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That's creating a strong voting base.

(11-01-2017, 02:28 PM)MalabarJag Wrote: [ -> ]

(11-01-2017, 06:28 AM)The Real Marty Wrote: [ -> ]What do you guys think about the idea of cutting way back on the deductibility of 401k contributions?  

The government giveth with one hand and taketh back with the other.

Roth IRAs are non-deductible. The tax is collected up front, and then there's no tax on them when it comes time to spend them. So if the money spent on traditional 401-Ks are taxed, people would choose Roth IRAs. That helps the government's bottom line now, but it loses revenue in the future.

That's assuming the government doesn't turn around and change the law sometime down the road so that Roth IRAs can be taxed. Frankly, I don't trust them.

In either case, taxing 401-K contributions would result in less money set aside for retirement. That's incentivising a bad choice.

I have always done Roth deferred 401K's at my past 2 jobs. That means that everything YOU put in is pre-taxed like a Roth IRA, but your companies match isn't. Typically when I have left a job with this type of 401K and liquidate the account, you get 2 separate checks for roth and non-roth.

In any case, the benefit of a 401K over an IRA is the employer match. Hope that doesn't go away.

(11-01-2017, 03:00 PM)StroudCrowd1 Wrote: [ -> ]

(11-01-2017, 02:28 PM)MalabarJag Wrote: [ -> ]Roth IRAs are non-deductible. The tax is collected up front, and then there's no tax on them when it comes time to spend them. So if the money spent on traditional 401-Ks are taxed, people would choose Roth IRAs. That helps the government's bottom line now, but it loses revenue in the future.

That's assuming the government doesn't turn around and change the law sometime down the road so that Roth IRAs can be taxed. Frankly, I don't trust them.

In either case, taxing 401-K contributions would result in less money set aside for retirement. That's incentivising a bad choice.

I have always done Roth deferred 401K's at my past 2 jobs. That means that everything YOU put in is pre-taxed like a Roth IRA, but your companies match isn't. Typically when I have left a job with this type of 401K and liquidate the account, you get 2 separate checks for roth and non-roth.

In any case, the benefit of a 401K over an IRA is the employer match. Hope that doesn't go away.

That's a matter for your company, not the government.  I have in the past taken the 401k offering from employers only if they matched my contributions.  My last employer as well as my current one offer a 401k, but no matching.  I stayed away from both plans since my investment options were limited.

Instead, I have both a Roth and a Traditional IRA that I contribute to and manage myself.  My retirement nest egg has grown more significantly than it would have had I stuck with employer-sponsored 401k's.

(11-01-2017, 09:53 PM)jagibelieve Wrote: [ -> ]That's a matter for your company, not the government.  I have in the past taken the 401k offering from employers only if they matched my contributions.  My last employer as well as my current one offer a 401k, but no matching.  I stayed away from both plans since my investment options were limited.

Instead, I have both a Roth and a Traditional IRA that I contribute to and manage myself.  My retirement nest egg has grown more significantly than it would have had I stuck with employer-sponsored 401k's.

I totally agree with that philosophy.  Why contribute $$ to 401k if the Company doesn't match.  Luckily I've been pretty fortunate regarding matching although it has gone down in the past 20 years.  My my current company matches 3% plus they kick in another 3% at the end of the year (which is a decent perk)

Quote:“House Republicans, seeking the biggest transformation of the U.S. tax code in more than 30 years, aim to permanently chop the corporate tax rate from 35% to 20%, compress the number of individual income tax brackets, and repeal the taxes paid by large estates starting in 2024, according to a detailed summary of the plan reviewed by The Wall Street Journal.

To partly offset that lost revenue, Republicans plan to curtail the deductions individuals take for state and local tax payments and the ones businesses get for the interest they pay on debt. But the plan being released Thursday morning stops short of touching other popular tax breaks that were being considered for change, such as the ability of individuals to park up to $18,000 a year in pretax funds into 401(k) savings accounts.

The plan, named the Tax Cuts and Jobs Act, calls for leaving the top individual tax rate at 39.6%, but pushing the income threshold for that rate to $1 million for married couples. The House Ways and Means Committee plans to consider the bill next week with the aim of turning it into law by Christmas and having most of it take effect in 2018.”

https://www.wsj.com/articles/republicans...1509629510

I think the one thing that we can learn from this debate on taxes is that this country has a massive spending problem that we are going to have to deal with sooner or later. In the meantime, we are stuck with this lowering rates while eliminating deductions shell game.

I believe in supply side tax cuts. I don't think that's what this bill is. When Mitt Romney ran for president he gave an t.v. interview right before his plane took off for the next campaign stop. In that interview he talked about the virtues of "revenue neutral tax reform." He wanted to assure the American people that he wasn't REALLY lowering anyone's taxes. He was just making the code simpler but everyone would pay just about the same. His Vp at the time? Paul Ryan. Doubling Deductions, but eliminating exemption. Lowering rates but taxing interest on student loans and medical expenses. Lower corporate taxes but now a GLOBAL minimum profits tax and taxing business interest.

Don't get me wrong, this is still a lot better than the debacle that we would have had with Shrillary, but I am not really all that enthused. It's not about me personally. I think I will probably wind up about the same next year. The problem I have is that a lot of people that I talk to who hate Trump express a lot of open mindedness when we talk about tax cuts, but I am afraid that for the most part this isn't really going to be a tax cut for people. Anyone who itemizes in a state with an income tax is going to pay higher. I just don't see how the math is going to work.

(11-02-2017, 05:10 PM)jj82284 Wrote: [ -> ]I think the one thing that we can learn from this debate on taxes is that this country has a massive spending problem that we are going to have to deal with sooner or later.  In the meantime, we are stuck with this lowering rates while eliminating deductions shell game.  

I believe in supply side tax cuts.  I don't think that's what this bill is.  When Mitt Romney ran for president he gave an t.v. interview right before his plane took off for the next campaign stop.  In that interview he talked about the virtues of "revenue neutral tax reform."  He wanted to assure the American people that he wasn't REALLY lowering anyone's taxes.  He was just making the code simpler but everyone would pay just about the same.  His Vp at the time?  Paul Ryan.  Doubling Deductions, but eliminating exemption.  Lowering rates but taxing interest on student loans and medical expenses.  Lower corporate taxes but now a GLOBAL minimum profits tax and taxing business interest.  

Don't get me wrong, this is still a lot better than the debacle that we would have had with Shrillary, but I am not really all that enthused.  It's not about me personally.  I think I will probably wind up about the same next year.  The problem I have is that a lot of people that I talk to who hate Trump express a lot of open mindedness when we talk about tax cuts, but I am afraid that for the most part this isn't really going to be a tax cut for people.  Anyone who itemizes in a state with an income tax is going to pay higher.  I just don't see how the math is going to work.

The Laffer curve is real. There is a point where, if you lower taxes, you end up with more revenue. The problem is that we are on the left side of the curve, where any further tax decrease will decrease revenue. So supply side income tax cuts will increase the annual deficit. However, there is still room to gain with corporate tax cuts. That's the big supply side plus in this plan.

Only 30% of households itemize, and with the standard deduction doubling (I didn't see that in the blurb, but it was touted by Trump) a lot of people will benefit by just switching to the standard deduction. Yes, there are always winners and losers when a revenue neutral simplification is applied. In this case people who itemize and pay lots of state income tax will pay more. I think the Republican party sees most of them as Hillary voters living in Blue States. For example, many of the California Republicans have already fled the state.

(11-02-2017, 07:09 PM)MalabarJag Wrote: [ -> ]

(11-02-2017, 05:10 PM)jj82284 Wrote: [ -> ]I think the one thing that we can learn from this debate on taxes is that this country has a massive spending problem that we are going to have to deal with sooner or later.  In the meantime, we are stuck with this lowering rates while eliminating deductions shell game.  

I believe in supply side tax cuts.  I don't think that's what this bill is.  When Mitt Romney ran for president he gave an t.v. interview right before his plane took off for the next campaign stop.  In that interview he talked about the virtues of "revenue neutral tax reform."  He wanted to assure the American people that he wasn't REALLY lowering anyone's taxes.  He was just making the code simpler but everyone would pay just about the same.  His Vp at the time?  Paul Ryan.  Doubling Deductions, but eliminating exemption.  Lowering rates but taxing interest on student loans and medical expenses.  Lower corporate taxes but now a GLOBAL minimum profits tax and taxing business interest.  

Don't get me wrong, this is still a lot better than the debacle that we would have had with Shrillary, but I am not really all that enthused.  It's not about me personally.  I think I will probably wind up about the same next year.  The problem I have is that a lot of people that I talk to who hate Trump express a lot of open mindedness when we talk about tax cuts, but I am afraid that for the most part this isn't really going to be a tax cut for people.  Anyone who itemizes in a state with an income tax is going to pay higher.  I just don't see how the math is going to work.

The Laffer curve is real. There is a point where, if you lower taxes, you end up with more revenue. The problem is that we are on the left side of the curve, where any further tax decrease will decrease revenue. So supply side income tax cuts will increase the annual deficit. However, there is still room to gain with corporate tax cuts. That's the big supply side plus in this plan.

With respect, that doesn't make a lot of sense.  If memory serves, on the laugher curve the x-axis represents the marginal tax rate.  The marginal corporate tax rate and the individual tax rate are the same under current law, thus we are on the same side of the curve either right or left.  Plus, we are going to 20% on the corporate side, dramatically increasing the deductions they can take for purchasing equipment Etc. Etc. Etc.  

Now don't get me wrong.  I think that the purpose of tax policy should be to maximize economic growth, not revenues to the treasury.  That's why I started by saying that we have  a spending problem.  But under the current proposal there is a much greater risk that the reform to the corporate tax rate will be revenue negative than whats being done on the individual side.  

Only 30% of households itemize, and with the standard deduction doubling (I didn't see that in the blurb, but it was touted by Trump) a lot of people will benefit by just switching to the standard deduction. Yes, there are always winners and losers when a revenue neutral simplification is applied. In this case people who itemize and pay lots of state income tax will pay more. I think the Republican party sees most of them as Hillary voters living in Blue States. For example, many of the California Republicans have already fled the state.

Yes, the standard deduction will double, but the individual exemption will be abolished.  Son on balance, that really doesn't mean anything.  That's just a way of insulating a lot of people from realizing the amount of money that will be soaked from the income earners and job creators that do itemize.  And for families with more than one child MORE of their income will be subject to taxation under this plan than current law.  

Now we find out that there is a 46% bubble tax in the law.  The FORMULA to determine pass through income designates 70% of that income as wages.  When you do the math, it's really only a 4% decrease in the marginal rate for small business owners.  I'm all for across the board tax cuts, but when you tell me that you are going to increase the base of taxation on small business owners and the "cut" in the marginal rate is really just a teaser rate that only amounts to a bout 4% then I wonder why the @#$^& you went to congress.  

Carly Fiorina was the only one who actually talked about the problem.  The annual budget automatically increases 8% (baseline budgeting.)  If we don't get rid of that and actually target revenue negative tax policy (intentionally leaving more money in the economy) then not only are we not going to sustain economic growth but we are going to loose our brand of low taxes and individual freedom that is already under attack.  If that happens then there is no way that we can out Santa the Democrats and we will wind up like the rest of the social democracies.

(11-05-2017, 08:52 AM)jj82284 Wrote: [ -> ]

(11-02-2017, 07:09 PM)MalabarJag Wrote: [ -> ]The Laffer curve is real. There is a point where, if you lower taxes, you end up with more revenue. The problem is that we are on the left side of the curve, where any further tax decrease will decrease revenue. So supply side income tax cuts will increase the annual deficit. However, there is still room to gain with corporate tax cuts. That's the big supply side plus in this plan.

With respect, that doesn't make a lot of sense.  If memory serves, on the laugher curve the x-axis represents the marginal tax rate.  The marginal corporate tax rate and the individual tax rate are the same under current law, thus we are on the same side of the curve either right or left.  Plus, we are going to 20% on the corporate side, dramatically increasing the deductions they can take for purchasing equipment Etc. Etc. Etc.  

Now don't get me wrong.  I think that the purpose of tax policy should be to maximize economic growth, not revenues to the treasury.  That's why I started by saying that we have  a spending problem.  But under the current proposal there is a much greater risk that the reform to the corporate tax rate will be revenue negative than whats being done on the individual side.  

Only 30% of households itemize, and with the standard deduction doubling (I didn't see that in the blurb, but it was touted by Trump) a lot of people will benefit by just switching to the standard deduction. Yes, there are always winners and losers when a revenue neutral simplification is applied. In this case people who itemize and pay lots of state income tax will pay more. I think the Republican party sees most of them as Hillary voters living in Blue States. For example, many of the California Republicans have already fled the state.

Yes, the standard deduction will double, but the individual exemption will be abolished.  Son on balance, that really doesn't mean anything.  That's just a way of insulating a lot of people from realizing the amount of money that will be soaked from the income earners and job creators that do itemize.  And for families with more than one child MORE of their income will be subject to taxation under this plan than current law.  

Now we find out that there is a 46% bubble tax in the law.  The FORMULA to determine pass through income designates 70% of that income as wages.  When you do the math, it's really only a 4% decrease in the marginal rate for small business owners.  I'm all for across the board tax cuts, but when you tell me that you are going to increase the base of taxation on small business owners and the "cut" in the marginal rate is really just a teaser rate that only amounts to a bout 4% then I wonder why the @#$^& you went to congress.  

Carly Fiorina was the only one who actually talked about the problem.  The annual budget automatically increases 8% (baseline budgeting.)  If we don't get rid of that and actually target revenue negative tax policy (intentionally leaving more money in the economy) then not only are we not going to sustain economic growth but we are going to loose our brand of low taxes and individual freedom that is already under attack.  If that happens then there is no way that we can out Santa the Democrats and we will wind up like the rest of the social democracies.

le gouvernement est l'économie - Dummycrat XIV