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Message
CBO Report on new tax plan
Posted on 11/27/17 at 10:57 am
Posted on 11/27/17 at 10:57 am
LINK
At present, without major spending cuts and no corresponding budget hikes, the deficit would increase by 1.4 trillion more than it will at current tax rates.
I'm not opposed to sweeping changes to the tax plan, but this is very much "cart before the horse" as the budget has not been slashed nearly enough to cover this. I would rather fix the budget first, fix the tax code second.
Thoughts?
quote:
The Reconciliation Recommendations of the Senate Committee on Finance, the Tax Cuts and Jobs Act, would amend numerous provisions of U.S. tax law. Among other changes, the bill would reduce most income tax rates for individuals and modify the tax brackets for those taxpayers; increase the standard deduction and the child tax credit; and repeal deductions for personal exemptions, certain itemized deductions, and the alternative minimum tax (AMT). Those changes would take effect on January 1, 2018, and would be scheduled to expire after December 31, 2025. The bill also would permanently repeal the penalties associated with the requirement that most people obtain health insurance coverage (also known as the individual mandate).
The legislation would permanently modify business taxation as well. Among other provisions, beginning in 2019, it would replace the structure of corporate income tax rates, which has a top rate of 35 percent under current law, with a single 20 percent rate. The legislation also would substantially alter the current system under which the worldwide income of U.S. corporations is subject to taxation.
The staff of the Joint Committee on Taxation (JCT) estimates that enacting the legislation would reduce revenues by about $1,633 billion and decrease outlays by $219 billion over the 2018-2027 period, leading to an increase in the deficit of $1,414 billion over the next 10 years. A portion of the changes in revenues would be from Social Security payroll taxes, which are off-budget. Excluding the estimated $27 billion increase in off-budget revenues over the next 10 years, JCT estimates that the legislation would increase on-budget deficits by about $1,441 billion over the period from 2018 to 2027. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
JCT estimates that enacting the legislation would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.
Because of the magnitude of its estimated budgetary effects, the Tax Cuts and Jobs Act is considered major legislation as defined in section 4107 of H. Con. Res. 71, the Concurrent Resolution on the Budget for Fiscal Year 2018. It therefore triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of the bill’s macroeconomic effects. The staff of the Joint Committee on Taxation is currently analyzing changes in economic output, employment, capital stock, and other macroeconomic variables resulting from the bill for purposes of determining these budgetary effects. However, JCT indicates that it is not practicable for a macroeconomic analysis to incorporate the full effects of all of the provisions in the bill, including interactions between these provisions, within the very short time available between completion of the bill and the filing of the committee report.
CBO and JCT have determined that the tax provisions of the legislation contain no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).
At present, without major spending cuts and no corresponding budget hikes, the deficit would increase by 1.4 trillion more than it will at current tax rates.
I'm not opposed to sweeping changes to the tax plan, but this is very much "cart before the horse" as the budget has not been slashed nearly enough to cover this. I would rather fix the budget first, fix the tax code second.
Thoughts?
Posted on 11/27/17 at 10:59 am to skrayper
quote:
the deficit would increase by 1.4 trillion more than it will at current tax rates.
When will ppl realize the deficit is fugazi
Posted on 11/27/17 at 10:59 am to skrayper
quote:
I would rather fix the budget first,
This will never happen, so....
quote:
fix the tax code
At least one way I get to keep some of my money.
Posted on 11/27/17 at 11:02 am to skrayper
quote:
The legislation would permanently modify business taxation
Not opposed to this but why don't they do this for individuals as well?
Posted on 11/27/17 at 11:06 am to skrayper
quote:
but this is very much "cart before the horse" as the budget has not been slashed nearly enough to cover this. I would rather fix the budget first, fix the tax code second.
NO
DESSERT FIRST VEGETABLES LATER
Posted on 11/27/17 at 11:11 am to 90proofprofessional
quote:
DESSERT FIRST VEGETABLES LATER
Well I did have a cup of sherbet before the veggies and meat one time at one of those fancy dining houses.
Posted on 11/27/17 at 11:13 am to skrayper
quote:
At present, without major spending cuts and no corresponding budget hikes, the deficit would increase by 1.4 trillion more than it will at current tax rates.
And nobody on this board gives two shits as long as Trump tells them its ok.
Posted on 11/27/17 at 11:15 am to skrayper
I'm fine with passing the tax plan first. There's no way they're going to make budget cuts before passing a tax cut plan before the 2018 midterm elections anyway. I hate anything that adds anything to the national debt but at least 1.5 trillion added is better than the 9 trillion added during the Obama presidency. That 1.5 trillion assumes modest GDP growth and few if any changes to spending so any budget cuts and better than expected GDP growth will make that 1.5 trillion debt growth even smaller.
Posted on 11/27/17 at 11:17 am to skrayper
quote:
I would rather fix the budget first
Will never happen. The support for cost saving entitlement reform in both chambers is under 5%. The support for cost saving scaledown of military operations is under 30%. No one in gocernment ever has less money to spend next year than they do this year. We live in a world where cutting 1 billion (out of 10 billion) dollars in additional spending over 10 years is a "10% cut in the health of babies" and ensures that Grandma will be eating cat food when she dies in the street.
Posted on 11/27/17 at 11:18 am to skrayper
quote:
At present, without major spending cuts and no corresponding budget hikes, the deficit would increase by 1.4 trillion more than it will at current tax rates
It also assumes ZERO economic growth resulting from the cuts.
Posted on 11/27/17 at 11:19 am to CoachChappy
quote:
At least one way I get to keep some of my money.
Correct, until you give it back and then some. This isnt even a good card trick, pure short term politics.
Posted on 11/27/17 at 11:20 am to skrayper
We spend money like there's no tomorrow and raise the debt ceiling at will without out any concern to the impact.
Why does the budget impact matter in the conversation? They're going to spend money to enrich themselves anyway.
Why does the budget impact matter in the conversation? They're going to spend money to enrich themselves anyway.
This post was edited on 11/27/17 at 11:44 am
Posted on 11/27/17 at 11:22 am to Govt Tide
quote:
but at least 1.5 trillion added is better than the 9 trillion added during the Obama presidency
that 1.5 or 1.4 trillion is on top of other budget deficits that will happen fwiw
Posted on 11/27/17 at 11:24 am to skrayper
quote:
without major spending cuts
Even just freezing spending levels (including a suspension of baseline budgeting) would be a good start. At current estimates, freezing spending at today's levels would create a ~$1.5T surplus in 6 years.
Posted on 11/27/17 at 11:25 am to 90proofprofessional
You seriously think congress has the balls to cut 1.4 trillion from the budget?
We get "granny and women will die" ads when we cut the RATE of spending growth
It would be nuclear holocaust politically to actually cut spending
We get "granny and women will die" ads when we cut the RATE of spending growth
It would be nuclear holocaust politically to actually cut spending
Posted on 11/27/17 at 11:27 am to skrayper
quote:
At present, without major spending cuts and no corresponding budget hikes, the deficit would increase by 1.4 trillion more than it will at current tax rates.
I'm not opposed to sweeping changes to the tax plan, but this is very much "cart before the horse" as the budget has not been slashed nearly enough to cover this. I would rather fix the budget first, fix the tax code second.
Thoughts?
The CBO is NEVER correct.
For instance, they assumed Obamacare Medicaid/Medicare expansion would only cause a 4.3% and 4.7% growth after the first year of Obamacare, but Medicaid went up 14.7% and Medicare went up 16.8% the first year and around the same for the second year.
They work off stupid static forecasting models rather than dynamic. They have no clue how to account for cascading and compounding factors from changes.
They get it wrong when very little changes in economic policy, so how the hell are they going to be close to correct when there are dozens upon dozens of policy changes happening?
Posted on 11/27/17 at 11:27 am to HailHailtoMichigan!
if we can't cut spending we need to fricking pay for it
people feeling that "pain" of paying instead of just deferring it would actually make those spending cuts more likely
people feeling that "pain" of paying instead of just deferring it would actually make those spending cuts more likely
Posted on 11/27/17 at 11:28 am to HailHailtoMichigan!
quote:
You seriously think congress has the balls to cut 1.4 trillion from the budget?
No, which means its stupid to cut revenue. Just call it what it is, short term vote buying.
Posted on 11/27/17 at 11:33 am to skrayper
First, The CBO scores it adding $1.4T OVER TEN YEARS- not annually.
Second, the CBO scores these bills in a static way, I.e. not projecting any GDP growth that would be stimulated by increases in Tax revenue. Presuming 4 - 4.5% economic growth that more than covers the $1.4T over 10 years.
So it’s a WIN, but won’t be reported as such.
Also interesting that Dems are all of a sudden worried about fiscal reapondsibility.
Second, the CBO scores these bills in a static way, I.e. not projecting any GDP growth that would be stimulated by increases in Tax revenue. Presuming 4 - 4.5% economic growth that more than covers the $1.4T over 10 years.
So it’s a WIN, but won’t be reported as such.
Also interesting that Dems are all of a sudden worried about fiscal reapondsibility.
This post was edited on 11/27/17 at 11:35 am
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