Republican Tax Plan, in Brief

by Jack

What happens when you cut taxes and don’t cut spending?  If you said that our debt will increase, you are right.  So, the deficit goes up and knowing that answer apparently makes you smarter than almost every Republican in the Senate.  Why?  Because the latest plan the GOP has presented will add 1.7 billion dol…oops, nope, that’s wrong.  My bad.  It will add $1.7 Trillion dollars to the deficit over the next 10 years, so says the CBO.   That will put us in debt equal to 97% of our GDP.  This is like borrowing your way into prosperity.

For the last 8 years we’ve heard nothing but complaining coming from the GOP about the skyrocketing deficit and this is their plan?  NOT one these people should be re-elected if  this is the best they can do.  If this is passed, you know what paper money will be worth?

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20 Responses to Republican Tax Plan, in Brief

  1. RHT447 says:

    ” If this is passed, you know what paper money will be worth?”

    It will be worth less. Time will tell if it is two words, or just one.

  2. Tina says:

    RHT447 time will tell indeed.

    Jack as you know we won’t know exactly what the plan is until it hits president Trump’s desk for signature, such is the state of balanced power. There two issues here to talk about:

    1. The culprit in terms of the debt is not tax structure but the underfunded entitlement programs. During Obama’s eight years we took in record amounts of revenue and still managed to double the debt. Our debt will continue to increase until they address these unsustainable programs.

    2. The CBO continue to use static scoring which assumes that a lower tax rate will result in less revenue. They assume no new activity or growth. They will not account for expansion in the economy, higher employment, better wages. This must be political since we have experienced such growth and expansion every time taxes are cut.

    Obama’s way, Keynsian economics, results in greater government revenue, growth in the stick market for the wealthy, but a shrinking blunted middle class and growing numbers of needy. Let’s face it…that stinks!

    The President has asked for a tax structure that benefits the middle class. I don’t like some of what has been proposed but whatever we end up with will be better for all Americans in one important sense…greater opportunity and higher wages for main street middle and lower middle class Americans.

    If they find something is not working later they can pass legislation to correct. We need a tax cit and we need it now!

  3. Tina says:

    Politicians bend according to the will of the people and that includes special interests. I think the real problem in addressing the budget is the ignorance of the American people. Because we don’t know about finance and money management we lack the political will to demand the necessary changes that will bring down the debt.

    Changes to SS alone would go a long way toward bringing debt down while at the same time providing higher retirement benefits…but the people don’t understand the mechanics so they think only in terms of something being taken away. Democrats have campaigned for years to further the misunderstanding so they’re no help…nor are most educators who fall in the socialist left camp.

  4. J. Soden says:

    Speculation about a tax cut will remain speculation until Clowngress can actually PASS something! After the recent Obumblecare fiasco, it remains to be seen if they can get their acts together.
    Am desperately hoping for some strong NEW Repub candidates to challenge the RINOs in 2018. Doesn’t matter who the Demwits come up with – their message of racism, class warfare, tax and spend, and corruption will remain the same.

    • Tina says:

      J the political pollsters are doing their best to convince us that Democrats will gain big in the next election and that Trump is losing support. I don’t buy either of those things. They also want us to believe that has failed by nit passing major legislation this year, as if passing major legislation in the first year happened often. It doesn’t. For one thing they like having a positive issue to run on in the midterm elections. Pass legislation too soon and the public will have forgotten about it come election time.

      Pelosi is out there flapping her jaws about how the republicans are doing this tax legislation in secret. This from the woman who told us all they would have to pass her behind closed doors healthcare bill “so we could see what’s in it…” Also from a woman whose Senate party members (all but three) signed an agreement to vote no before a bill was written and refused invitations to be involved in the writing process. And this is the party voters will turn to if something doesn’t get done year one?

      Some will I guess but I think the likely vote scenario is the civic will that took Trump to the WH is growing stronger and more determined to get people elected who will work for a stronger middle class and a more prosperous standard of living for all.

      The StarBucks CEO was complaining…he didn’t need a lower corporate tax rate. But when asked what he would do with the extra money he said he would spend it on employees and charity.

      The CEO of an American steel company was thrilled about the new law allowing businesses to expense big equipment purchases in the same year instead of over many years. That allowed him to completely update his operation and make him more competitive…a very big thing. If he can compete he can hire and pay workers!

      There will be a tax plan. It won’t be perfect but it will make a difference.

  5. Jim says:

    You know darn well that $1.7 Trillion is a low ball estimate. It would probably turn out to be two or three times higher.

    The current tax plans will raise taxes for many middle class taxpayers. Doesn’t sound like a good deal to me.

    • Post Scripts says:

      Jim, the middle class does get a break, but in states like New York and California where we take a deduction for paying high state taxes we could lose money on this deal.

      • Tina says:

        There will be a threshold on this. We’ll just have to wait to see what shakes out. One proposal would cap the deduction for property taxes at $10,000 and preserve the mortgage interest deduction for existing mortgages and new purchases with loans of $500,000 or less.

        The guy in the Senate that’s working on getting the votes is Kevin Brady. He seems to be an honest person and he’s forthright in his answers. Here he is with Chris Wallace on FOX:

        WALLACE: Chairman, you’ve got more than two dozen Republican congressman from high tax states. Can you guarantee them — because they are threatening to vote against an elimination of all the state and local tax deductions, can you guarantee them that the final bill they vote on will not include the total elimination in the Senate plan?

        REP. KEVIN BRADY (R-TX), CHAIR, WAYS AND MEANS COMMITTEE: Yes — well, I can. And here’s why, because we want people to get more of what they aren’t regardless of where they live, including in these high tax states. That’s why we keep the home mortgage deduction, we keep the charitable deduction. We restore $10,000 of the property tax deduction, which is twice the national average, but we didn’t stop there for these states.

        So, the way we set the income brackets, we created this new family tax credit that is eligible for families up to $230,000 of income, and we restored the state and local property tax deduction.

        WALLACE: I understand that —

        BRADY: So, the combination of all of these gets the job done for these families.

        WALLACE: But, Chairman, how can you guarantee House members from blue states that the Senate plan, the total elimination will not be in the final bill?

        BRADY: Look, I’m convinced that this is where we will end up because this is — it’s important, again, as I told you, Chris, make sure people keep more of what they earn, even in these high tax states. And so, what we are working toward, and what we work so carefully with, our lawmakers from New York and California, New Jersey, is to make sure we deliver this relief, and I’m committed to it.

        WALLACE: So, are you saying then that the House will not accept a total elimination, that that just won’t fly even if the Senate passes it?

        BRADY: That’s what I’m saying.

        Trumps goal is to restore a vibrant middle class and that’s the aim of the Congress as well.

        I’m more worried they will delay the corporate tax cut.

        • Peggy says:

          This is all about crunching the numbers and completely doable. Raise this, lower that, extend this and shorten that so everyone gets some but not all they want.

  6. Tina says:

    Jim as I’ve written many times the debt will continue to go up until the Congress faces the fact that Medicare and SS are unsustainable and will add to the debt year after year unless they are reformed or eliminated.

    Oct 2017, National Review:

    during the fiscal year 2016, the deficit grew from $149 to $588 billion. This also ended a downward trend in the ratio of debt to GDP, which had been falling since 2009: It now stands at 3.2 percent, up from 2.5 percent last year. The culprits behind these numbers are pretty clear: Spending on Medicare, Social Security, Medicaid, and net interest paid on the debt are up significantly. Together, they total $2,152 billion and make up 56.6 percent of the budget.

    Wikipedia:

    During FY2016, the federal government spent $3.27 trillion on a budget or cash basis, up $18 billion or 1% vs. FY2015 spending of $3.25 trillion. Major categories of FY 2016 spending included:

    Healthcare such as Medicare and Medicaid ($1,060B or 28% of spending),
    Social Security ($910B or 24%),
    Non-defense discretionary spending used to run federal Departments and Agencies ($600B or 16%),
    Defense Department ($585B or 15%),
    Interest ($240B or 6%).

    Congress doesn’t have a revenue problem it has a spending problem exacerbated by laws built on pipe dreams instead of what’s actually possible. Heritage:

    The nation’s long-term spending trajectory remains on a fiscal collision course. Total spending has exploded by 25 percent since 2004, even after inflation, and some programs have grown far more than that. Defense spending, however, is being cut. Social Security, Medicare, and Medicaid are so large and growing that they are on track to overwhelm the federal budget. These major entitlement programs, together with interest on the debt, are driving 85 percent of the projected growth in government spending over the next decade. The Affordable Care Act, or Obamacare, further adds to the problem, increasing entitlement spending by nearly $2 trillion in just 10 years. The long-term unfunded obligations in the nation’s major entitlement programs loom like an even darker cloud over the U.S. economy. Demographic and economic factors will combine to drive spending in Medicare, Medicaid (including Obamacare), and Social Security to unsustainable heights. The major entitlements and interest on the debt are on track to devour all tax revenues in fewer than 20 years.

    America can become a strong nation again but we need power and money back in the hands of the people to accomplish that. We can take care of the truly needy but we need all able bodied hands on deck, innovating and producing and taking care of themselves. The Democrat model of growing dependency and redistribution is killing us. After 75 years of experimentation, it is clear that socialism is death. We have to change course.

    Don’t be so sure that the plan in it’s final form will raise taxes on “many” middle class taxpayers. We have to see what all of the elements are to determine whether that is true or not.

  7. Jim says:

    The Republicans have wanted to eliminate Social Security and Medicare since each was established. This will drive millions of seniors into severe poverty and without medical care.

    If we want to make American Great Again, we must continue to care for our seniors.

    • Tina says:

      Jim why do you let yourself become a clown for Democrat lies? You just spit out the talking point that Democrats always used when they had control of the narrative (B-4 talk radio and internet) to demonize the opposition.

      Republicans have NEVER proposed an idea or a bill that would “drive millions of seniors into severe poverty and without medical care.” NEVER!!!

      If you would give this some serious thought you would see the insanity in such an accusation.

      Proposals have always ensured that seniors are well taken care of. And in fact, would ensure that future seniors would be MUCH BETTER OFF!

      I am so sick of this ignorant lies. It’s an insult to my intelligence…and it should be to yours.

      We need to reform the plan so that it will still be available in future.

      The latest proposal is featured in the Forbes article, “At Last: A New Social Security Reform Plan,” by Andrew Biggs. Here’s the provision that addresses the lie:

      Safety net: While benefits would be reduced for higher-earning retirees, Johnson’s plan introduces a stronger safety net component to Social Security. For a low-earner who worked a full career, a new minimum benefit would boost monthly benefits by about 10 percent over current benefits. For a very-low earner with a full career, benefits would rise by over 20 percent. There also would be a bump up in benefits for individuals after their 20th year of retirement, a policy designed to offset some of the effects of lower COLA payments.

      One of the things that bothers me about the other party is their unwillingness to discuss problems honestly and seriously. Instead we get high school food fight rhetoric.

      It’s time to hold the Democrats to account…you could do that instead of buying into the false talking points.

      • Jim says:

        Don’t be naive Tina, you are smarter than that. Nobody is talking of eliminating Social Security and Medicare IN PUBLIC, doesn’t mean they don’t want to do it.

        Slowly they keep chipping away at the SS and Medicare that we have been paying into all our working lives. Reagan’s reform was to raise the SS retirement age.

  8. Peggy says:

    Remember this tax plan is being done under reconciliation requirements, which requires only 51 votes in the Senate to pass and not the 60 required for a new bill. Reconciliation requires the plan to stay within the existing budget of which the $1.7 increase is already budgeted into.

    Looks like the Senate is on it’s way to making sure no tax cuts will happen this year with their proposed 7 income levels. They need to “Keep It Simple Stupid” just like Reagan did when he cut the levels from 14 to 3.

    Living in a high income tax state I don’t like don’t being able to not write off my state tax on my federal tax obligation, BUT I don’t think it’s fair for low and no income tax states to pay my share. Why should the single moms in South Dakota working two jobs to support there kids have to pay for those living in Hollywood, San Francisco and even little Chico?

    Plus, when California taxpayers’ actually see what the true out of pocket is then just maybe they’ll wise up and demand the state’s out of control spending to stop. Legislators in high tax states will keep increasing state taxes as long as they know they can pass the cost onto the feds.

    • Tina says:

      Thanks Peggy. Another way to look at it is that we in high tax states are being dinged by the socialists that run our states. Those socialists want us to think of ourselves as victims but it is they who keep raising our taxes and they who keep spending on trains to nowhere and offer incentives for people to come here as be dependent citizens.

      It’s also important to consider the doubling of the standard deduction when calculating how much tax will be due.

      • Peggy says:

        Oh totally agree the socialist are running this state, into it’s grave.

        Tax, tax, spend, spend, stick hand out for federal bailouts when the money taken for taxes to repair roads and upgrade fifty year old dams are spent on illegal immigrant’s attorney fees and bullet trains to nowhere.

        The federal gov’t should get out of the business of subsidizing state taxes. Period. Let people continue to move with their feet from state to state as our Founders set up.

        I also do not like giving more to people who pay little to no taxes, while not giving the same to those who pay the most. They’re the ones who pay salaries, buy more things and pay more for them. Love the saying about, ever get a job from a poor man? Of course not. So not letting those who are successful already keep more of there OWN money to spend on things and jobs does not make sense to me.

        Giving more in the way of tax credits to people who don’t pay taxes at all is not right at the cost to those who are already paying 70+%.
        I believe a flat tax is the only fair tax, when everyone has some skin in the game. Even if it’s just $10, they should be proud they contributed toward their country.

        • Tina says:

          “I believe a flat tax is the only fair tax, when everyone has some skin in the game. Even if it’s just $10, they should be proud they contributed toward their country.”

          I completely agree, Peggy.

  9. Tina says:

    Jim if you want to put your energies into feeling ripped off try this!

    • Jim says:

      Thank you 🙂

      From what I hear the GOP tax bill would end deduction for wildfire and earthquake victims — but not recent hurricane or flood victims.
      http://www.latimes.com/business/la-fi-wildfire-tax-deduction-20171107-story.html

      • Tina says:

        I’d have to read the text to comment with any certainty but the comments that the congress critters made certainly point to the fact that it’s being considered. The Republicans in your article attempted to soften the blow:

        Rep. Tom Rice (R-S.C) said California residents could file amended 2017 returns later. And Rep. Kevin Brady (R-Texas), the committee’s chairman, said he planned to introduce legislation within the next month offering special tax relief for wildfire victims.

        The comment by the Democrat, that this was “cruel,” is a bit harsh.

        Here’s what I think. The game, because of CBO static scoring and congressional rules, is to create the legislation “pays for itself.” So they look for ways to do that, and I guess this is one of the ways, but that doesn’t mean the Republicans like it.

        Democrats have a long history of painting republican proposals as “cruel” and “unfair” but they never apply these words to their own legislative offerings. Obamacare had a lot of cruel elements in it that have had a punishing effect on many Americans but that’s okay with the LA Times because it was a Democrat bill.

        Democrats got around the issue of static scoring in the ACA legislation, and fooled the people into thinking it was “affordable,” by pushing the taxes in Obamacare out for several years.

        At least the Republicans are being up front about it.

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