You can’t cut taxes on people that don’t pay taxes. Remember, 42% of households are paying zero income taxes. You can’t lower their taxes. Top 1% are paying about 37% of the taxes. The top 20% are paying 87% of the taxes.
To me, it’s a huge win in terms of simplification and ending the use of the tax code to influence behavior and economic outcomes.
RE investors should be cheering this. You can create a LLC and only pay 15% tax rate. You can still deduct business expenses which interest, property tax, etc are. Being a landlord just became a whole lot more profitable. Plus, it’s reducing the incentive to be a home owner. You should have even more renters.
Now if they could get serious about cutting government spending then we’d really have something.
Actually we shouldn’t. A healthy society needs to provide for mobility between economic classes and a general fairness in the system. A regressive tax system that stacks the deck and creates calcification of class boundaries will ultimately cause society to disintegrate. This is one more step on the way to the next gilded age.
This tax system is also picking it’s winners (people who live of capital gains and dividends) and losers (W2 wage earners). If you want a simple tax system, then why not adopt a progressive tax system with no deductions and treats all sources of income equally and which also applies the same progressive tax at inheritance.
the above is your fair system ;). 1 long sentence or 3 bullets to describe a relative fair but simple tax system that does not pick winners or losers
May we should have a poll.
I am against border adjustment but is for no state income and state property tax deduction, and higher individual deduction.
@BA_lurker All it changes about capital gains is repealing the Obamcare adder. Capital gains is 20%. How will that compare to average effective tax rates? I don’t understand how the tax plan limits economic mobility. If anything, it encourages people to be an entrepreneur because of the 15% tax rate. Entrepreneurship is the backbone of our economy and responsible for most of our job growth. It’s about time we encourage it instead of punish it.
If you dream is a progressive system with increasing rates and no deductions, then this is FAR closer to that then the current system. I don’t get why you’d complain. Why do we need inheritance tax? All that money was taxed when it was earned as income. If it’s earning gains each year, then there are taxes paid on those gains. Inheritance taxes are straight up asset confiscation.
The best way to encourage people starting business is divorcing health insurance from work, aka Obamacare.
Also all business needs workers to grow. We can’t all be entrepreneurs, just like we can’t all be engineers or CEO’s. Fact is vast majority of people are either incapable or unwilling to be their own boss. Maybe they can’t tolerate the ups and downs of owning their P&L? Maybe they don’t want the time commitment? There are a million reasons.
Do not forget the long term benefit of low corporate tax. I have pointed this many times !
Trump is bringing US corporate tax from top 3 in the world down to less than average corporate tax across the world.
This attracts world multi-millionaires and Billionaires to invest or start companies in USA and keep their money in USA as US becomes tax haven state across the world !
The main reason for many corporations, such as Amazon, Google, Facebook, Netflix and Apple, keeping money in Euro-states is to avoid US high corporate tax.
This massive corporate tax cut is a major deal breaker for world wide corporations. All those companies bring their money back to USA, they need to invest more to grow.
If corp tax is reduced to 15%, it is a major change for US future economy !
The White House insists that economic growth will cover the cost, which could be as high as $7 trillion over a decade.
That’s part of the point. All those loopholes are designed by lobbyists to influence economic outcomes. Do you want an economy designed by lobbyists?
Also, I don’t get how the tax plan is bad for the average worker. Close to 90% of households aren’t itemizing more than $24k of deductions. Now they’ll get the standard $24k. It’s really a win for any household making under $200k/yr which is the vast,vast majority of W-2 households.
No companies (not american companies alone) in the world pay the advertised rate !
Doubling standard deduction is the big change across the US tax payers. However, media is down playing this big benefit. This gives $1000/month for a family which is a big help forever until someone changes it. It is a great relief esp for low income (less than 80k or debt high ) tax payer in USA.
I don’t know, but I have a very good imagination. I kind of have a dream where Twhitler becomes the guy he said he would be, not the bullshitter of today. I see him taking down the depreciation and all those tricks, 1031 exchange and any other perks for real estate investors gone. He wants the money in his hands as of yesterday to build up that armada of his.
I see myself thinking that it will put us you the landlords, we the homeowners and the renters in the same ship. We all get the same perks, and as somebody said, there would be no picking winners here. We are treated equal. Like everybody else is treated in other countries.
If real estate is changed from personal holding to company holding (LLC) that is benefited by latest tax plan, the REITs should get the similar benefit.
That is why I made the first question, why REITs are not going up.
