Finally we're getting somewhere with tax reform

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SlugSlinger

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Lets kill a couple birds with one stone!

#BUSINESS NEWS
NOVEMBER 14, 2017 / 2:03 PM / UPDATED AN HOUR AGO
U.S. tax bill should include repeal of health insurance mandate: Senate Republican leader
Reuters Staff

WASHINGTON (Reuters) - Senate Republican leader Mitch McConnell on Tuesday threw his support behind including a repeal of the Obamacare mandate for individual health insurance in the Senate’s tax reform bill.

“We’re optimistic that inserting the individual mandate repeal would be helpful and that’s obviously the view of the Senate Finance Committee Republicans as well,” McConnell told reporters.
 

deerwhacker444

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Prediction..?

1200px-Hindenburg_at_lakehurst.jpg
 

Dumpstick

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believe me, McConnell has no interest in repealing O-care. I f he did, it would have been done long ago.
He's including this to get R support, enough to not look like the ineffectual "leader" he is. He's been undercut by his own party so often, I believe he is facing a coup if he cannot get something through.

He's grasping at straws, trying to keep his position.

But, I agree with the Hindenburg allusion. The first thing jettisoned from that tax package, when it faces problems, will be the O-care repeal.
 

Apogee

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The first thing jettisoned from that tax package, when it faces problems, will be the O-care repeal.

Good rule of negotiation is to be sure to include a bunch of crap you are willing to give up in the first salvo. And Lord knows, McConnell never misses a chance to lay down his sword, often before the battle begins.
 

tRidiot

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I'd love to see some real tax reform that makes a real difference, but the bottom line is, anything we do has to be pretty "neutral" in terms of revenue generation - our spending addicts in Washington (as well as every state government) cannot grasp the concept of letting people keep most of their own money.

Of course, I am one of those greedy bastards who apparently doesn't pay his "fair share," so I'll never see a significant reduction in my taxes.
 

rc508pir

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believe me, McConnell has no interest in repealing O-care. I f he did, it would have been done long ago.
He's including this to get R support, enough to not look like the ineffectual "leader" he is. He's been undercut by his own party so often, I believe he is facing a coup if he cannot get something through.

He's grasping at straws, trying to keep his position.

But, I agree with the Hindenburg allusion. The first thing jettisoned from that tax package, when it faces problems, will be the O-care repeal.
Repeal is already out........... SURPRISE!!!!
 

SlugSlinger

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Damn republicans.

Republican Sen. Ron Johnson Opposes GOP Senate Tax Package
Siobhan HughesUpdated Nov. 15, 2017 6:48 p.m. ET
BN-WD667_3hVs9_G_20171115115851.jpg

Sen. Ron Johnson became the first Senate Republican to say he opposes the current GOP tax plan. Photo: joshua roberts/Reuters

By
Siobhan Hughes
WASHINGTON—Sen. Ron Johnson (R., Wis.) said he opposes the Senate Republican tax package, becoming the first GOP voice of dissent that, if it gains momentum, could force significant changes or jeopardize the party’s goal to pass the bill before the end of the year.

“If they can pass it without me, let them,” Mr. Johnson said in an interview Wednesday, adding that the plan unfairly benefits corporations more than other types of businesses. “I’m not going to vote for this tax package.”

Any Republican opposition is significant because GOP leaders are counting on near universal support from within the party to pass a bill on party line votes. With 52 seats in the Senate, Republicans can lose no more than two votes unless they can somehow find a way to win votes from Democrats.

Other Senate Republicans have expressed concerns. Jeff Flake of Arizona, for example, has worried about deficits and Susan Collins of Maine has worried about Republican plans to repeal the insurance coverage mandate in the Affordable Care Act as part of a tax overhaul.

Until now, no Senate Republican has come out definitively against the GOP tax plan. The risk for GOP leaders is that other Republicans get behind Mr. Johnson’s opposition, and either stop the bill or slow its passage, depriving Republicans of the chance to boost after-tax income household income next year, during the elections.

Still, in a statement issued in the late afternoon, Mr. Johnson said he hoped that Republicans could address the disparity so he could support the final version of the tax bill. Such changes could be expensive and might force tax writers to make other changes.

In addition to his concern about the details of the Republican proposal, he also complained about a process that he said has been closed to his input and also misleads the public about the nature of the tax overhaul.

“I don’t like that process,” Mr. Johnson said. “I find it pretty offensive, personally.”

Mr. Johnson said Republican plans prioritize corporations over “pass-through” entities—sole proprietorships, partnerships, limited liability companies and S Corporations—whose owners pay taxes through individual returns and at individual income-tax rates, rather than corporate rates. The Senate plan, like the House plan, proposes to cut the corporate rate from 35% to 20%.

Top rates for pass-through filers would remain over 30% in the Senate version of the bill and the House bill substantially constrains how much pass-through income could be taxed at a new 25% rate.

The Senate bill would provide $1.3 trillion in gross tax rate cuts to corporations, according to the Joint Committee on Taxation. That compares with $362 billion in gross tax cuts for pass-through entities. Both types of businesses also would lose some tax breaks.

More companies are organized as pass-through businesses than as corporations. Many pass-through filers are small businesses. Overall U.S. business income is split roughly evenly between the pass-through businesses and corporate income.

“I have no problems in making all American businesses competitive globally,” Mr. Johnson said. “This isn’t anti-big corporation at all. When you’re going to do a tax reform, you have to treat them equitably so they can maintain their competitive position here at home as we’re making them competitive globally.”

Finding the right rate for pass-through businesses is a challenge in part because they file their tax returns as individual filers. Cutting the rates for the wealthiest pass-through filers could be tagged as a giveaway to the rich. More than half of pass-through business income goes to the top 1% of households, according to the Tax Policy Center.

Mr. Johnson said many small-business owners he speaks with think they will receive a new top tax rate of 25%. That was the goal laid out months ago by Republican leaders and it is in the House bill, but narrowly constrained to a small portion of pass-through income.

“That is still buffaloing people, pass-throughs that think they’re getting a 25% rate,” Mr. Johnson said. “It’s still lost on a lot of people.”

Mr. Johnson expressed his frustration at a sensitive time, when House Republican leaders are on the verge of passing their tax bill but need to tamp down concerns that the Senate will fail to act and leave House Republicans having cast a difficult vote. By voicing his concerns one day before Thursday’s House vote, Mr. Johnson raises the profile of his issue but also feeds into worry among House Republicans about the reliability of their Senate partners.

Mr. Johnson said he has been working at this issue for months and trying to get a hearing for his ideas, only to be rebuffed at every turn by his party leaders. He said he has repeatedly sought a hearing from leaders of the Senate Finance Committee and the House Ways and Means Committee and spoken to high-level officials in the Trump administration.

“In terms of the committees, it’s just like, not invented here. That’s my assumption—‘Hey little man, we’ve got this covered,’” Mr. Johnson said. He said that he has had a favorable response from White House officials, but that the Trump administration is rebuffing him by telling him it is too late to change course.

“Back when it wasn’t too late it was just too big a bite and we can’t really chew it,” Mr. Johnson said. “Now it’s just too late,” he said, making his frustration clear. “It’s not like I’m just coming out of the woodwork all of a sudden raising it. I’ve been talking to my colleagues a long time. I presented my idea months ago.”

Pass-through profits are taxed once, at their owner’s personal rate of up to 39.6% under current law. Corporation profits are taxed twice—once at the corporate rate (20% under the current proposals), and a second time when they pay dividends on which shareholders then pay taxes. Some corporate profits aren’t taxed twice if owned by foreigners or tax-exempt entities.

Corporations may buy back stock or reinvest in the company instead of paying dividends, but then shareholders would eventually pay tax on resulting capital gains.

Dividends and capital gains are taxed at a lower rate than other income largely to offset this problem of double taxation, but the system nonetheless discourages corporations from distributing cash.

Pass-throughs have long demanded that if the corporate rate is lowered, theirs should be, too, despite the fact this would perpetuate the double taxation disadvantage corporations say they face.

To eliminate their double taxation, Mr. Johnson has proposed treating corporations like pass-through businesses. They would pay no corporate tax and their profits would be taxed in the hands of their shareholders at individual rates, just as pass-through income is today. Senate Finance Chairman Orrin Hatch (R., Utah) has discussed similar ideas but hasn’t gained traction among other Republicans.

Mr. Johnson said that proposal is no longer his focus. “I’ve given up hope on” advancing it for now. He wasn’t specific on what changes he’d like to see in the Senate bill, though he cited the lack of action on the preferential treatment of “carried interest” of hedge funds and similar investment vehicles.

To make the process more efficient, corporations would withhold 25% of their profits as tax their shareholders owe, just as they withhold tax their employees owe, and send it to the Treasury. Shareholders would be responsible for paying any additional tax they owe. Mr. Johnson would also eliminate various corporate tax breaks and the ability of corporations to defer tax on foreign profits.

Equalizing treatment for the two types of entities would have implications for how much revenue the government raises. Mr. Johnson said he can’t fully explore the effects because the nonpartisan staff on the Joint Committee on Taxation won’t evaluate his plan. JCT prioritizes requests from the tax-writing committees, especially the chairmen.

That has left Mr. Johnson feeling boxed in, since without an analysis, he won’t be able to get a vote on his idea, which he wants to offer as an amendment when the tax bill hits the Senate floor after Thanksgiving. Mr. Johnson said that some Democratic senators support his idea, and he thinks it could be the center of a bipartisan package. He wouldn’t disclose which Democrats support his approach, or which Republicans might.

Democrats declined to comment on Mr. Johnson’s remarks, but said that other Republican senators have privately echoed his concerns that the tax legislation is moving too quickly.

“We need to slow down,” said Sen. Maria Cantwell (D., Wash.). “I’m being asked by my constituents, ‘What is this?’ and ‘Am I going to be paying $5,000 more?’ and it changes every five minutes practically.”

Mr. Johnson believes his approach would do more to encourage factories to bring jobs back to the U.S. The Republican plan would switch to a territorial system, in which companies are taxed where their income is earned, from a world-wide system, in which taxes on global profits are owed in the U.S. and companies can avoid the U.S. share of those taxes by stockpiling profits overseas.

“With a territorial system, there will be a real incentive to keep manufacturing overseas,” Mr. Johnson said.

Republicans have focused on the corporate tax rate because they are trying to match what other major countries have done. They say they are trying to get rough parity between corporations and pass-throughs and the House and Senate have different approaches on how to do that.

In the latest version of the Senate bill, the rate cuts for corporations are permanent. The tax cuts for pass-throughs aren’t.

Mr. Johnson understands that Republicans could treat him harshly if he stops their tax bill from passing in December.

“I realize what’s about to happen to me, OK?” he said. “I’m giving them fair warning to do a good tax bill. I’ve been giving them fair warning for months.”
 

Hobbes

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I can see why he opposes the Senate plan!

The corporate tax cuts are permanent, the individual tax cuts expire in 8 years.

On top of that, they change the way inflation is calculated using what's called chained CPI that underestimates annual inflation.
Since the tax brackets are adjusted upward annually for inflation the result would be that individual tax bracket levels would rise more slowly.
As an individual earns more income over the years they would overtake the next higher bracket more quickley.
And then after 8 years whatever tax cut they received in the first place would expire.
But not the chained CPI calculation.
That stays, lol.

It cuts business taxes and raises individual taxes to cover most of the revenue loss.


No mention of the flat tax.
No mention of the FAIR tax.
Those ideas only pop up during election years when they need a simple campaign slogan to hypnotize the masses. :blahblah:
 

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