White House outlined new tax plan

I can't wait for all the people who want tax reform like this that get hit with more taxes and realize how we had it wasn't that bad.

What income is the 25% going to be at? $90K?

Will we be trimming amount of IRS employees?

I like it. Really the structure of taxes should not be partisan. We can argue over rates but it does no benefit to US citizens overall if there is a rate that nobody pays and encourage people to lie about their deductions.

What was the proposal for cap gains?

The pass through portion, if it actually passes, would be the largest economic stimulus in our lifetimes. When you start to get high wage earners who are extremely good accountants, carpenters etc, paying anywhere from 25-33% of adjusted gross start to understand if they run a business, grow the business, employ people etc, they'd need to take a fair salary, at a likely lower ordinary wage income tax rate, and their pass through distributions would be at 15%, you're going to see people who were sitting on the fence about starting their own businesses, start to do so in large numbers.

I don't understand how they are going to address double taxation on a c-corp with pass through distributions, it would be unfair. Tis said, frankly a guy running an extremely successful dry walling business who was paying 39.6% while Bank of America was paying an effective 20-25% was also unfair.

Prepare for war in DC. I've been following this issue since pre election, and although I haven't read every detail of this latest derivation, I have some understanding of who is going to pile money into lobbyists.

Based on what I've read in the PT, there is a lot of misunderstanding about who would actually get a tax increase. Some pretty smart people from both this board and the PT are missing some essential elements of what is actually taxable income. AGI, and also not unimportant, MAGI which will drive ROTH eligibility if I'm not mistaken.

I can't imagine this makes it through in present form. And I fear, but strongly suspect, the pass through portion is very fragile, and probably will be used in some sort of trade off. And that is unfortunate for everyone in this country, not just those of us getting that tax cut.

The Tax Foundation etc will start to pick this apart and claim increased deficit. There will be increased deficit, and it really can't be argued otherwise, but one needs to understand that many of these places amend their projections retroactively, completely removing their original projections without citing that it was removed, in order to appear to be more historically accurate than they really were. See Ronald Reagan. Tougher to do in the age on archived internet articles, so I'll be interested to see how they manage their expectations and reputations.

At a minimum, some of the comments and projections on the political thread should be entertaining. It is amazing to me how some, who are 100's of times smarter than I, can lack common sense, and forget history.

quote:

---

ump's plan will cut the number of income tax brackets from seven to three

---

This is so silly. That anyone believes this is how you "simplify" the tax code is ridiculous.

If anything, we should have more brackets if we're going to continue with a progressive tax system.

Well I don't think you need any brackets. Just have a standard deduction which eliminates the first xx dollars from taxing and then tax all other dollars at 20%.

quote:

---

I can't wait for all the people who want tax reform like this that get hit with more taxes and realize how we had it wasn't that bad. What income is the 25% going to be at? $90K?

---

For married filing jointly the 25% bracket currently starts at starts at $75,900.00, and for filing single $37,950.00, moving it to $90K would be great.

quote:

---

The two aren't comparable.

---

Of course I don't think they are, as far as comprehensive policies. The federal proposed package is obviously likely to have a much bigger and broader impact on those it touches.

I do think that the Kansas deal gives us some very useful and very rare actual evidence about what heavily altering pass-through provisions might actually do in the real world.

And that issue is something you made a very specific and strong claim on. Was just curious about your take on the results.

quote:

---

Kansas rates were already low.

---

Well yeah, rates are low in all states compared to federal ones.

quote:

---

I think Kansas completely eliminated pass through income taxes

---

How are you not paying attention to highly-visible and controversial test runs for what you tout as the method for the largest stimulus any of us has ever seen? And in a state in your own neighborhood?

Administrative tax data from the last several years for KS & surrounding states has actually shown growth in KS business formation and income under pass-throughs driven by that policy change! The problem is, most of it has come from taxpayers simply shifting sources of income. Tax avoidance, not real growth. LINK

quote:

---

But again, the situations aren't anything alike. It certainly could work out like that. Tax cuts and changes in tax policy aren't enacted in a vacuum.

---

Aren't they similar enough, for pass-throughs in particular? You don't see a similar shift in incentives for wage earners from this proposed policy? Maybe I'm misunderstanding what the administration intends to do with pass-throughs. How is this meaningfully different? I'm willing to entertain the notion that the pass-thru experience from KS doesn't apply here and that your claim is possibly true; I just want to know why.