (perhaps moderately by AT standards) high income household with no kids and no mortgage I feel like I'm carrying far too much tax load relative to my peers who have both. But, in the past year I've become painfully aware of how incredibly little some people around me have to work with, and I have no desire to profit at their expense. If my really rough numbers I threw into a calculator are correct I would see more in monthly federal tax reduction than some people I know take home in W2 income per month. That doesn't really seem very right, particularly when I don't even have room for more cars.

Viper GTS

 

[Starbuck1975]

California being "geographically advantaged." ...I'll remember that the next time people start laughing at them for their water issues and fire season. Yes, California has a lot going for it when it comes to recreation and location from a shipping/transit perspective, but nothing is every going to be more important for an economy than something so biologically necessary as potable and agricultural water access.

We covered this in another thread. California has advantageous growing seasons but no water or resident labor. Who built the infrastructure that supports that agriculture?

 

[Starbuck1975]

We already went over this and this is not true. (also, why on earth would states get taxed more based on their location?? lol.)

If you believe California and New York are the beneficiaries of disproportionate federal investment compared to their total tax receipts over the years please provide it.

We already went over this and it absolutely is true.

The number you requested I am capable of aggregating but the proof is in the infrastructure to the extent that it basic common sense.

Geography absolutely plays into why and where the federal government chooses to build that infrastructure.

You are not going to build a Pacific Ocean trade port capability in Alabama.