calbear93 said:

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In a lot of ways, this is a tax increase for the wealthy. In addition, this has the potential to chill the ever increasing income inequality between top earners in a corporation and everyone else. The stock option will go by the wayside since the tax is payable upon vesting and not upon exercise. In addition, the ability to defer taxes for the wealthy by deferring delivery date after vesting will be gone. Most importantly, the loophole to exempt performance based compensation from the 1 million cap under 162(m) will be gone. The top rate stays for the wealthy since it still applies to income over 500k. Wealthy folks won't be able to get tax benefit from financing above average-cost houses.

What do you guys hate about this? That many wealthy folks will have to pay more or get paid less?

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What I hate is that most of these increases target high income earners in blue states, period. If I were making the same salary in Texas where a nice home in a desirable neighborhood within a 30 minute commute costs something like $500K, not $2.5M, and I weren't paying 13% in state income tax on top of the top federal tax, I'd be fine with this. You can look at this thru rose-colored glasses as an attempt to close the income gap, but the reality is that this program targets high income earners, and protects wall street earners. In this new era devoid of corporate pensions and high federal and state income taxes, it's extremely difficult to save enough money thru 401k programs to fund a retirement anywhere near one's current lifestyle and I'm really pissed off that I'm about to get clobbered by a new tax code strictly because of where I live.

OaktownBear said:

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calbear93 said:

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That's a fair point. I personally would hope that the offsetting revenue can be found elsewhere. However, every special interest group will have a reason why increasing taxes on them would be catastrophic. This one probably creates negative long term growth, but I don't know enough about this aspect of the proposal.

You will note that I was responding to the post about how the tax proposal disproportionately affects the wealthy in California (who also happen to have disproportionate wealth overall). My point is that the tax proposal will raise taxes for many wealthy folks in general and that there was no compelling reason for the federal government to get less tax revenue because a state decided to raise its taxes or because the company elects to defer payroll through equity instead of cash. People know about state taxes like they know about other higher cost of living in the coasts. They make their choice accordingly. There is no tax benefit for paying other higher cost for living on the coasts. Likewise, there is very little objective reason why home owners should be rewarded by the government more than those who have to rent. 500K is just a compromise. Everyone wants to raise taxes until it impacts them. One way to simplify is to get rid of all the special interest exemptions. I am not saying that this accomplished the goal, but some rich folks will just have to pay more for the benefit of all. If this passes, those rich folks will also include us. I'm OK with us privileged folks on the coast paying more.

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I'm sorry, but you are a sucker. Rich people do not ever pay more, least of all with this proposal. First of all, they don't give a damn about a couple percentage points on the upper tax bracket because most of their income is taxed at the much lower capital gains rate. See Romney's tax rate compared to people like Gingrich. If you aren't an athlete or actor who makes an extremely high salary and comparatively low investment income you don't get hit hard. The bulk of the cuts go to wealthy by eliminating alternative min tax and drastically cutting the corporate rates. Over all, they have a big plus.

Stock options are not just the realm of the wealthy. It is a major form of compensation for the rank and file in the tech industry. Often, stock options will amount to a few thousand dollars for an employee. They aren't just multi million grants to management.

Basically the republicans wanted to give a fat tax cut to their friends and they are doing so by screwing their enemies. Screw universities and anyone with an education by doing away with tax breaks for education including those that can only be claimed by people making $80k or less. Screw the tech industry. Screw people in high tax, high cost of living states in the $150k - $300k range REALLY hard so the can't contribute to the democrats while giving the same income range in red states nice cuts. Reduce the mortgage deduction so that blue states pay more and it destroys their housing market. But hey, according to you I can choose not to live in a blue state. My expectations as an American should be to assume the party in power will screw over the other side and I should move to a red state to enjoy the spoils. Hope you feel the same way when the democrats retaliate as I will demand such from any democrat in office.

Corporate taxes needed to be restructured. The nominal rates were high. However, the effective rates were average because of the stupid loopholes. They could have created and paid for a reasonable system by lowering the rates and eliminating the loopholes. Instead, they gave them 100% of the benefit and 0% of the pain.

I like your theory of compromise is great. You pay zero now. I want you to pay $50k. Okay. You pay $25k. Compromise! I'm just glad they didn't ask me to pay a million or I'd be paying $500k for the compromise.

This bill is designed to massively screw over the educated and every democratic group they can hit not just on taxes but on economic impact. Any Californian who votes republican after this is a complete and utter moron.

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I'd be curious how you and others define rich. Because by many people's measure (top 10%), most people in urban California are "rich."

According to the link below, Top 10% is adjusted gross income of $133,445. Top 5% is AGI of $214,462. Top 1% is AGI of $465,626

I'm getting the numbers from here (not sure if they are right but it seems in line with other numbers I've seen):

https://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/

I do agree the tax bill is designed to benefit the republican's constituencies in the sense that Urban blue state people (which includes me) are potentially getting screwed. But that is no different than most bills. - Obamacare financially rewarded "democrat voters" and taxed or increased healthcare costs for typical republican voters (yes, I'm generalizing). The same could be said for most bills.

Personally, I'd prefer a revenue neutral plan that simplified the tax structure. I would like to see spending controls, most notably entitlement reform (which apparently no one cares about anymore).

wifeisafurd said:

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ninetyfourbear said:

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wifeisafurd said:

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Anyone catch the new tax on college endowments? Apaprently the threshold was increased so maybe Cal with its low endowment might be safe. However, if the tax applies to UC as a whole, kiss 1.5% of the UC budget good bye (am I reading this right?)! What next, a tax on late night comics? What is the pubic policy behind this one, other than colleges are seen as liberal bastions? Why colleges and not other non-profits with huge endowments?

BTW, is the charitable deduction still being eliminated in an effort to really slam higher eduction?

A qualification is that the 7 figure attorney who is being vilified (and everyone else making that many zeros) has most of their itemized deductions phased out in any event. So again, as far as this board is concerned, it is the California professional making between 100K to 500K who really being shafted the most.

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I think the college endowment tax is targeted at Harvard. IIRC, it would apply if assets were greater than $100,000 per student and only for private schools.

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Good, thanks. I guess in the Pac, only Furd and SC are in the crosshairs. Still, I don't see the policy behind taxing money earmarked for higher eduction, even if only private schools.

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The rationale is that these schools have massive endowments and don't pay any taxes on their gains, all while charging $60K plus. In effect, the government is subsidizing private universities to a much greater extent than UC is funded with public dollars.

dajo9 said:

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TheFiatLux said:

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Sebastabear said:

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I think you could append "ifornia"to the end of your title and be completely accurate.

Hard to imagine Congress could come up with a better bill to ruin California and the economic engine it provides to the entire country if not the world if you tried. Let's see...

1. No more ability to deduct state taxes = massive tax increase on high earners

2. Property tax deductions capped at $10k means (given our home prices) most people who itemize and bought a home in LA or the Bay Area in the last decade lose a good sized sized deduction.

3. Maximimum mortgage deduction halved. Live in Kansas? Not a problem. Live in CA? See point 2.

4. Loss of ability to deduct student debt? Luckily we don't have an educated workforce or anything.

5. And my favorite... Stock options and restricted stock units (basically the magic juice that makes the Valley economy run) are gone. These things are now immediately taxable for the employee on vesting. Not a problem if you are an employee of a public company since you can just sell some of your stock in the market to pay your tax bill, but if you work for a private company like Uber or Airbnb or Palantir - you know basically the companies that have generated most of the growth over the past five years - you are screwed.

So all in all a disaster for the state and for all of the States who feed off of us. They might not see it now, but they will.

Any Ca rep voting for this should be drummed out of office.

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I make it a point to NEVER disagree with Sebastabear (I enjoy riding his coattails too much!!!), but I'm not sure on some of this. This is sort of like the Gordion knot, but I'm not sure why someone in North Dakota or Utah, or New Mexico, should subsidize our home prices and taxes because of where we live. Now California gives more to the Fed budget than we get, but even so, I don't know, there's a lot not right about the tax code. Maybe if it was indexed or something. This is a conversation I would like to have over a long overdue dinner!

Like you I am a fiscal conservative.

My favorite has been listening to a few of my very liberal friends talk about how they were planning on buying a Tesla, but may not now, now that the tax incentive has been removed... these are the same people who for years have been saying "I'm happy to pay more in taxes" until of course they're faced with having to pay mor in taxes...

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I am friends with many liberals and I've never had similar conversations to what you report. If it makes you feel better, I plan on the Tesla Model 3 being my next car regardless of tax incentives. Also, I voted to raise my own taxes as recently as September in a local school referendum.

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If liberals don't object to paying more taxes, then why does this thread exist? The trump plan is targeted to make mostly liberal areas of the country pay more taxes.

Obviously, the answer is that liberals don't want to pay more taxes while other people pay less - kind of how most people feel actually. But that brings us to the larger point - most people want to keep all of the deductions and "freebies" they like (mortgage deduction, charitable deduction, student loans, etc.) while increasing taxes on the things they don't like.

One final thought - many liberals "philanthropists" like Buffet, Gates, etc. are running around insisting the rich should pay more, all while making sure that significant portions (if not most) of their wealth are gifted to family foundations which support their progeny. The net effect is to deprive government of taxes on that wealth - both capital gains during their lifetime and ultimately estate taxes. Very hypocritical.

OaktownBear said:

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wifeisafurd said:

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dajo9 said:

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wifeisafurd said:

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dajo9 said:

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calbear93 said:

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Income and education do not make you elitist. Thinking that the regular folks are ignorant and need to be led like little children is elitist. Yeah, I would take that bet that most working folks would know the difference between capital gain and ordinary income. Most regular folks file tax returns and own homes.

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Very few folks file any kind of sizeable capital gain on any kind of regular basis. I would love to see this polled and I would bet money you are wrong on what the average American knows about ordinary income vs. capital gain tax treatment.

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Let us test that theory about all the masses beings so dumb:

Per a April 17, 2017 NPR study (with excerpts copied):

1)Americans underestimate the share of Americans who don't pay federal income taxes

Given four choices of how many Americans pay zero or negative federal income taxes (11, 27, 45, or 63 percent), fully 70 percent of poll respondents chose the options under the correct answer, which was 45 percent. Some of these people simply have no taxable income, and others get money back as a result of refundable tax credits like the Earned Income Tax Credit. (Of course, these people might pay other taxes, like payroll taxes, as well as whatever sales and property taxes their states impose.)

2) Americans didn't appreciate that for the highest earners, the percent of federal income taxes they pay now is significantly higher than it was in 1980. How does that work? As the Tax Policy Center's Roberton Williams explained to NPR, the share of income going to the rich has climbed in a big way over the last few decades. So how Americans think about this could affect what they think should happen to the top tax rates on the richest. In 1980, the top 10 percent brought in 32 percent of all adjusted gross income, according to the Tax Foundation. In 2013, it was 46 percent. For example, many Americans also believe taxes should be raised on the richest. In contrast, a sizable majority said their taxes should be reduced, including those in the highest income tax brackets.

3) Americans also appear to have strong views on how people earn their money. We asked people to what degree they agreed with this statement: "The tax rate on income from work should be lower than the tax rate on income from wealth.

75 percent said they did, including 77 percent of Democrats, 71 percent of Republicans and 84 percent of independents. This is another result that might make the richest Americans squirm. The polling showed taxpayers understood the rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains income they get from selling investments like stocks. Most of those capital gains are taxed at a rate far below that top income tax rate. (People at any income level of course can have those kinds of investments, but capital gains are overwhelmingly concentrated at the top of the income spectrum.)

4) Americans overestimate how important income taxes are to government revenue. About half of the poll's respondents (with very little variance by party) said they believe 75 percent of the federal government's revenue comes from income taxes. In reality, it's just under half. Of all the taxes Americans pay, income tax probably requires the most thought. After all, payroll tax comes automatically out of each paycheck. Sales tax is imposed at the cash register. And so on. So maybe it makes sense that Americans think all that work they put into filling out their forms ends up doing the lion's share of funding the government.

5)On tax policy, views aren't always all that partisan. Our poll, nearly half of Democrats 45 percent agreed with the proposition that "federal income taxes should be cut for all income levels." Likewise, Republicans the party that has spoken of "makers" and "takers" were split roughly evenly on the idea that tax cuts for the wealthy lead to economic growth. (Democrats and independents tended to disagree slightly more that is, to say that tax cuts for the wealthy do not lead to that growth.)These are only two examples, but they suggest that partisan messaging in Washington on some specific issues doesn't necessarily filter down to Americans.

6)Americans agree: Taxes are too complicated (but that's no reason to cheat). My comment: that won't change with this legislation.

Hopefully, you didn't bet much.

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Nothing in that poll shows me to be wrong. The author explaining differences between capital gains and ordinary income tax treatment doesn't say anything about what the average American knows about it.

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Yes, if you ignore wording "The polling showed taxpayers understood the rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains income they get from selling investments like stocks."

According to the IRS, 53.9% of those stupid masses have a taxable gain or loss each year. Guess their stupid to know what is on their tax return. Elite on dude.

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Your last sentence is completely wrong. 53.9% of those earning $200K-$1M have a taxable gain. To the contrary "Fewer than one in seven individual taxpayers report taxable capital gains in any year. In 2006 just 13.4 million out of 138.3 million taxpayers reported taxable net gains (net long-term gains in excess of net short-term capital losses and capital gains distributions, which are taxed at favorable capital gains rates)

Quite honestly, I would argue it is pretty out of touch (one might say elitist) to think that over half of Americans have taxable capital gains each year.

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yup, I misread the number. Just so we know that everyone can make a mistake, you said the following:


"I'm sorry, but you are a sucker. Rich people do not ever pay more, least of all with this proposal. First of all, they don't give a damn about a couple percentage points on the upper tax bracket because most of their income is taxed at the much lower capital gains rate." Set forth below are the average tax rates by income levels.

How Much Do People Pay in Taxes? https://taxfoundation.org/how-much-do-people-pay-taxes/

Guess we are both elitist.

dajo9 said:

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TheFiatLux said:

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Sebastabear said:

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I think you could append "ifornia"to the end of your title and be completely accurate.

Hard to imagine Congress could come up with a better bill to ruin California and the economic engine it provides to the entire country if not the world if you tried. Let's see...

1. No more ability to deduct state taxes = massive tax increase on high earners

2. Property tax deductions capped at $10k means (given our home prices) most people who itemize and bought a home in LA or the Bay Area in the last decade lose a good sized sized deduction.

3. Maximimum mortgage deduction halved. Live in Kansas? Not a problem. Live in CA? See point 2.

4. Loss of ability to deduct student debt? Luckily we don't have an educated workforce or anything.

5. And my favorite... Stock options and restricted stock units (basically the magic juice that makes the Valley economy run) are gone. These things are now immediately taxable for the employee on vesting. Not a problem if you are an employee of a public company since you can just sell some of your stock in the market to pay your tax bill, but if you work for a private company like Uber or Airbnb or Palantir - you know basically the companies that have generated most of the growth over the past five years - you are screwed.

So all in all a disaster for the state and for all of the States who feed off of us. They might not see it now, but they will.

Any Ca rep voting for this should be drummed out of office.

---

I make it a point to NEVER disagree with Sebastabear (I enjoy riding his coattails too much!!!), but I'm not sure on some of this. This is sort of like the Gordion knot, but I'm not sure why someone in North Dakota or Utah, or New Mexico, should subsidize our home prices and taxes because of where we live. Now California gives more to the Fed budget than we get, but even so, I don't know, there's a lot not right about the tax code. Maybe if it was indexed or something. This is a conversation I would like to have over a long overdue dinner!

Like you I am a fiscal conservative.

My favorite has been listening to a few of my very liberal friends talk about how they were planning on buying a Tesla, but may not now, now that the tax incentive has been removed... these are the same people who for years have been saying "I'm happy to pay more in taxes" until of course they're faced with having to pay mor in taxes...

---

I am friends with many liberals and I've never had similar conversations to what you report. If it makes you feel better, I plan on the Tesla Model 3 being my next car regardless of tax incentives. Also, I voted to raise my own taxes as recently as September in a local school referendum.

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Do you have kids that are of school age or about to be?

oski003 said:

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dajo9 said:

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TheFiatLux said:

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Sebastabear said:

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I think you could append "ifornia"to the end of your title and be completely accurate.

Hard to imagine Congress could come up with a better bill to ruin California and the economic engine it provides to the entire country if not the world if you tried. Let's see...

1. No more ability to deduct state taxes = massive tax increase on high earners

2. Property tax deductions capped at $10k means (given our home prices) most people who itemize and bought a home in LA or the Bay Area in the last decade lose a good sized sized deduction.

3. Maximimum mortgage deduction halved. Live in Kansas? Not a problem. Live in CA? See point 2.

4. Loss of ability to deduct student debt? Luckily we don't have an educated workforce or anything.

5. And my favorite... Stock options and restricted stock units (basically the magic juice that makes the Valley economy run) are gone. These things are now immediately taxable for the employee on vesting. Not a problem if you are an employee of a public company since you can just sell some of your stock in the market to pay your tax bill, but if you work for a private company like Uber or Airbnb or Palantir - you know basically the companies that have generated most of the growth over the past five years - you are screwed.

So all in all a disaster for the state and for all of the States who feed off of us. They might not see it now, but they will.

Any Ca rep voting for this should be drummed out of office.

---

I make it a point to NEVER disagree with Sebastabear (I enjoy riding his coattails too much!!!), but I'm not sure on some of this. This is sort of like the Gordion knot, but I'm not sure why someone in North Dakota or Utah, or New Mexico, should subsidize our home prices and taxes because of where we live. Now California gives more to the Fed budget than we get, but even so, I don't know, there's a lot not right about the tax code. Maybe if it was indexed or something. This is a conversation I would like to have over a long overdue dinner!

Like you I am a fiscal conservative.

My favorite has been listening to a few of my very liberal friends talk about how they were planning on buying a Tesla, but may not now, now that the tax incentive has been removed... these are the same people who for years have been saying "I'm happy to pay more in taxes" until of course they're faced with having to pay mor in taxes...

---

I am friends with many liberals and I've never had similar conversations to what you report. If it makes you feel better, I plan on the Tesla Model 3 being my next car regardless of tax incentives. Also, I voted to raise my own taxes as recently as September in a local school referendum.

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Do you have kids that are of school age or about to be?

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Yes. But you can go back to prior elections in which I supported politicians advocating Obamacare even though I was one of the few Americans who actually paid Obamacare taxes.

BearGoggles said:

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Personally, I'd prefer a revenue neutral plan that simplified the tax structure. I would like to see spending controls, most notably entitlement reform (which apparently no one cares about anymore).

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Nobody ever cared about entitlement reform. These are things that Republican pundits and politicians say to appeal to their narrow base. There is no majority constituency for it and as soon as Republicans are in power they don't do it. Sorry to be the one to break the news to you - you've been conned.

wifeisafurd said:

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OaktownBear said:

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wifeisafurd said:

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dajo9 said:

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wifeisafurd said:

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dajo9 said:

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calbear93 said:

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Income and education do not make you elitist. Thinking that the regular folks are ignorant and need to be led like little children is elitist. Yeah, I would take that bet that most working folks would know the difference between capital gain and ordinary income. Most regular folks file tax returns and own homes.

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Very few folks file any kind of sizeable capital gain on any kind of regular basis. I would love to see this polled and I would bet money you are wrong on what the average American knows about ordinary income vs. capital gain tax treatment.

---

Let us test that theory about all the masses beings so dumb:

Per a April 17, 2017 NPR study (with excerpts copied):

1)Americans underestimate the share of Americans who don't pay federal income taxes

Given four choices of how many Americans pay zero or negative federal income taxes (11, 27, 45, or 63 percent), fully 70 percent of poll respondents chose the options under the correct answer, which was 45 percent. Some of these people simply have no taxable income, and others get money back as a result of refundable tax credits like the Earned Income Tax Credit. (Of course, these people might pay other taxes, like payroll taxes, as well as whatever sales and property taxes their states impose.)

2) Americans didn't appreciate that for the highest earners, the percent of federal income taxes they pay now is significantly higher than it was in 1980. How does that work? As the Tax Policy Center's Roberton Williams explained to NPR, the share of income going to the rich has climbed in a big way over the last few decades. So how Americans think about this could affect what they think should happen to the top tax rates on the richest. In 1980, the top 10 percent brought in 32 percent of all adjusted gross income, according to the Tax Foundation. In 2013, it was 46 percent. For example, many Americans also believe taxes should be raised on the richest. In contrast, a sizable majority said their taxes should be reduced, including those in the highest income tax brackets.

3) Americans also appear to have strong views on how people earn their money. We asked people to what degree they agreed with this statement: "The tax rate on income from work should be lower than the tax rate on income from wealth.

75 percent said they did, including 77 percent of Democrats, 71 percent of Republicans and 84 percent of independents. This is another result that might make the richest Americans squirm. The polling showed taxpayers understood the rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains income they get from selling investments like stocks. Most of those capital gains are taxed at a rate far below that top income tax rate. (People at any income level of course can have those kinds of investments, but capital gains are overwhelmingly concentrated at the top of the income spectrum.)

4) Americans overestimate how important income taxes are to government revenue. About half of the poll's respondents (with very little variance by party) said they believe 75 percent of the federal government's revenue comes from income taxes. In reality, it's just under half. Of all the taxes Americans pay, income tax probably requires the most thought. After all, payroll tax comes automatically out of each paycheck. Sales tax is imposed at the cash register. And so on. So maybe it makes sense that Americans think all that work they put into filling out their forms ends up doing the lion's share of funding the government.

5)On tax policy, views aren't always all that partisan. Our poll, nearly half of Democrats 45 percent agreed with the proposition that "federal income taxes should be cut for all income levels." Likewise, Republicans the party that has spoken of "makers" and "takers" were split roughly evenly on the idea that tax cuts for the wealthy lead to economic growth. (Democrats and independents tended to disagree slightly more that is, to say that tax cuts for the wealthy do not lead to that growth.)These are only two examples, but they suggest that partisan messaging in Washington on some specific issues doesn't necessarily filter down to Americans.

6)Americans agree: Taxes are too complicated (but that's no reason to cheat). My comment: that won't change with this legislation.

Hopefully, you didn't bet much.

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Nothing in that poll shows me to be wrong. The author explaining differences between capital gains and ordinary income tax treatment doesn't say anything about what the average American knows about it.

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Yes, if you ignore wording "The polling showed taxpayers understood the rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains income they get from selling investments like stocks."

According to the IRS, 53.9% of those stupid masses have a taxable gain or loss each year. Guess their stupid to know what is on their tax return. Elite on dude.

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Your last sentence is completely wrong. 53.9% of those earning $200K-$1M have a taxable gain. To the contrary "Fewer than one in seven individual taxpayers report taxable capital gains in any year. In 2006 just 13.4 million out of 138.3 million taxpayers reported taxable net gains (net long-term gains in excess of net short-term capital losses and capital gains distributions, which are taxed at favorable capital gains rates)

Quite honestly, I would argue it is pretty out of touch (one might say elitist) to think that over half of Americans have taxable capital gains each year.

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yup, I misread the number. Just so we know that everyone can make a mistake, you said the following:


"I'm sorry, but you are a sucker. Rich people do not ever pay more, least of all with this proposal. First of all, they don't give a damn about a couple percentage points on the upper tax bracket because most of their income is taxed at the much lower capital gains rate." Set forth below are the average tax rates by income levels.

How Much Do People Pay in Taxes? https://taxfoundation.org/how-much-do-people-pay-taxes/

Guess we are both elitist.

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This reminds me of a NYT article that I read about why people excuse the Patriots' cheating past. I see so much of that in how we discuss politics. https://www.nytimes.com/2017/02/05/sports/football/new-england-patriots-super-bowl-cheating.html

There was a funny video I watched where certain students, when asked to provide their opinion on the tax reform proposed by the Republicans, expressed how it was unfair, benefits the rich executives, corporations, etc. When told of specific proposals but presented it as something Bernie Sanders proposed, they praised how progressive the ideas were.

When I read things like "capital gains every year" as if you need to have capital gains every year and not just one year to understand what it is, I just shake my head. When I read that stock options are not just for the rich (i.e., most people have it and elimination of deferral of taxes on the options beyond vesting impacts unfairly the working stiff), but those same workers who get and understand options don't understand the concept of capital gain, I have to shake my head. If Sanders had proposed limiting deductions for annual compensation in excess of a million dollars to covered persons (e.g., top paid executives), most liberals would praise it. If Bernie had said it is not fair for executives to defer payment of taxes and get basically an interest free loan, most liberals would praise it. But who proposes an idea is infinitely more important than what is proposed. I hate many of the components of the tax proposals (while recognizing the absolute need for a reduction in corporate tax rate without increasing the deficit). However, my point in my earlier posts was to have people defend why they hate certain proposals. What I got was they hate the proposals because they hate rich people who were not like them but liked the rich people who were like them. But ultimately, I suspect they hate it because they hate who was proposing the reforms (i.e., the clan opposite their clan).

And it is not a liberal thing or a conservative thing. It is the same reason why sane people would excuse Trump for his behavior when they would discipline their own kids for the same behavior.

You can debate most things, but when it comes to sports, politics, etc. where you have claimed your identity to your position, logic has no role in the discussions because no one will think logically when their identity is threatened. We will twist points, twist our brains, twist our words, to keep our sense of identity secured. That is why political discussions are so fun and so stupid at the same time and so appropriate for a sports forum. No one will ever change their mind on politics or sports.

Much of what you say rings true CB93, but it's hard to evaluate individual tax changes in a vacuum. When you are robbing Peter to pay Paul, it very much matters who Peter is and who Paul is. It appears with this tax "reform", Paul seems to be people with businesses that look very much like we think Donald Trump's businesses look like.

It's impossible to do this sort of comprehensive tax reform without picking winners and losers which is likely why it's been politically infeasible to do so for so many years. The one thing that republicans seem to be banking on is deciding that in the aggregate the losers will be people in blue states and the winners will be people in red states so understandably that's the gloss by which many have evaluated individual provisions even if some of them (like 162(m) wouldn't otherwise be controversial). I'm actually surprised democrats are complaining about 162(m), that one (like carried interest) seems like an easy one to get support for since it impacts so few. I think it would raise less than $1B a year in tax revenues as well and is offset by the reduced corporate tax rate, so it's pretty marginal to begin with.

BearGoggles said:

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OaktownBear said:

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calbear93 said:

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That's a fair point. I personally would hope that the offsetting revenue can be found elsewhere. However, every special interest group will have a reason why increasing taxes on them would be catastrophic. This one probably creates negative long term growth, but I don't know enough about this aspect of the proposal.

You will note that I was responding to the post about how the tax proposal disproportionately affects the wealthy in California (who also happen to have disproportionate wealth overall). My point is that the tax proposal will raise taxes for many wealthy folks in general and that there was no compelling reason for the federal government to get less tax revenue because a state decided to raise its taxes or because the company elects to defer payroll through equity instead of cash. People know about state taxes like they know about other higher cost of living in the coasts. They make their choice accordingly. There is no tax benefit for paying other higher cost for living on the coasts. Likewise, there is very little objective reason why home owners should be rewarded by the government more than those who have to rent. 500K is just a compromise. Everyone wants to raise taxes until it impacts them. One way to simplify is to get rid of all the special interest exemptions. I am not saying that this accomplished the goal, but some rich folks will just have to pay more for the benefit of all. If this passes, those rich folks will also include us. I'm OK with us privileged folks on the coast paying more.

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I'm sorry, but you are a sucker. Rich people do not ever pay more, least of all with this proposal. First of all, they don't give a damn about a couple percentage points on the upper tax bracket because most of their income is taxed at the much lower capital gains rate. See Romney's tax rate compared to people like Gingrich. If you aren't an athlete or actor who makes an extremely high salary and comparatively low investment income you don't get hit hard. The bulk of the cuts go to wealthy by eliminating alternative min tax and drastically cutting the corporate rates. Over all, they have a big plus.

Stock options are not just the realm of the wealthy. It is a major form of compensation for the rank and file in the tech industry. Often, stock options will amount to a few thousand dollars for an employee. They aren't just multi million grants to management.

Basically the republicans wanted to give a fat tax cut to their friends and they are doing so by screwing their enemies. Screw universities and anyone with an education by doing away with tax breaks for education including those that can only be claimed by people making $80k or less. Screw the tech industry. Screw people in high tax, high cost of living states in the $150k - $300k range REALLY hard so the can't contribute to the democrats while giving the same income range in red states nice cuts. Reduce the mortgage deduction so that blue states pay more and it destroys their housing market. But hey, according to you I can choose not to live in a blue state. My expectations as an American should be to assume the party in power will screw over the other side and I should move to a red state to enjoy the spoils. Hope you feel the same way when the democrats retaliate as I will demand such from any democrat in office.

Corporate taxes needed to be restructured. The nominal rates were high. However, the effective rates were average because of the stupid loopholes. They could have created and paid for a reasonable system by lowering the rates and eliminating the loopholes. Instead, they gave them 100% of the benefit and 0% of the pain.

I like your theory of compromise is great. You pay zero now. I want you to pay $50k. Okay. You pay $25k. Compromise! I'm just glad they didn't ask me to pay a million or I'd be paying $500k for the compromise.

This bill is designed to massively screw over the educated and every democratic group they can hit not just on taxes but on economic impact. Any Californian who votes republican after this is a complete and utter moron.

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I'd be curious how you and others define rich. Because by many people's measure (top 10%), most people in urban California are "rich."

According to the link below, Top 10% is adjusted gross income of $133,445. Top 5% is AGI of $214,462. Top 1% is AGI of $465,626

I'm getting the numbers from here (not sure if they are right but it seems in line with other numbers I've seen):

https://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/

I do agree the tax bill is designed to benefit the republican's constituencies in the sense that Urban blue state people (which includes me) are potentially getting screwed. But that is no different than most bills. - Obamacare financially rewarded "democrat voters" and taxed or increased healthcare costs for typical republican voters (yes, I'm generalizing). The same could be said for most bills.

Personally, I'd prefer a revenue neutral plan that simplified the tax structure. I would like to see spending controls, most notably entitlement reform (which apparently no one cares about anymore).

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One cannot define "rich" without qualifying where that person lives. I really can't believe I'm saying this, but living in a major city like LA, SF, Chicago, Boston, or NY where the public schools are absolute crap and real estate is insanely high. If one has children and sends them to private secular schools and plans on sending them to college, making $500K per year does not make one rich. Those of us who are W2 income earners are getting whacked by high federal and state taxes, the AMT, tuition, and property taxes. As I mentioned elsewhere, it's definitely a consumer choice to live in the city and not commute over an hour to one's job, but high income earners, and not high investment income earners are right in the middle of the crosshairs for any of these tax plans.

Is SF that bad? There are many pockets of L. A. with good public schools.

Have always thought of Chicago as pretty damn affordable, but I guess that doesn't make any sense if you don't live in CA.

calbear93 said:

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wifeisafurd said:

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OaktownBear said:

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wifeisafurd said:

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dajo9 said:

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wifeisafurd said:

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dajo9 said:

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calbear93 said:

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Income and education do not make you elitist. Thinking that the regular folks are ignorant and need to be led like little children is elitist. Yeah, I would take that bet that most working folks would know the difference between capital gain and ordinary income. Most regular folks file tax returns and own homes.

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Very few folks file any kind of sizeable capital gain on any kind of regular basis. I would love to see this polled and I would bet money you are wrong on what the average American knows about ordinary income vs. capital gain tax treatment.

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Let us test that theory about all the masses beings so dumb:

Per a April 17, 2017 NPR study (with excerpts copied):

1)Americans underestimate the share of Americans who don't pay federal income taxes

Given four choices of how many Americans pay zero or negative federal income taxes (11, 27, 45, or 63 percent), fully 70 percent of poll respondents chose the options under the correct answer, which was 45 percent. Some of these people simply have no taxable income, and others get money back as a result of refundable tax credits like the Earned Income Tax Credit. (Of course, these people might pay other taxes, like payroll taxes, as well as whatever sales and property taxes their states impose.)

2) Americans didn't appreciate that for the highest earners, the percent of federal income taxes they pay now is significantly higher than it was in 1980. How does that work? As the Tax Policy Center's Roberton Williams explained to NPR, the share of income going to the rich has climbed in a big way over the last few decades. So how Americans think about this could affect what they think should happen to the top tax rates on the richest. In 1980, the top 10 percent brought in 32 percent of all adjusted gross income, according to the Tax Foundation. In 2013, it was 46 percent. For example, many Americans also believe taxes should be raised on the richest. In contrast, a sizable majority said their taxes should be reduced, including those in the highest income tax brackets.

3) Americans also appear to have strong views on how people earn their money. We asked people to what degree they agreed with this statement: "The tax rate on income from work should be lower than the tax rate on income from wealth.

75 percent said they did, including 77 percent of Democrats, 71 percent of Republicans and 84 percent of independents. This is another result that might make the richest Americans squirm. The polling showed taxpayers understood the rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains income they get from selling investments like stocks. Most of those capital gains are taxed at a rate far below that top income tax rate. (People at any income level of course can have those kinds of investments, but capital gains are overwhelmingly concentrated at the top of the income spectrum.)

4) Americans overestimate how important income taxes are to government revenue. About half of the poll's respondents (with very little variance by party) said they believe 75 percent of the federal government's revenue comes from income taxes. In reality, it's just under half. Of all the taxes Americans pay, income tax probably requires the most thought. After all, payroll tax comes automatically out of each paycheck. Sales tax is imposed at the cash register. And so on. So maybe it makes sense that Americans think all that work they put into filling out their forms ends up doing the lion's share of funding the government.

5)On tax policy, views aren't always all that partisan. Our poll, nearly half of Democrats 45 percent agreed with the proposition that "federal income taxes should be cut for all income levels." Likewise, Republicans the party that has spoken of "makers" and "takers" were split roughly evenly on the idea that tax cuts for the wealthy lead to economic growth. (Democrats and independents tended to disagree slightly more that is, to say that tax cuts for the wealthy do not lead to that growth.)These are only two examples, but they suggest that partisan messaging in Washington on some specific issues doesn't necessarily filter down to Americans.

6)Americans agree: Taxes are too complicated (but that's no reason to cheat). My comment: that won't change with this legislation.

Hopefully, you didn't bet much.

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Nothing in that poll shows me to be wrong. The author explaining differences between capital gains and ordinary income tax treatment doesn't say anything about what the average American knows about it.

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Yes, if you ignore wording "The polling showed taxpayers understood the rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains income they get from selling investments like stocks."

According to the IRS, 53.9% of those stupid masses have a taxable gain or loss each year. Guess their stupid to know what is on their tax return. Elite on dude.

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Your last sentence is completely wrong. 53.9% of those earning $200K-$1M have a taxable gain. To the contrary "Fewer than one in seven individual taxpayers report taxable capital gains in any year. In 2006 just 13.4 million out of 138.3 million taxpayers reported taxable net gains (net long-term gains in excess of net short-term capital losses and capital gains distributions, which are taxed at favorable capital gains rates)

Quite honestly, I would argue it is pretty out of touch (one might say elitist) to think that over half of Americans have taxable capital gains each year.

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yup, I misread the number. Just so we know that everyone can make a mistake, you said the following:


"I'm sorry, but you are a sucker. Rich people do not ever pay more, least of all with this proposal. First of all, they don't give a damn about a couple percentage points on the upper tax bracket because most of their income is taxed at the much lower capital gains rate." Set forth below are the average tax rates by income levels.

How Much Do People Pay in Taxes? https://taxfoundation.org/how-much-do-people-pay-taxes/

Guess we are both elitist.

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This reminds me of a NYT article that I read about why people excuse the Patriots' cheating past. I see so much of that in how we discuss politics. https://www.nytimes.com/2017/02/05/sports/football/new-england-patriots-super-bowl-cheating.html

There was a funny video I watched where certain students, when asked to provide their opinion on the tax reform proposed by the Republicans, expressed how it was unfair, benefits the rich executives, corporations, etc. When told of specific proposals but presented it as something Bernie Sanders proposed, they praised how progressive the ideas were.

When I read things like "capital gains every year" as if you need to have capital gains every year and not just one year to understand what it is, I just shake my head. When I read that stock options are not just for the rich (i.e., most people have it and elimination of deferral of taxes on the options beyond vesting impacts unfairly the working stiff), but those same workers who get and understand options don't understand the concept of capital gain, I have to shake my head. If Sanders had proposed limiting deductions for annual compensation in excess of a million dollars to covered persons (e.g., top paid executives), most liberals would praise it. If Bernie had said it is not fair for executives to defer payment of taxes and get basically an interest free loan, most liberals would praise it. But who proposes an idea is infinitely more important than what is proposed. I hate many of the components of the tax proposals (while recognizing the absolute need for a reduction in corporate tax rate without increasing the deficit). However, my point in my earlier posts was to have people defend why they hate certain proposals. What I got was they hate the proposals because they hate rich people who were not like them but liked the rich people who were like them. But ultimately, I suspect they hate it because they hate who was proposing the reforms (i.e., the clan opposite their clan).

And it is not a liberal thing or a conservative thing. It is the same reason why sane people would excuse Trump for his behavior when they would discipline their own kids for the same behavior.

You can debate most things, but when it comes to sports, politics, etc. where you have claimed your identity to your position, logic has no role in the discussions because no one will think logically when their identity is threatened. We will twist points, twist our brains, twist our words, to keep our sense of identity secured. That is why political discussions are so fun and so stupid at the same time and so appropriate for a sports forum. No one will ever change their mind on politics or sports.

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I agree. If Sanders proposed this you'd be ripping it instead of twisting it into something acceptable. Of course Sanders would never propose this crap because it goes against everything he stands for whether or not someone can con some uninformed person by misrepresenting what it is. Maybe if those students understood capital gains tax treatment as apparently everyone does, they wouldn't fall for that

oski003 said:

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Is SF that bad? There are many pockets of L. A. with good public schools.

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In SF you do not send your kids to public schools if at all possible. Simple as that. Kinda tough in such an expensive city. Your choice, but you better have the money for a private.

OdontoBear66 said:

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oski003 said:

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Is SF that bad? There are many pockets of L. A. with good public schools.

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In SF you do not send your kids to public schools if at all possible. Simple as that. Kinda tough in such an expensive city. Your choice, but you better have the money for a private.

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That was certainly true when I was a kid, but these days the schools seem pretty highly rated, depending on your neighborhood.

sycasey said:

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OdontoBear66 said:

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oski003 said:

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Is SF that bad? There are many pockets of L. A. with good public schools.

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In SF you do not send your kids to public schools if at all possible. Simple as that. Kinda tough in such an expensive city. Your choice, but you better have the money for a private.

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That was certainly true when I was a kid, but these days the schools seem pretty highly rated, depending on your neighborhood.

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I went first thru twelfth in SF public schools. Lowell was pretty much the first choice if you weren't Catholic. I don't think Lowell has sunk that far in the 50 years since I graduated, at least no farther than Cal Engineering.

sp4149 said:

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sycasey said:

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OdontoBear66 said:

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oski003 said:

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Is SF that bad? There are many pockets of L. A. with good public schools.

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In SF you do not send your kids to public schools if at all possible. Simple as that. Kinda tough in such an expensive city. Your choice, but you better have the money for a private.

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That was certainly true when I was a kid, but these days the schools seem pretty highly rated, depending on your neighborhood.

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I went first thru twelfth in SF public schools. Lowell was pretty much the first choice if you weren't Catholic. I don't think Lowell has sunk that far in the 50 years since I graduated, at least no farther than Cal Engineering.

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Lowell was definitely still a desirable spot in my day (and what's where I went in the 90s). But outside of that the public high schools were slim pickings.

sycasey said:

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sp4149 said:

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sycasey said:

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OdontoBear66 said:

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oski003 said:

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Is SF that bad? There are many pockets of L. A. with good public schools.

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In SF you do not send your kids to public schools if at all possible. Simple as that. Kinda tough in such an expensive city. Your choice, but you better have the money for a private.

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That was certainly true when I was a kid, but these days the schools seem pretty highly rated, depending on your neighborhood.

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I went first thru twelfth in SF public schools. Lowell was pretty much the first choice if you weren't Catholic. I don't think Lowell has sunk that far in the 50 years since I graduated, at least no farther than Cal Engineering.

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Lowell was definitely still a desirable spot in my day (and what's where I went in the 90s). But outside of that the public high schools were slim pickings.

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Washington was very close to Lowell back in the 50s and 60s, but excepting them I think private is the only choice. So you get high prop taxes and get to pay tuition.

As things evolve: corporate tax delayed one year, and mortgage interest back in Senate version. Also, corps allowed to deduct all capital investments in 2018 to make up for loss of corporate tax cut. The Senate did not accept the House compromise to allow certain state and local taxes to be deducted (e.g., $10K in property taxes). Senate bill as currently constructed does not comply with Senate rules that prohibit certain legislation from adding to the deficit after 10 years (e.g., reconciliation). This could force Senate Republicans to make some of the tax cuts temporary, though those decisions have not yet been made (or made public). According to the LA Times as of 1 hour ago, no decision has been made by Senate Reps on whether to make the corporate tax cuts permanent once they take effect. There is a lot more complexity coming as the House bill has had changes, and the Senate bill is complex. For you tax nerds, as an example of complexity, the Senate bill proposes an insanely complex plan to keep corporations from gaming the territorial tax system, which I assume is aimed at companies like Apple. I hope someone else with tax background actually reads this stuff, as it is detailed, and hard to understand, so I apologize in advance for any misinterpretations.

OdontoBear66 said:

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sycasey said:

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sp4149 said:

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sycasey said:

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OdontoBear66 said:

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oski003 said:

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Is SF that bad? There are many pockets of L. A. with good public schools.

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In SF you do not send your kids to public schools if at all possible. Simple as that. Kinda tough in such an expensive city. Your choice, but you better have the money for a private.

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That was certainly true when I was a kid, but these days the schools seem pretty highly rated, depending on your neighborhood.

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I went first thru twelfth in SF public schools. Lowell was pretty much the first choice if you weren't Catholic. I don't think Lowell has sunk that far in the 50 years since I graduated, at least no farther than Cal Engineering.

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Lowell was definitely still a desirable spot in my day (and what's where I went in the 90s). But outside of that the public high schools were slim pickings.

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Washington was very close to Lowell back in the 50s and 60s, but excepting them I think private is the only choice.

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That was the way when I was in high school, but looking at it now, it seems like many of the district schools have improved.

https://www.greatschools.org/california/san-francisco/schools/?gradeLevels=h

Lincoln, Washington, and Galileo all have 8 ratings now (Lowell and SOTA still leading the pack at 10). This doesn't surprise me, given the extreme wealth and gentrification in S.F. now.

Deferred comp changes pulled by Ways and Means this morning, so that means no change to the stock option/ RSU current taxation paradigm and that Silicon Valley will survive at least that aspect of the assault. Now we'll just have to deal with adding "only" $1.5 tn to the deficit and the 62.5% effective tax rate high earners in the blue states will face.

The Senate version is a death sentence for their Republican brethren in the House. It restores elimination of all state and local deductions and postpones the corporate tax cut to 2019. But there's an election in 2018 and a large number of Republican congressmen in blue states are up for re-election. And they are going to face their angry constituents- most of whom will have their taxes raised- with nothing but a magical corporate tax cut that is coming next year. The Republicans will lose the House; if that wasn't clear Tuesday, it is now.

All of this is going away- if not now, in 2019, or in 2020. The Democrats are the big winners here and even better, they can just watch as the Republicans self- destruct and not reveal their own servitude to the same corporate interests. The great unraveling continues.

And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Personally, I don't think the process has changed that much in the last 250 years. I think it is just more visible these days (which is a good thing, IMHO).

calbear93 said:

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Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

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True dat, but personally I've never received a stock option in my life and I'm sure I never will. What I do know as an observer of the tech ecosystem is that without them the creation/destruction cycle of the Valley doesn't work. Workers need to be owners and the best and brightest need to be lured out here with the chance to strike gold. So call me crazy, but I'm not pumped about Congress doing something that would crater one of the principal growth engines for the US economy (and the growth engine for California). Oh and managing to blow a massive hole in the deficit to boot. Really didn't expect to see that combination. Well played Washington, well played.

Sebastabear said:

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calbear93 said:

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Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

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True dat, but personally I've never received a stock option in my life and I'm sure I never will. What I do know as an observer of the tech ecosystem is that without them the creation/destruction cycle of the Valley doesn't work. Workers need to be owners and the best and brightest need to be lured out here with the chance to strike gold. So call me crazy, but I'm not pumped about Congress doing something that would crater one of the principal growth engines for the US economy (and the growth engine for California). Oh and managing to blow a massive hole in the deficit to boot. Really didn't expect to see that combination. Well played Washington, well played.

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Kinda blows his theory out of the water, doesn't it.

Sebastabear said:

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calbear93 said:

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Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

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True dat, but personally I've never received a stock option in my life and I'm sure I never will. What I do know as an observer of the tech ecosystem is that without them the creation/destruction cycle of the Valley doesn't work. Workers need to be owners and the best and brightest need to be lured out here with the chance to strike gold. So call me crazy, but I'm not pumped about Congress doing something that would crater one of the principal growth engines for the US economy (and the growth engine for California). Oh and managing to blow a massive hole in the deficit to boot. Really didn't expect to see that combination. Well played Washington, well played.

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I agree with you that it is a stupid change. What is to stop a company from having the options immediately vested so that there is no tax that is payable as a result of the grant (FMV is the strike price - so no gain; of course the proxy advisory firms and institutional investors would hate that). Then, upon exercise, it will be capital gains. Of course, people here want long-term capital gain to be taxed at the same rate as ordinary income.

GMP said:

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Sebastabear said:

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calbear93 said:

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Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

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True dat, but personally I've never received a stock option in my life and I'm sure I never will. What I do know as an observer of the tech ecosystem is that without them the creation/destruction cycle of the Valley doesn't work. Workers need to be owners and the best and brightest need to be lured out here with the chance to strike gold. So call me crazy, but I'm not pumped about Congress doing something that would crater one of the principal growth engines for the US economy (and the growth engine for California). Oh and managing to blow a massive hole in the deficit to boot. Really didn't expect to see that combination. Well played Washington, well played.

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Kinda blows his theory out of the water, doesn't it.

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How? It is still his special interest, but maybe not personal interest. I love it when people try make a clever comment based on lack of understanding of the nuances. I guess people who are advocating for reduction in corporate tax rate are all really just corporations.

calbear93 said:

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Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

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What is the difference in your equation between "special interests" and having an opinion? Yes, you are correct. I have an opinion about what I want tax increases to support. Which is exactly a valid debate about the wisdom of a particular tax policy. But this is not a case where I want my taxes to go to renewable energy and not the military and another person wants his taxes to go to the military and not renewable energy. Taxes are not being raised on some people to pay for some program they may or may not like. They are being raised on some people so they can be lowered on other people. Personally, I think raising taxes on a substantial portion of the middle class to give tax breaks that almost entirely benefit the wealthiest is awful policy. I further think that designing those tax increases to predominantly hit the other political party's constituents is repugnant and unethical.

By the way, MANY economists dispute the concept that lower capital gains tax rates lead to more growth and in fact there is really no historical data that supports that proposition. Some of our biggest booms have come in times of high capital gains tax rates and some of our biggest busts have come in times of low capital gains tax rates. That concept is mostly just theory with little empirical data that supports it.

When the middle class shrinks because large portions of this class are getting richer, is this a good or bad thing?

OaktownBear said:

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calbear93 said:

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Sebastabear said:

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And the deferred comp changes were just reinserted into the Senate version so stock options are dead again (if that view prevails). Hell of a way to run a process here.

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Everyone is against special interest until it's their special interest. Everyone is OK with tax increase as long as it supports their causes, and don't want tax increases to support any other causes. After all of the push and pull from each interested party, a simple postcard return will become a book.

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What is the difference in your equation between "special interests" and having an opinion? Yes, you are correct. I have an opinion about what I want tax increases to support. Which is exactly a valid debate about the wisdom of a particular tax policy. But this is not a case where I want my taxes to go to renewable energy and not the military and another person wants his taxes to go to the military and not renewable energy. Taxes are not being raised on some people to pay for some program they may or may not like. They are being raised on some people so they can be lowered on other people. Personally, I think raising taxes on a substantial portion of the middle class to give tax breaks that almost entirely benefit the wealthiest is awful policy. I further think that designing those tax increases to predominantly hit the other political party's constituents is repugnant and unethical.

By the way, MANY economists dispute the concept that lower capital gains tax rates lead to more growth and in fact there is really no historical data that supports that proposition. Some of our biggest booms have come in times of high capital gains tax rates and some of our biggest busts have come in times of low capital gains tax rates. That concept is mostly just theory with little empirical data that supports it.

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Two different concepts. Special interest is trying to legislate to address a very targeted, special interest. Nothing wrong with it, and not the same as having an opinion. It just means that there is lobbying effort to address a specific issue or topic. My point was that no one is against special interest. They are just for their own special interest.

Also, I never said that spending component is not a valid discussion. It is just not a relevant discussion on whether income tax obligation is rightfully allocated among the different tax payers. Just as a point of reference, income tax is for general funds. It is not a special levy or excise tax meant to address specific spending. For example, excise tax on medical devices was a special use tax to help fund Obamacare. Not disagreeing with it since one could argue that incremental coverage increases demand for medical devices, but that excise tax wasn't intended to fund military. Arguing that I am OK with income tax increases only if it is tied to special use is missing the point. Debating how the budgeting should be is a different discussion than who should contribute what percentage to the general fund. I think people can conflate and confuse the two. If you want to have discussion on certain special use excise tax, then have that discussion, but it is irrelevant from the discussion on allocation of income tax obligations, when income tax revenue is meant to address general and not specific funding for the government.

And I don't know whether the current capital gain tax rates are good or bad. You did, however, make a statement that contradicts actual facts. You do realize that we are in the middle of one of the biggest and longest bull run in history, right? But forgive me if I don't take your word for it that lowering or increasing is good or bad for the economy. Let's not mask this discussion as an economic discussion when neither you nor I seem to be qualified. This discussion is a moral discussion and who you think are the evil rich people versus the good rich people. Someone who make $10 million in income as an executive is good versus someone who makes $10 million from owning the stock and selling after long-term investing and capitalizing the company. That's all it is.

burritos said:

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When the middle class shrinks because large portions of this class are getting richer, is this a good or bad thing?

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And did the middle class shrink if the size of the upper-middle class and upper class increased? Were we supposed to suppress upward mobility of the middle class? I am not saying that it did, but I don't know what you mean by that statement. It seems like an incomplete analysis.