Archive for the ‘Taxes’ Category
They can only be interesting in a way that’s bad for Trump: if he lied, cheated, did something illegal, etc.
Otherwise, it doesn’t matter what his tax rate was. No one is obligated to pay more taxes than they are legally required to pay, and no one does, not Democrats, not Republicans.
Andrew E. wrote in a comment: “Believe it or not, Americans like low taxes.”
Yes, I do believe it.
But, people aren’t thinking rationally about it, they are thinking with the animal parts of their brain. There’s a part that reviles at the thought of stuff being taken away from them, which is based on instincts from our caveman days when stuff was synonymous with having enough of a stockpile to survive the winter without starving to death. And there’s a part which craves status, and thinks that if only they had the money the government was taking away in taxes, they’d be able to buy the house in a “better” neighborhood or buy the stuff their friends have that they can’t afford; but what their emotions don’t realize is that if everyone gets the same tax cut, then the price of the “better” neighborhood goes up by that much and is still unaffordable, and they still can’t afford to buy the stuff their friends have because now their friends can buy more expensive stuff.
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American’s like low taxes for 1 reason and 1 reason only: America’s large black population.
That is literally the only reason. If it wasn’t for the knowledge that their tax money would just be going to blacks, American would have similar tax rates and a similar social safety next to Western European countries.
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One entity can pool large sums of money together to invest in major projects with more efficiency than a large number of people each using their own money can. This principal explains why any large organization exists. The trick, of course, is to find a way to staff the government with intelligent and moral people whose interests are aligned with the general population’s. This is difficult but not impossible, though it’s rarely been accomplished.
Certain commenters keep on insisting that the Democrat party is secretly using taxes to protect the richest of the rich and make it harder to become rich by only taxing income and not wealth.
The actual tax plan from Hillary shows how stupid this is. In fact, it’s an excellent tax plan designed to remove the unfairness from the current tax code. Most notably:
Clinton would also impose a minimum tax of 30 percent of AGI on filers with AGI greater than $1 million(i.e., the Buffett Rule). Taxes counted toward the new minimum tax requirement include: regular income taxes(after certain credits and including the Affordable Care Act surtax on net investment income), the alternative minimum tax (AMT), the 4 percent surcharge on AGI, and the employee portion of the payroll tax.4Taxpayers with AGI over $2 million would owe an additional tax on the difference between30 percent of AGI and the sum of those taxes. The tax payment phases in ratably between $1 and $2 million of AGI.
Because AGI includes capital gains and other investment income, it will ensure that the richest of the rich pay their fair share on investment income as well as so-called ordinary income.’
Clinton proposesto tax “carried interest” as ordinary income. Under current law, general partnersof an investment firm (e.g.,private equity) who receive a portion of their compensation as a share of the firm’s profits may report that portion as a long-term capital gain;thus they benefit from a lower income tax rate (23.8 percent)and avoid paying payroll taxes. Clintonwould tax carried interest income as ordinaryincome (top tax rate of 43.4 percent) and require the partner to pay self-employment taxes on the income.
Closes a major loophole there.
n tax year 2015, the basic exclusion for the estate tax is $5,450,000 (twice that for couples)and the top tax rate is 40 percent. Clinton proposes lowering the exclusion to $3.5 million for individuals and $7 million for married couples, with no adjustmentsf or inflation going forward, and raising the top rate to 45 percent. These changes would return the estate tax permanently to its 2009 parameters. Also, Clinton would establish an unindexed lifetime gift tax exemption of $1 million. The unindexed exemption levels will decline in real value over time meaning that more estates and gifts will become subject to tax. Clinton also proposes to require consistency between valuations for transfer (estate and gift) tax and income tax purposes, and to reform the rules that apply to grantor trusts.
Higher estate taxes, another tax aimed at wealth and not income.
The big political irony of our times is that the rich people most heavily affected by Hillary’s proposed tax increases will be heavily voting for her, which means they don’t consider higher taxes that big of a deal, at least not such a big deal that they would vote for a candidate that supports pro-life, guns, “denies” climate change, and is as low-class as Trump.
On the other hand, the middle-class and working-class white voters have been duped by Republican bigwigs, for so many decades they now take it as a core faith, that higher taxes on rich people somehow hurts them.
If only we could combine Hillary’s tax plan and Trump’s immigration plan and ability to say “radical Islamic terrorism” into a single candidate with the demeanor of Mitt Romney.
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Really, it’s a very good tax plan. I believe that the only rate increase is 5% increase in the estate tax and 4% increase on incomes GREATER than $5 million (a segment of the population likely 80 to 90% voting for Clinton over Trump).
All other revenue raised from the tax plan comes from closing what might be called loopholes, various ways that individuals and corporations avoid paying the existing top rate.
The impact of the tax plan will be almost entirely born by the top 1%, who are voting for Clinton anyway and deserve the tax plan they voted for, even if Trump wins.
When I first started posting that the rich supported Democrats and supported Obama in 2008, I got a lot of hostile and disbelieving comments.
But let’s move ahead eight years. Does anyone now doubt that Hillary Clinton is going to win the rich vote? She will certainly win the top 1% rich by a really huge margin, and probably the top 5% rich by a smaller margin.
The shift of the rich from the Republicans to the Democrats has been going on for decades. It accelerated in the 2012 election, and because of Trump will massively accelerate in this upcoming election.
But we still have the weirdness of Trump’s tax plan (the one on his website) supporting tax cuts for the rich, while Hillary presumably inherits Obama’s desire to raise taxes on those making more than $200,000/year.
Donald Trump told Chuck Todd of NBC News:
Let me explain how the world works, okay? I think nobody knows more about taxes than I do, and income than I do. But I’ll explain how it all works. I come up with the biggest tax cut by far of any candidate. Anybody. And I put it in. But that doesn’t mean that’s what we’re going to get. We have to negotiate.
The thing I’m going to do is make sure the middle class gets good tax breaks. Because they have been absolutely shunned. The other thing, I’m going to fight very hard for business. For the wealthy, I think, frankly, it’s going to go up. And you know what, it really should go up. Because the wealthy–
So it turns out that Trump’s massive tax cuts for the wealthy was actually just a debating point when he was trying to win the nomination of the Republican Party (although it was never really clear that he actually read the stuff on his own website), and now that he has won the nomination he is pivoting towards a more common sense and less stupid tax plan.
This makes me happy that I voted for Trump.
Cleaning up my apartment, I discovered an unopened envelope with a tax form, a sale of about $500 dollars of stock which was the stock grant from the company I used to work for. There was a tiny profit. I just finished filling out amended returns for federal and New York State so I could pay an extra $12 and $4 respectively. What a waste of time.
Zuckerberg promised that during his lifetime he will give away all of his $45 billion worth of FaceBook stock to a charitable trust.
This means that
(1) No tax will be paid on the $45 billion.
(2) The massive amount of money will be used to fund left-wing causes.
(3) The libertarian assertion that low taxes on the rich are necessary to entice people like Mark Zuckerberg to create value is proved once again to be false. Zuckerberg doesn’t even want the money. He’s giving it all away.
There are many saints of economic libertarianism. For this post I profile one of them: Arther Laffer.
Laffer (still alive today) was a relatively unimportant economists, though prominent enough to be at a meeting in 1974 with Donald Rumsfeld and Dick Cheney, at which a divine miracle happened in the form of him drawing a squiggly line on a napkin which became known as the Laffer Curve which proved, once and for all, that high taxes are really really bad.
Now, to give a certain amount of fairness to Laffer’s point of view, the top marginal income tax rate in 1974 was 73%, but at the same time there was only a 35% capital gains rate, plus there were a lot of loopholes which allowed taxpayers to present their income as capital gains, and even bigger loopholes which allowed taxpayers not to show any income at all (pass-through of partnership losses because of accelerated depreciation played a big part in those loopholes). The corporate income tax rate was also lower than the personal income tax rate, which encouraged wealth to be kept in corporations rather than paid out as dividends. They say that there’s no avoiding death or taxes, but in fact the 73% tax rate in 1974 was avoidable, which meant that tax collections were a lot lower than 73% of true income, and also that a lot of business activity went into tax avoidance rather than productive growth of companies.
I could state a general rule of tax avoidance behavior, which is that if different types of income have different rates, then over time an increasing percentage of declared income will be of the types that have the lower rates. I applaud the efforts during the Regan administration to reform the tax code by closing loopholes, which did in fact result in higher tax collections despite lowering the top rates.
I have stated before my belief in the importance of closing tax loopholes and eliminating tax deductions. If there’s a need increase tax revenue, we should always attack loopholes and deductions before raising rates. However, for each loophole or deduction there’s a strong lobby behind it. This is because, unlike libertarianists, real-world rich people see wealth as a zero-sum game: so as long as everyone’s tax rates increase, their status in the economic pecking order remains unchanged, so they aren’t actually harmed by higher tax rates, they are only harmed if a deduction or loophole which benefits them in particular is eliminated.
Libertarianists, have come to worship the Laffer Curve as proof that all taxes are evil and their worldview is correct, much like Christians see the Shroud of Turin as proof that Jesus really existed. From the libertarianist comments on my blog, I see that they think that current tax rates like the 39% top income tax rate or any amount of estate taxes are causing rich people to retire and stop working entirely, much like the rich people of Atlas Shrugged.
Why is it even a problem if rich people want to retire? It’s only a problem if you take the Atlas Shrugged point of view that rich people are needed to make the economy function and if they stop doing work, there aren’t any people with modest incomes who could step in and take their place.
However, the libertarianist point of view doesn’t make any sense if you assume that rich people behave rationally and want to be richer than their peers. Who would pass up the opportunity to make a billion dollars on account of the fact that 50% of it, or even 70%, of it was taxed? Isn’t it better to have $300 million than to have nothing? I would say it’s a hell of a lot better. I hear about all of the amazing businesses that have not been formed because the tax rates are too high, and it’s all nonsense. No one who starts a business is thinking about what happens to their estate after they die. Libertarianists, despite thinking of themselves as rational economists, are clueless about why people start businesses. And even if they did think about estate taxes, if they were even the slightest bit rational they would realize that it’s much better for their children if they die rich than if they die middle-class or die poor, and that would still be true if estate taxes were increased significantly over their current levels.
Jeb Bush has been saying that his tax plan is better than Trump’s plan because it doesn’t add as much to the budget deficit.
Trump basically steals Jeb’s tax-cuts-for-the-rich tax plan, puts it on steroids by increasing the amount of the tax cuts, and now Jeb has to say that Trump is cutting too much tax while Jeb himself is cutting just the right amount of tax.
I think that Bernie Sanders has the best tax plan of any candidate. Too bad we can’t join Bernie Sanders’ tax plan to Donald Trump’s immigration plan.
The New York Times “Upshot” points out that even hedge fund managers will pay less tax under the Trump plan. They currently are paying a 23.4% capital gains rate. Trump would eliminate the loophole that allows them to classify their income as capital gains, but he’s lowering the top rate from 39% to 25%, so there’s only a small increase on their income previously classified as capital gains, but a big decrease in the portion of their income previously classified as ordinary income.
The Times column also points out that there’s no way that eliminating deductions and loopholes could possibly make up for the huge lowering of tax rates in the Trump plan. Did Trump actually hire any tax law experts? The New York Times was quickly able to tear his plan apart.
This is so disappointing, Trump is just is another Republican bozo with a stupid tax plan.