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President Trump

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sunmaster14 said:
However, for any given public purpose goal, you still want to design the tax policy to minimize the damage to the overall economy (or maximize the good, if in fact the public purpose was itself stimulating productivity growth).
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What if the "good" was a purpose such as improving the living conditions of people with mental illness? I suppose that (or anything else) might be said to stimulate productivity growth, but even if its "public purpose" was solely philanthropic, should its administrators not strive to "maximise the good" they are doing?
 
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The Don said:
If we're going with anecdotes, here's my data point.

I'm a business owner and prevailing tax rates (personal or corporate) have had absolutely no difference on how hard I've worked or how I've tried to grow the business.

Prevailing tax rates have made a difference about how much money I've taken out of the business and whether I've chosen to do it with salary, bonus or dividends but none of it has affected productivity or efficiency.
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That's what happened when marginal rates were very high. You didn't see executives with huge salaries which would mostly go to Uncle Sam. Rather, companies plowed the money back into the company.
 
sunmaster14 said:
Even worse, of course, is that you won't know what the poverty line is until after your tax year is over, so you can't even plan. Better to make a few thousand dollars less than 400% of the expected poverty line just to be safe that you won't end up paying a marginal tax rate of several hundred percent on the last thousand dollars.
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I hope you don't think folks living down near the poverty line are sitting up at 2 at the kitchen table am trying to figure how they can stay below the various cut-off levels for anti-poverty programs.
 
Michael Forbes, a quarry worker whose home sits on the opposite side of the Trump property, added a second flag — “Hillary for President” — perhaps because Mr. Trump publicly accused him of living “like a pig” and called him a “disgrace” for not selling his “disgusting” and “slumlike” home.
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Once again The Don tries to help the little guy improve his lot in life, hoping Forbes would come to his senses, sell Trump his property and start a new life living like a decent person. :rolleyes:

Imagine if it came to light the Clintons did something like this in order to expand their home in Chappaqua? Oh the absolute outrage that would ensue. Because as any critical thinker understands, if we do it it's okay, but if one of them does it...disgusting!
 
Craig B said:
What if the "good" was a purpose such as improving the living conditions of people with mental illness? I suppose that (or anything else) might be said to stimulate productivity growth, but even if its "public purpose" was solely philanthropic, should its administrators not strive to "maximise the good" they are doing?
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My point is that the "good" or the "public purpose" desired is a political decision based on values and whatnot. Tax policy is the means to keep the economy on track given the various goals for government we have decided upon. For example, if Democrats prevail, and we decide that we need a federal government that accounts for spending 40% of our GDP rather than 21%, then some sort of taxes will probably have to be hiked in order to prevent inflation. If Republicans prevail, and we decide that we need a smaller federal government that accounts for spending 10% of our GDP rather than 21%, then taxes will need to be cut in order to prevent deflation and a severe recession.

Right now, taxes are way too high for the size of government we have. Which explains why our economy is sputtering along well below capacity. Taxes are not for raising revenue. They're for maintaining the value of the dollar at a level that promotes a healthy economy running near full capacity.

It's wrong to think in terms of pay-as-you-go because so much more goes into the inflationary effects of extra spending than the absolute number of dollars added to the private sector. It's aggregate demand that matters, and that depends on aggregate savings desires as well. And it's productive capacity that matters, and that depends on investment in capital stock and other productivity gains. Matching an extra dollar of spending with an extra dollar of revenue is not just a simplistic policy. It's almost certainly non-optimal.
 
SezMe said:
I hope you don't think folks living down near the poverty line are sitting up at 2 at the kitchen table am trying to figure how they can stay below the various cut-off levels for anti-poverty programs.
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Well, I was talking about households near 400% of the poverty line. They're not poor by any reasonable measure.

Regardless, I do think poor people are well aware of the implicit taxes they face on extra income. This isn't rocket science, and the lived experience is probably more poignant for them. They might make the mistake once and find that their benefits were cut by $400 because they earned an extra $1,000 (which they also had to pay $76.50 of wage taxes on). But the next year they'll be fully cognizant of the fact that they're getting to keep on net only a part of that extra dollar they earned and will adjust accordingly (perhaps by working less, or perhaps by working in the grey market rather than at a formal job).

The implicit marginal tax rate that poor people face is a huge problem. They can be much higher than the explicit marginal tax rates that wealthy people face.
 
sunmaster14 said:
Income taxes don't work that way, so I suspect alfaniner is confused. Interestingly, Obamacare subsidies do work that way. They don't phase out as you earn more income, but instead cutoff. For example, if you make 400% of the poverty line income, you can get a subsidy worth several thousand dollars to buy health insurance on an Obamacare exchange. If you make 400% of the poverty line plus $1 you get squat. Such is the brilliant design of Obamacare. :rolleyes:

Even worse, of course, is that you won't know what the poverty line is until after your tax year is over, so you can't even plan. Better to make a few thousand dollars less than 400% of the expected poverty line just to be safe that you won't end up paying a marginal tax rate of several hundred percent on the last thousand dollars.
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It's a sliding scale, the subsidy decreases as you get closer to 400%.

ETA: Subsidies are calculated using the previous years guidelines for the Federal Poverty Level, so you know that number, but of course there is some uncertainty if you are not sure what your income will be next year.
 
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Marcus said:
It's a sliding scale, the subsidy decreases as you get closer to 400%.
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It is a sliding scale in part, but the subsidy (in the form of tax credits) is actually flat between 300% and 400% of Federal Poverty Level ("FPL"), with a dropoff to zero at 400% of FPL. See here:

300% FPL — At this amount subsidies level off. You’ll get the same amount of tax credits anywhere between 300% – 400% FPL.

400% FPL or more — You can’t get cost assistance; watch out for the “Subsidy Cliff“.
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ETA: Subsidies are calculated using the previous years guidelines for the Federal Poverty Level, so you know that number, but of course there is some uncertainty if you are not sure what your income will be next year.
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True. I had mis-remembered the specific problem I had in mind. The real problem is that you get the subsidies for the current year based on your current year's modified adjusted gross income ("MAGI") and previous years' FPL, but you estimate based on your previous year's MAGI. If you turn out to be wrong for the current year, you'll have to pay back the amount of the subsidies you received when you file your taxes next year. It's a horror show in terms of planning. Expected subsidies may tempt you into buying more health insurance than you can really afford, and then later you might find out that you aren't eligible for the subsidies you received and then have to pay them back.
 
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sunmaster14 said:
It is a sliding scale in part, but the subsidy (in the form of tax credits) is actually flat between 300% and 400% of Federal Poverty Level ("FPL"), with a dropoff to zero at 400% of FPL. See here:







True. I had mis-remembered the specific problem I had in mind. The real problem is that you get the subsidies for the current year based on your current year's modified adjusted gross income ("MAGI") and previous years' FPL, but you estimate based on your previous year's MAGI. If you turn out to be wrong for the current year, you'll have to pay back the amount of the subsidies you received when you file your taxes next year. It's a horror show in terms of planning. Expected subsidies may tempt you into buying more health insurance than you can really afford, and then later you might find out that you aren't eligible for the subsidies you received and then have to pay them back.
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I'm self-employed too, if my MAGI were in danger of going over the limit by not too great of an amount, there are ways I can defer income until 2018, by which time Obamacare may be history anyway
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Captain_Swoop said:
But it's not about Trump anymore it's a general discussion on tax.
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There's at least a dozen threads on Trump. What exactly do you expect to discuss in this thread that couldn't be discussed in the other 11+? Trump is likely to change tax policy dramatically. He is calling for a 15% corporate tax rate (down from 35%), a big cut in income taxes (to 33% from 39.6% I believe), and getting rid of Obamacare taxes (3.8% on investment income above a certain level of income) and 0.9% on wages above a certain level of wages).
 
alfaniner said:
Trump doesn't like the idea of a recount.
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Neither do I. There is no reason to believe that a recount will be more accurate than the original count. There is always error when you count millions of votes. Aside from the tiny probability the original count was wrong by enough that the election results will be overturned (I'd say about 1%), what is the probability that the recount is wrong by enough to cause civil unrest? Higher probably.

This was the main problem I had with Al Gore's recount effort (and I was basically neutral between Gore and Bush at that time - I voted for Harry Browne and was nowhere near as Republican back then as I am now). Gore's strategy seemed to be to recount ballots until he got a result he liked, and then he would stop. There was no reason to think the final count was the most accurate. There is systematic error (which should be carefully expunged), and there is random error (which really can't be expunged). The election in Florida was close enough that random error might conceivably be large enough to overturn the outcome.
 
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