DawgTalkers.net Forums DawgTalk Everything Else... Let's talk about the budget and Tax cuts

So, we got plenty of threads about Russia. That's all fine and good, but I feel like we haven't really talked about this as much as we should be.

And that's about Trump and congress plan to cut taxes, as well as the overall budget and debt so I'll start this off with a very good article, IMO:

Investor alert: Trump’s tax cuts are looking iffy

http://finance.yahoo.com/news/investor-alert-trumps-tax-cuts-are-looking-iffy-195227458.html

A lot is riding on the tax cuts President Donald Trump has promised by the end of 2017. Stock markets have soared on the expectation of lower corporate taxes and higher after-tax earnings. Consumer confidence is up too, as ordinary Americans anticipate the middle-class tax relief Trump crowed about in his recent address to Congress.

But the path to tax cuts on Capitol Hill is narrower and riskier than upbeat investors, who have been gobbling up stocks, seem to believe. Changes in tax law always create new classes of winners and losers—and every group poised to lose under Trump’s tax reform is rapidly mounting opposition. “The odds of tax reform are always less than 50-50, and that’s true this year,” Republican economist Douglas Holtz-Eakin said at a recent conference on tax reform in Washington, DC. “We need these forces to get lined up in the White House, and that hasn’t happened yet.”

The S&P 500 stock index has risen about 11% since Trump got elected in November. It’s impossible to know exactly how much of that gain is due to tax-cut expectations. But it’s a fair bet that investors think the odds of steep tax cuts occurring this year are a lot higher than 50-50. So if Holtz-Eakin is right, overly buoyant markets are mispricing the likelihood of tax cuts, with some kind of correction due.

Trump has not yet submitted his tax plan to Congress. House Republicans, however, unveiled a tax plan last summer that is now emerging as the basis for legislation this year. And they don’t plan on just moving the furniture around. Instead, they want to boldly restructure the way businesses and consumers pay taxes. They say their plan will reduce tax dodging, give US corporations an advantage over foreign competition and substantially boost economic growth.

The same boldness could also doom the legislation, however—and this may be the part of tax reform that ebullient investors aren’t paying enough attention to. The House plan relies on a novel “border-adjustment tax,” or BAT, to revamp the way corporations pay taxes. The BAT often gets conflated with Trump’s call for “border taxes,” but these are actually two different things.

Trump’s border taxes would basically be punitive tariffs on select products or classes of products, put into place one by one to punish trading partners the Trump administration feels aren’t dealing fairly with the United States. Most economists think this kind of protectionism does more harm than good, and Trump himself may only be threatening such tariffs as a negotiation ploy.

The BAT is a much broader plan that would affect virtually all imports and exports—and fundamentally change the US tax code. The basic idea is to tax products where they’re purchased or consumed, which is how a value-added tax works in the more than 160 nations that have one. The US does not have a value-added tax, which opponents of the idea often characterize as a national sales tax.

Under the current US system, corporations are taxed based on where they’re headquartered rather than where they sell their products. That’s why some companies have “inverted” and moved their HQs to other countries, which lets them avoid paying taxes at the high US rate of 35%. It’s also why big companies like Apple (AAPL), Microsoft (MSFT) and Google parent Alphabet (GOOGL) keep billions of dollars of profits in foreign countries where tax rates are lower. The incentive to seek foreign tax shelters is one of the biggest flaws of the current system.

The BAT in the House plan would solve that, since there’d no longer be any reason for US companies to shift money out of the United States. To make it work, Washington would impose new taxes on all imports, while exports would be exempt from corporate taxes. The House plan would also cut the corporate tax rate from 35% to 20%. The new taxes on imports would be essential for offsetting revenue lost by slashing the corporate rate. And restructuring on the corporate side is necessary for reform of personal income taxes, which House Republicans also want to cut and simplify.

On the surface, the BAT would appear to harm all US companies that rely on imports, while generating a windfall for companies that export. Here’s where it gets tricky. Some economists predict that the value of the US dollar would rise by the same amount as the tariff on imports—20%, say—which means anybody purchasing imports—whether Walmart or a middle-class soccer Mom—would basically get the same deal as before. If so, the BAT would actually be an elegant way to fix perverse incentives in the current system while making the tax code much more efficient.

But there’s a catch: “We don’t have a good real-world experiment where somebody’s done something like this,” economist Rosanne Altshuler of Rutgers University said at the DC conference. And if the dollar didn’t adjust as expected, a BAT would obviously favor exporters while harming companies and consumers dependent on imports.

If the whole scheme seems too complicated to explain at a cocktail party, well, that’s the problem. “Economists are essentially convinced this will occur, and nobody else believes it,” says Howard Gleckman of the nonpartisan Tax Policy Center. A coalition of retailers, including Walmart (WMT), Kohl’s (KSS) and Best Buy (BBY) has already started campaigning against the BAT, claiming it would raise taxes on the average family by $1,700 per year. Republicans in the Senate say the BAT has no chance of passing in their chamber, and it can’t become law if it doesn’t.

This is where Trump comes in. Tax experts point out that the last time Congress passed sweeping tax reform, in 1986, the clinching factor was President Ronald Reagan’s sustained, impassioned lobbying for it. “This comes down to White House leadership,” says Holtz-Eakin. “Only the president can make the sale to the average American. Where the White House comes down on this is the crucial decision.”

Trump has already said the BAT is “too complicated,” though he left room for changing his mind. The bigger question may be whether Trump, embroiled in controversy since the day he took office, can stay focused on something as demanding and tedious as tax reform. If he can muster his considerable powers as a pitchman and persuade Americans that a tax deal built around a BAT is good for the country, Senate Republicans may have little choice but to go along. But if his attention to the matter is episodic and half-hearted, gridlock will prevail.

Without a powerful pitch from the president, the obstacles to tax reform are daunting. First, there’s Obamacare, which Republicans have vowed to repeal as their first major order of business in 2017. But there’s no plan yet for what to replace it with, and repeal-and-replace drama could dominate the legislative calendar for months, if not longer. “The slow process on ACA repeal signals that tax reform is likely to take longer than initially expected,” Goldman Sachs advised clients in a recent note. “The final tax legislation that Congress enacts is likely to be less radical than the early proposals from House Republicans and the Trump campaign.”

The slow-moving Senate already has a crowded calendar, and tax reform could simply fall off the 2017 agenda if Trump doesn’t turbocharge the pace of action. Congress could take it up in 2018, but that only gives opponents of a BAT more time to dig in and muster allies. Trump could also propose a completely different plan that doesn’t include a BAT—which would basically restart the clock on legislation Republicans have spent several years developing. That would also provoke a fight with Republican budget hawks who aren’t willing to swell the national debt for the sake of tax cuts.

If Trump has the stamina and savvy to overcome all this, then sure, tax reform is good bet for 2017, and the stock-market rally has legs. But if Trump can’t channel Reagan, the market will notice eventually. And perhaps abruptly.

_______

So, the stock market is booming in anticipation of these tax cuts and deregulation. As well all know, the market has a way of correcting itself. So while I'm happy that in the short term, my accounts are looking nice, the long term is what I'm concerned about.

So, we know he's already deregulating certain aspects of business, such as coal.

We know he wants to cut taxes, as well as corporate tax.

We also know that trump,and congress have floated the border tax idea very heavily.

We also know that they are cutting budgets if different agencies in an attempt to pay for the increase in defense spending, again.

Which doesn't include an increase in spending to our nuclear capabilities.

My concern is this: last time taxes were cut like this, which was under bush, the GDP went up, corporate profits, for a time, went up.

But we continued losing jobs by the thousands. And then the stock market tanked. Never mind the housing bubble.

Are we going to see a repeat of 07-09? Why or why not.

The sky is falling! Hurry inside liberals, before a piece of it hits you.

?? That's all you have to offer to this thread?

Yes because you repeatedly post articles from yahoo that either bash Trump or are fear mongering.

Oh dear! What if all the money gets spent to pay for free food, free clothing, free housing, free healthcare and free college!!!

Actually, yahoo is essentially a third party site. While some articles are written by yahoo staff, a lot of articles I post are from Reuters or AP or other sources, that are just posted on yahoo news site.

But that's your fault for not paying attention.

Also, I asked legitimate questions about the budget and taxes. I don't understand how that's fear mongering, but ok.

So you also have nothing to add?

Agreed.


But what's really odd is oldcold lambasted me a couple of weeks ago for posting an article from yahoo.

Regardless of the source, the agenda is the same. When you cry wolf so many times I cant take you seriously (or any liberal here) so no I dont feel like adding anything to the panic.

If he did, then I don't agree with that.

How am I crying wolf with regards to asking about taxes and the budget?

Is taxes, the budget, and the federal deficit not a concern to you? And when have I cried wolf?

Look, if you don't want to discuss the actual issues in this thread, why waste your time? If your looking for drama you're not gonna get it from me today in this thread.

You have been crying about corporate taxes being cut for a really long time. This is nothing new.

And I will agree to stop for today. I dont really have time for this either.

So you have nothing to say about that with the increase in defense spending?

Its Congress's job to balance the budget. If they dont then they are just as guilty as the previous bunch. Nobody will disagree with that.

I've literally seen you post fake news to back up your argument.

On accident. You convienently leave that part out.

Yes, it is something we should all be concerned about. No good thing lasts forever. Some will look at the consecutive job growth numbers and they act like it's never going to end. Of course it's going to end at some point. Part of that could have to do with Trump, part of it could just be the natural cycle of things...

The only thing you said that I will disagree with is this..



If you look at Bush's job numbers in the link below, his path was almost identical to Obama's until the housing collapse. The housing collapse is not an "oh by the way that happened too", the housing bubble is what started it and caused the whole domino effect to everything else.
Wiki

The worst thing that could happen to the economy right now (short term) is for Trump to not do most of what he promised... the gains from it are already being built into the market so anything less than that is going to cause some kind of an immediate correction.

Another problem will come if Congress doesn't get the Budget and Trump's other changes to his desk. If they take to fighting among themselves and things get delayed, things will go bad, bigly.

i dunno if i agree as there are conflicting reports with the jobs.

but to stay on topic, let's say thats the case and i'm in agreement.

why should i be happy about the deregulation of some of the policies put into place after the bubble burst. why should we be ok with banks being allowed to lend to people who have no business getting a mortgage, or with regards to predatory lending practices?

The title of this tax plan should be Trump's GOP Tax SNAFU.

You shouldn't be.

Any plan whether from the Right or Left, Obama or Trump is worthless if it is not making an attempt towards a balanced budget. Balancing a budget will not happen overnight, but you must make steps. We can no longer consider cuts to baseline growth as cuts. A cut is having less then you had the previous year not only getting a 4% increase over last year when you always got a baseline 7%. Eliminate unconstitutional agencies like EPA, Department of Ed, Department of Commerce, HHS etc

Now we can't cut our way to a balance so we have to find a revenue stream. End refundable tax credits. You can owe $0 in taxes and I promote that for anyone that can attain a $0 tax liability. However, once your liability is zero, Uncle Sam's tax games end for you. No more refunds on money you did not pay. Extend SS taxes to all earned income.

And as unpopular as it will sound, Military spend needs a pretty big haircut.

Have the Treasury order the stamping of a $20 Trillion dollar coin. Once finished, return it to Treasury and deposit it.

National Debt clock goes to $0

Party time begins!

quote above by teedub:

" End refundable tax credits"

Hold on one darn tootin' moment varmit.

Why should this be a problem? Republicans control the house and the senate. They should have a budget ready to send to Trump within days not weeks. What are they doing?

40 are you turning into a Democrate?

No, I just thought with no women around tomorrow a Party sounded good!

They would break off the strike to make sure we weren't having to good a time.

Nah, they would just make sure you paid double for it on Thursday.

I can tell a married man when I see one.

Job creation posts blowout month in February, ADP says

Companies added jobs at a blistering pace in February, with a notable shift away from the service-sector positions that have dominated hiring for years, according to a report Wednesday.

Employment in the private sector surged by 298,000 for the month, with goods producers adding 106,000, ADP and Moody's Analytics said. Construction jobs swelled by 66,000 and manufacturing added 32,000.

The total shattered market expectations of 190,000, according to economists surveyed by ADP. The blockbuster report also solidified market expectations for the Fed to hike interest rates next week. Probability for an increase jumped to 91 percent after the release, according to the CME.

The report encompassed the first full month under President Donald Trump, who has pledged to rebuild the nation's aging infrastructure system.

http://www.cnbc.com/2017/03/08/private-sector-jobs-february-2017-adp.html

Good start my Man!

Did you ever notice Eve, that if someone posts something negative about trump, either you or 40 jump in with your comments about how it can't be and it must be a liberal snowflake attitude etc etc.

Apparently you and some of your buddies think that every liberal doesn't work and lives off the Government, and all conservatives are hard working/god fearing productive members of society.

Worst generalizations ever.

Awesome! Very promising in this regard.

Forget about it....People like Eve hope their Obamacare insurance is eliminated so they don't have to pay their insurance premiums anymore. They'll use the emergency rooms across the country as their primary health provider once again.

Great point as usual ... there's a ton of conservative republicans on the public dole ...

More than you wish to admit. There's a lot of poverty in the south. Lots. And many of those poor are GOP. In Kentucky, W. Virginia, Mississippi, Alabama, Louisiana and many red states you'll see impoverished people who vote Republican. It's a part of our nation you may not see, but it most certainly exists.

Food for thought to all liberals and conservatives- general- Dems vs Reps= CS Lewis-"Every human being is in the process of becoming a noble being; noble beyond imagination. Or else, alas, a vile being beyond redemption. There are no ordinary people. It is immortals whom we joke with, work with, marry, snub, and exploit.” Christians- love each other.

Budget- don't know how we get out of where we are- to many freebies that general population is use to now. Cutting taxes generates more dollar exchanges in private hands which is good...but Trump wants D fixed, wall, and infr structure- how to PAY for it.

Taxes- I love two ideas which are direct opposites- want a flat tax so everyone pays same thing...Bradley, Rhodes scholar Dem wanted it 20/30 years ago- I want it but want to help poor and hit the "real rich"....poor pay less than anyone, but they pay something..flat tax except for those under poverty line--whatever- 15,000, just a number- hard because how far does that number go in NYC vs Memphis...no answer... also "special taxes"- we hose smokers for our/their health concerns...I'd hose the rich with VAT-value added tax- on luxury items- Bentley car, million dollar homes, furs, jewelry over $100,000 things the real well off wouldn't blink about, but the above average Joe would pause.

Lastly, I know for FACT none of that happens, to many people employed to stop flat tax...rich don't want to pay more because they are successful. But while on subject of what SHOULD be done- why not term limits and ending special perks for CONGRESSMEN/WOMEN...Make everyone six years the you are OUT, vote good for country NOT only your district and end Congressional retirement, perks.....serve your country, NOT yourself. PS- working on loving rotten politicians and all evil persons.....help me God.

My tax plan:
1st 60k exempt for EVERYONE (that number is negotiable)
20% for EVERYONE after that (again, might be slightly higher/lower)

No deductions. No credits.

Edit:
One more thing - any money put into a retirement fund is not taxed.

Conservative Republicans are rather rare. Lots of Republicans but that does not mean they are Conservative, but most people are ignorant of the differences and lump them into one big group.