Tag: Tax Reform

Contributor Post Created with Sketch. Obama: Trump’s Albatross

 

News Update: Obama will begin his third term on January 20. “That’s not possible!” you say. Tell that to Obama — and his cohorts.

The mobilization against Mr. Trump began even before his victory was official. At just after midnight on Election Day, panicked immigration rights activists gathered for a conference call to strategize. A few days later, more than 80 representatives of 57 progressive groups convened in the offices of the Leadership Conference on Civil and Human Rights in Washington.

Okay, he’s not the next president. But he’s acting like he is.

Contributor Post Created with Sketch. Fundamental Transformation … of the Tax Code

 

I’m writing this at the inspiration of @jamielockett in the interest of demonstrating that we conservatives can and do say “yes.” Some of us may have already broached the subject of whether or not we’re actually conservatives, but whatever, Mr. Lockett. ;)

So, how do we on the Right not merely say “no”? I began discussing the topic here, but I’ve since had the opportunity to think about just what sort of reforms we can advocate which are not merely a return to the past but a way forward into the future; a revolution if you will that might permanently change the game.

Contributor Post Created with Sketch. On Donald Trump’s Confusing Explanation of His Tax Reform Strategy

 

Donald TrumpDonald Trump has put forward a rather detailed tax reform plan. It has already been scored by several organizations, including the Tax Foundation and the Tax Policy Center. Some on the right, including “supply-siders,” have praised the Trump plan for its deep reduction in marginal tax rates on both the personal and corporate side. As I recently wrote for The Week:

Economist Arthur Laffer — the Reagan-era godfather of supply-side economics — says the Trump plan “sounds great” to him. Indeed, Laffer just told The Washington Post that he thinks Americans will find it so compelling that it will help sweep Trump to a landslide victory in November. (Perhaps the first-ever dynamically scored political forecast.) Economic commentator Lawrence Kudlow, another Reaganite supply-sider, calls it “an excellent plan that would substantially grow the American economy.”

Critics have pointed out that the Trump plan would lose trillions in revenue at a time of high government debt. What’s more, Trump claims his tax cuts would pay for themselves through faster economic growth, which seems highly unlikely.

Contributor Post Created with Sketch. “The Most Consequential Election” and The Big Enchilada

 

shutterstock_230787199It’s been said so many times that the phrase scarcely retains meaning: “This presidential election is one of the most consequential in our lifetimes.” Everybody says that about every presidential election, but only hindsight can reveal whether or not that is true.

2008 was obviously important, but for reasons which don’t look good at the end of the day. We don’t need to rehash that. Many people consider the election of 2000 to have been consequential but — with 20/20 hindsight — its attendant issues appear quotidian in comparison to the nation’s problems today. Remember: we were coming off of a decade of relative peace and extraordinary prosperity. Americans faced a choice between two relatively moderate Southerners, both scions of political dynasties. Consequently, the election hinged more on in-group signalling than it did expressions of stark ideological difference.

Contemplate how different things are now: Al Gore’s militaristic clone Jim Webb couldn’t thread the needle in the Democratic primaries, and George W. Bush’s actual brother is an afterthought in the Republican contest.

Contributor Post Created with Sketch. What We Know So Far about the GOP Presidential Tax Plans

 

Bobby JindalThe Tax Foundation analysis of Bobby Jindal’s tax plan:

  • Governor Jindal’s tax plan would substantially lower individual income taxes, eliminate the corporate income tax, and repeal a number of complex features in the current tax code.
  • Governor Jindal’s plan would cut taxes by $11.3 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $9 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.

So let’s summarize the four plans examined by the Tax Foundation model:

  • The Jeb Bush plan would lose $1.6 trillion over a decade (with economic feedback), lead to a 10% higher GDP over the long-term, and boost income in the bottom fifth by 10%, the middle fifth by 13%,the top fifth by 10%, and the top one percent by 16%.
  • The Marco Rubio plan tax plan would lose $1.7 trillion over a decade (with economic feedback), lead to a 15% higher GDP over the long run, and boost income in the the bottom fifth by 40%, the middle fifth by 16%,the top fifth by 18%, and the top one percent by 28%.
  • The Donald Trump plan would lose $10 trillion over a decade (with economic feedback), lead to an 11% higher GDP over the long term, and boost income in the the bottom fifth by 11%, the middle fifth by 19%,the top fifth by 21%, and the top one percent by 27%.
  • The Rand Paul plan would lose $1 trillion over a decade (with economic feedback, lead to a 9% higher GDP over the long term, and boost average incomes by 16%.
  • The Jindal plan would lose $10 trillion over a decade with economic feedback, lead to a 14% higher GDP over the long run, would boost income in the the bottom fifth by 8%, the middle fifth by 15%,the top fifth by 22%, and the top one percent by 26%.

One important caveat (other than the vagaries of dynamic scoring) is that the TF model does not factor the “fiscal costs of higher interest payments, as well as the macroeconomic effects of the spending reductions needed to bring the budget into balance.” Let me also add that one other thing the TF model shows is that personal income tax cuts tend to have the biggest revenue loss and the least GDP bang for the trillion bucks.

Promoted from the Ricochet Member Feed by Editors Created with Sketch. A Pompous Lorax and a Hidden Surtax

 

loraxWho were the Hollywood suits who thought a furry orange troll with Danny DeVito’s voice lecturing people on trees was a winning combination for a family movie? I suppose I’m not really one to talk, as I was suckered by my kids into spending six bucks renting The Lorax last weekend. Having been reintroduced to Dr. Seuss’ works since having children, I have come to the conclusion that his approach primarily consists of substituting lame rhyming for decent writing. I know, look in the mirror. How hard is it to rhyme when one is no longer confined to having to use actual words?

The passage of another mythical hairy fellow through my house over the weekend – no, not my wife’s uncle; the little lagomorpha who leaves baskets of candy for the kids — reminded me that America’s next great holiday is just around the corner: Tax Day. As I followed my tax ritual of dumping several dozen forms on my accountant a couple weeks ago, I started thinking about one of the darker sides of the advent of computing. Would it be possible to have such a monstrosity of a tax code if not for modern computing power? If, with pen and paper, people still had to fill out a 1040 line by line subtracting $1000 times the number of squirrels residing in their backyard from line 218a to determine their taxable income, would they still put up with all of it? I tend to doubt it. In retrospect, one of the major differences between now and 30 years ago that made the Tax Reform Act of 1986 possible is the fact that a Tandy 1000 did not come preloaded with TurboTax.

Another less obvious drain caused by our byzantine tax system — one I think about when I meet one of the many tax attorneys, tax accountants, and other tax professionals in our society — is all the wasted brain power the system consumes. My accountant is a smart guy and if he were not occupied with filling out IRS form 8962 I’d wager he would be able to contribute to society in many fruitful ways. To see the magnitude of the issue, just look at two organizations that focus on managing taxes: The IRS has north of 90,000 workers and H&R Block has about 80,000 employees. These two tax-related entities alone represent 170,000 working persons. How much better off would we be if the talents of these individuals could be applied to something more productive than managing the income tax?

Contributor Post Created with Sketch. A Tax ‘Reform’ For The Worse — Andrew Stuttaford

 

Over at the Washington Examiner, Philip Klein argues in favor of phasing out the mortgage interest tax deduction, an idea that seems to be gaining some traction with the likes of Republicans, such as House Ways and Means Chairman Rep. David Camp. It shouldn’t have.

Phasing out this deduction may, at least to market fundamentalists, rest on sound economic logic, but politically there is very little to be said for it. Before we get to why, let’s remember a few things: