The GOP Tax Cut and Rising Wages....or not.

[Andrew77]

A deduction doesn't save you any money since it was an expense incurred to make you money.

That's not the only issue. There's the issue of what is a fair system of paying for the burden of government, and as per this thread, did the Trump tax cuts increase wages for everyone?

The standard deduction, does not require you to spend anything.

A fair system is everyone pays an absolute flat tax of 10%. Everyone, everywhere, shoulders the same percentage cost of the burden. 10% of their income. That is the only 'fair' system in my book. No deductions, no credits, no nothing.

Everyone single person pays exactly 10% of their income.

 

[Andrew77]

Most of your money goes on government funded military. Seriously, where do you get these fantasies from? Let me guess...the Federalist or American Thinker?

2018 United States federal budget - Wikipedia

There's a link to Trump's budget. 574 B on defense, 10x higher than any other category except veterans affairs.

From your link:

Total expenditures: $4.01 Trillion.

According to your post-
DOD spending: 574 Billion.

The government is spending $4.01 Trillion total, and the DOD is $574 Billion.

Where is the remaining $3.43 Trillion go?

We are spending too much.

 

[iluvatar5150]

In a vacuum; neither.
Jobs are created when the employer/company can no longer meet the demand on production, not because they have a little extra cash lying around.

The restaurant down the street, opened up a second location in another part of town. I've talked to the owner. He did that, because he had enough profits to try it. Not because the demand was so unbelievably high, that he had to have a second location.

A local restaurant probably doesn't even pay these kinds of corporate taxes. More than likely, the company is set up as a pass-through entity, wherein the profits get taxes as part of the owner's personal income taxes.

Seriously this is very obvious. Why does Apple Computer have 8,000 people employed in Ireland? Why did Apple invest in Ireland instead of more investment into the US?

Because Ireland is a tax haven. Apple develops its products in the US, shifts the IP to its subsidiary in Ireland, and then licenses the technology back from itself, booking the profits in Ireland instead of in the US.

Why do you think so many companies are leaving California?
https://chiefexecutive.net/business-exodus-california-troubling-sanctuary-policies/

That article takes a handful of examples and tries to make a trend out of them. There probably is a lot of pressure to leave the state due to exorbitant real estate prices, but those prices are a result of high demand.

No, it's not both. Because I actually got laid off several years back, and not only did I not go into debt, but I paid off debt.

It's because smart people, save money for rainy days. This involves spending less than you make, when it's not raining.

It's not raining now, and we decided to both spend more and take a big pay cut.

 

[iluvatar5150]

The standard deduction, does not require you to spend anything.

A fair system is everyone pays an absolute flat tax of 10%. Everyone, everywhere, shoulders the same percentage cost of the burden. 10% of their income. That is the only 'fair' system in my book. No deductions, no credits, no nothing.

Everyone single person pays exactly 10% of their income.

I hope you like paying more in taxes. Because you'd be the one hurt in that scenario, not me.

Also, would you be okay with flattening out regressive taxes and fees? Payroll taxes are regressive, as are property and consumption taxes, and all the administrative fees that state and local governments like to charge in lieu of taxes.

 

[Andrew77]

I hope you like paying more in taxes. Because you'd be the one hurt in that scenario, not me.

Also, would you be okay with flattening out regressive taxes and fees? Payroll taxes are regressive, as are property and consumption taxes, and all the administrative fees that state and local governments like to charge in lieu of taxes.

You think I'm paying less than 10% now? I lose almost 20% of my check in taxes.

By taxes, I mean all taxes, meaning, all taxes.

 

[iluvatar5150]

You think I'm paying less than 10% now? I lose almost 20% of my check in taxes.

You don't pay 20% in federal income tax. You don't even pay 10% in federal income tax. Making $25,000 as a single filer, you have a -2.52% effective tax rate at the federal level.
Free Income Tax Calculator 2018 - Estimate Your Refund - NerdWallet

 

[Andrew77]

A local restaurant probably doesn't even pay these kinds of corporate taxes. More than likely, the company is set up as a pass-through entity, wherein the profits get taxes as part of the owner's personal income taxes.

Because Ireland is a tax haven. Apple develops its products in the US, shifts the IP to its subsidiary in Ireland, and then licenses the technology back from itself, booking the profits in Ireland instead of in the US.

That article takes a handful of examples and tries to make a trend out of them. There probably is a lot of pressure to leave the state due to exorbitant real estate prices, but those prices are a result of high demand.

It's not raining now, and we decided to both spend more and take a big pay cut.

A local restaurant probably doesn't even pay these kinds of corporate taxes. More than likely, the company is set up as a pass-through entity, wherein the profits get taxes as part of the owner's personal income taxes.

Irrelevant to the main point. The main point is that it is profits that allow for the expansion and growth of a business or company. There is no difference between that and any other corporation in the example. Walmart does not open a new facility in Kansas, because the demand is high in New York. The reason Walmart takes the risk of opening a new store in a new location, is because it has the money to do so.

Because Ireland is a tax haven.

Well yes, of course it is. Every place that has a lower tax, is by definition a tax haven. Ohio is a tax haven to California. In fact, my current job exists because Ohio is a tax haven. The company was based in California, and moved 100% of it's configuration operations into Ohio, and eliminated several hundred jobs in California in the process.

Apple develops its products in the US, shifts the IP to its subsidiary in Ireland, and then licenses the technology back from itself, booking the profits in Ireland instead of in the US.

While it is true that many companies do this, I don't know that Apple is doing that. Apple has thousands of workers in Ireland, that are doing production work. Doing the Intellectual Property rights scheme, doesn't explain why they would hire so many people. For example, the Panama papers showed that many subsidiaries, required only legal work done by contract companies. Often the company only need to rent some offices, and have at most a dozen guys filing paperwork. More or less a dozen people, but certainly not thousands.

None of that is required to process Intellectual Property payments.

Regardless, Intellectual Property rights is a product of socialism, and I don't agree with it at all. IP should be eliminated. The idea that you can 'own thought' is a left-wing idea, not a Free-market Capitalist idea.

There probably is a lot of pressure to leave the state due to exorbitant real estate prices, but those prices are a result of high demand.

I would disagree with that too. Real estate prices are due to taxes and regulations. There are many other places in this country that have high demand, and high density of population, and yet have a fraction of the cost.

Miami Florida, and San Francisco California, have very similar demand and density. Miami actually has higher population density. Yet San Francisco has a median housing price of $750K, and Miami is $250K. Demand doesn't explain that.

The density and demand for housing in New York is vastly higher than that of California. San Diego is a perfect example, with a population density that is a fraction of New York. Yet their housing prices are comparable. But San Diego has a population density comparable to Dallas Texas and Phioenix, and yet both of them have a housing price that is fraction as much.

Most of California's cities have a cost of housing, that is much higher than that of New York, while having a much smaller population density.

So, no it can't be explained away by demand. It is the taxes and regulations, that are driving up the prices in California.

It's not raining now, and we decided to both spend more and take a big pay cut.

Please stop lying. It is difficult to discuss a topic, when you keep lying. There is no pay cut. Corporate taxes are bring in record revenue. The tax revenue as a whole is higher than ever before. There is no cut in tax revenue, period. If you are not intellectually honest enough to admit that, then we have nothing further to discuss.

 

[Andrew77]

You don't pay 20% in federal income tax. You don't even pay 10% in federal income tax. Making $25,000 as a single filer, you have a -2.52% effective tax rate at the federal level.
Free Income Tax Calculator 2018 - Estimate Your Refund - NerdWallet

And yet I can look right at my pay stub, and see directly that I am paying 20% of my income in taxes.
And I had to write a check to the government last year.

You can claim I shouldn't have to. That doesn't change the fact I did.

 

[KCfromNC]

That is not due to allowing people to keep their own money. It comes from spending money. Stop spending money.

It is a cost, though. We can work out the details of how Trump's latest plan broke things later.

 

[KCfromNC]

BTW, my annual income is $25K.

In that case, you should really not be arguing that lower to middle class earners should bear more of a tax burden.

 

[KCfromNC]

The standard deduction, does not require you to spend anything.

A fair system is everyone pays an absolute flat tax of 10%.

Sure, but we'd have to cut spending by more than half. In rough terms, that means everything will be spent on paying down the debt. Time to shut down the military, literally, along with everything else.

Fair? That's a pointless arbitrary measure if it doesn't tell you that the country would collapse in the process of making things "fair".

 

[KCfromNC]

Where is the remaining $3.43 Trillion go?

We are spending too much.

If you don't know the answer to this question you can't possibly credibly claim we're spending too much. It is just empty rhetoric.

 

[Steve Petersen]

In the US, the rich are getting richer and the poor are getting poorer, study concludes

'Meanwhile, CEO pay has increased from about 20 times the typical worker’s pay to 271 times greater, from 1965 to 2016, according to 2017 a study by the EPI.'

 

[iluvatar5150]

A local restaurant probably doesn't even pay these kinds of corporate taxes. More than likely, the company is set up as a pass-through entity, wherein the profits get taxes as part of the owner's personal income taxes.

Irrelevant to the main point. The main point is that it is profits that allow for the expansion and growth of a business or company. There is no difference between that and any other corporation in the example. Walmart does not open a new facility in Kansas, because the demand is high in New York. The reason Walmart takes the risk of opening a new store in a new location, is because it has the money to do so.

Actually, they would probably finance it rather than pay for it from cash reserves.

Because Ireland is a tax haven.

Well yes, of course it is. Every place that has a lower tax, is by definition a tax haven. Ohio is a tax haven to California. In fact, my current job exists because Ohio is a tax haven. The company was based in California, and moved 100% of it's configuration operations into Ohio, and eliminated several hundred jobs in California in the process.

That's not what a tax haven is. A tax haven is a jurisdiction where a corporation lives on paper, while doing its actual work elsewhere. Your company may have moved to OH for the lower taxes, but it's actually doing the work in OH. If, OTOH, your company had merely moved its HQ to OH (or just set up a PO Box there) and left its operations in CA, then it would be more accurately described as a tax haven.

Apple develops its products in the US, shifts the IP to its subsidiary in Ireland, and then licenses the technology back from itself, booking the profits in Ireland instead of in the US.

While it is true that many companies do this, I don't know that Apple is doing that. Apple has thousands of workers in Ireland, that are doing production work. Doing the Intellectual Property rights scheme, doesn't explain why they would hire so many people.

AFAIK, they do some manufacturing in Ireland as well. But the value of Apple products is much less in their manufacturing and much more in the design and other IP, which is done predominantly in the US.

How Apple first landed in Ireland

There probably is a lot of pressure to leave the state due to exorbitant real estate prices, but those prices are a result of high demand.

I would disagree with that too. Real estate prices are due to taxes and regulations. There are many other places in this country that have high demand, and high density of population, and yet have a fraction of the cost.
...
So, no it can't be explained away by demand. It is the taxes and regulations, that are driving up the prices in California.

They also have a lot more supply and/or an easier time adding to the supply. Yes, regulations are a problem in California, but it's zoning regulations related to NIMBYism and folks not wanting high-density buildings popping up in their low-density neighborhoods.

It's not raining now, and we decided to both spend more and take a big pay cut.

Please stop lying. It is difficult to discuss a topic, when you keep lying. There is no pay cut. Corporate taxes are bring in record revenue. The tax revenue as a whole is higher than ever before. There is no cut in tax revenue, period. If you are not intellectually honest enough to admit that, then we have nothing further to discuss.

Calm down. I'm not lying. You're just failing to grasp the totality of the numbers.

Are gross, unadjusted revenues up from last year? Yes.

Once you adjust for inflation, are they still up? No.

That means, in real dollars, revenues went down.

To put it in terms of salary and purchasing power, let's saying that you make $10,000/yr, and widgets cost $10/ea, so for a year's worth of work, you can buy 1,000 widgets.

Let's also say that inflation is 10%, and to compensate, your boss gives you a 10% COLA. So, by year 2, you're making $11,000/yr, but each widget costs $11, so you can still only afford 1,000 widgets.

Now, let's say that, going into year 2, you decide to take off early an hour or two every Friday, reducing your work hours (and thus, your overall compensation) by 5%.

Cutting your hours by 5%, but getting a 10% COLA causes your gross pay in year 2 to be $10,450. That's a raise over the $10,000 in year 1, right? Well, no. Because those widgets are now $11/ea, you can now only afford 950 of them vs the 1,000 you could afford earlier. Your gross unadjusted wages went up, but your purchasing power (i.e. the number that really matters) went down.

NYT talks about this more here:
No, Trump’s Tax Cut Isn’t Paying for Itself (at Least Not Yet)

 

[iluvatar5150]

And yet I can look right at my pay stub, and see directly that I am paying 20% of my income in taxes.
And I had to write a check to the government last year.

You can claim I shouldn't have to. That doesn't change the fact I did.

I don't know what your tax situation looked like last year, but at least for this year, you'll have a negative tax rate. Note that that's *federal income tax*, not all taxes. For the feds, your standard deduction will be $12,000, so of that $25,000, the most you'd even be taxed on is $13,000. Of that $13,000, the first $9,525 is taxed at 10%, and the rest is taxed at 12%. Your absolute worse case is a hair over 10%, but that's before accounting for the personal exemption and whatever other breaks there are.

I make roughly 3x what you do, and between various deductions, I've been able to get my effective rate down to around 11% the last couple years. There's no way you're paying that much.

 

[Steve Petersen]

So, would a slave be capital or labor?

 

[Steve Petersen]

and what if we took away all business deductions but let them write off labor expenses?

 

[Andrew77]

I don't know what your tax situation looked like last year, but at least for this year, you'll have a negative tax rate. Note that that's *federal income tax*, not all taxes. For the feds, your standard deduction will be $12,000, so of that $25,000, the most you'd even be taxed on is $13,000. Of that $13,000, the first $9,525 is taxed at 10%, and the rest is taxed at 12%. Your absolute worse case is a hair over 10%, but that's before accounting for the personal exemption and whatever other breaks there are.

I make roughly 3x what you do, and between various deductions, I've been able to get my effective rate down to around 11% the last couple years. There's no way you're paying that much.

But all taxes, are taxes. When I say taxes, I mean taxes. As in all taxes.

You do realize that all your taxes from the federal government, go to the same place, right? You know that for example, the medicare tax, all goes to the IRS, which is then spent through to government on everything. Same is true of social security.

Every dollar that is taken from your paycheck, is given to the Federal government, and spent.

Did you ever wonder why Obama claimed that Social Security would be cut if the debt ceiling was not raised, when according to the Social Security Administration, the "Trust Fund" has several Trillion dollars?

The reason is because if the government was not able to borrow money, there was no money to pay social security. Obama was absolutely right. So what about all that money that was supposedly a surplus?

There is no surplus of social security funds. Because there are no social security funds. All money collected in taxes, goes to the Federal Government, and is spent. It is all spent. All of it.

There is no trust fund with money in it. Every dollar that is taken from your check under "Social Security Tax" and "Medicare Tax" goes to the exact same place as the money taken from your check under "Federal Income Tax". They all go to the exact same place, the Federal Government, and is spent.

A dollar take from your check, in the name of Social Security, can easily go to the military, or Medicaid, as going to pay Social Security recipients. A Dollar taken from your check in the name of Medicare, can just as easily go to repairing a bridge, or giving a junky food stamps.

All that tax money, goes to the same pot. So Social Security Tax, is just an income tax. That's all it is. And Medicare Tax, is just an income tax. That's all it is.

Equally, Social Security Benefits, are just a welfare program. Which is why if the government can't borrow to fund it, it will be cut. Just like Medicare is just a welfare program, that if the government can't borrow to pay for, it will be cut.

As far as you paying only 11% in taxes.... unless you are collecting a ton of subsidies, I don't know how you would do that.

 

[Andrew77]

So, would a slave be capital or labor?

Capitalism requires that you be able to own capital. Slavery would be the opposite of capitalism.

Owning your own labor is fundamental to capitalism. Obviously, I don't support an anti-capitalist system.

 

[Andrew77]

and what if we took away all business deductions but let them write off labor expenses?

and what if we simply eliminated separate taxes on business, and just remained with an income tax on individuals?