The alternative minimum tax started because the young and the poor were upset that wealthy people paid little or no income taxes. That anger led to the creation of the alternative minimum tax, which was designed to keep the rich from living tax-free.
Trump was the first presidential candidate to not release his tax returns in 40 years and, when two pages of his 2005 returns were leaked to Rachel Maddow on MSNBC on last month, they revealed that Trump paid $38 million in federal tax on $150 million income in 2005.
The lion’s share of this?[/url] AMT.
[url=http://www.marketwatch.com/story/read-this-to-see-if-you-owe-the-alternative-minimum-tax-2017-02-23?mod=genpf_twitter_new2&link=sfmw_tw]Trump paid $31 million in alternative minimum tax in 2005 — and now he plans to repeal it - MarketWatch
Go figure, even ZeroHedge doesn't buy the Voodoo Trump tax plan:
Quote:So, back to Vice-President Pence’s belief that tax cuts will eventually become revenue neutral due to expanded economic growth, Peter Baker via the NYT recently made the same point: “While a corporate tax rate cut of the dimension Mr. Trump envisions would reduce tax revenues by more than $2 trillion over the next 10 years, Mr. Mnuchin noted that an increase in economic growth of a little more than one percentage point would generate close to the same amount. The goal, he said, was to produce a sustained national growth rate of 3 percent, instead of the 1.8 percent now projected over the next decade.”
The problem with the claims is there is NO evidence that is the case. The increases in deficit spending to supplant weaker economic growth has been apparent with larger deficits leading to further weakness in economic growth. In fact, ever since Reagan first lowered taxes in the ’80’s both GDP growth and the deficit have only headed in one direction – lower.
Tax cuts for the rich dressed up as a middle-class tax cuts
Quote:President Trump’s tax plan, or what we know about it anyway, is a bonanza for rich people. But the administration is still insisting, against all evidence, that it’s a middle-class tax cut. "This is a middle-class tax bill," Gary Cohn, Trump's chief economic adviser, told CBS This Morning. "We're eliminating the deductions that were added to the tax legislation over the years to favor the wealthy. The wealthy have deductions. Middle-income people and lower-income people don't have deductions.”
Steve Mnuchin, the Treasury secretary, told Good Morning America the same. He refused to make any promises, but said his "No. 1 objective" is to make sure no one in the middle class pays more, and that another “objective” is making sure there are no absolute tax cuts for the wealthy. The idea that cutting deductions will make the plan better for the middle class is pure nonsense. There just aren’t enough deductions in the tax code to make Trump’s plan anything other than a giveaway to the wealthy.
Trump would hugely cut the corporate tax (a giveaway to rich shareholders). His plan slashes the top income tax rate for high earners from 39.6 percent to 35 percent. It gets rid of taxes that overwhelmingly apply to the wealthy — Obama's 3.8 percent investment surtax, the alternative minimum tax, and the estate tax. And it would set a top rate of 15 percent for the overwhelmingly rich owners of "pass-through" companies, compared with today's 39.6 percent. Mitt Romney’s tax plan in 2012 had many fewer cuts, and researchers still found it was mathematically impossible to remove enough deductions to make it not a net cut for the rich.
Read the rest of the article, which deals with Hassett's claim that corporate tax is paid by labor, so cutting it would be a large boon to labor. Yea, you read that right.
Warren Buffett argues that the rich should pay more, not less taxes, and the argument is quite clever and underappreciated:
Quote:In his 2006 book, “The Audacity of Hope,” Barack Obama quoted Buffett, who explained: “[billionaires} have this idea that it’s ‘their money’ and they deserve to keep every penny of it. What they don’t factor in is all the public investment that lets us live the way we do. Take me as an example. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into.
If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless. I can’t run very fast. I’m not particularly strong. I’d probably end up as some wild animal’s dinner. But I was lucky enough to be born into a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the financial system to let me do what I love doing—and make a lot of money doing it. The least I can do is help pay for all that.”
A single page tax plan isn't how it's done, especially when there are no sums to add up.
Quote:The single page released by the White House last week does, however, contain very similar ideas to those announced by candidate Trump. This makes it possible for us to go back to the analysis published by the Tax Policy Center in October. While we have little reason to expect a plan just like this to be enacted, that earlier analysis does help us understand how far the administration’s starting point remains from common sense on fiscal policy. Start with the effects on the fiscal deficit. According to the TPC, the plan would raise the federal deficit (even after allowing for beneficial macroeconomic effects) by a little under 3 per cent of gross domestic product for as long as it remains in place. But, according to the International Monetary Fund, the US is already running a general government structural deficit of 4 per cent of GDP, forecast to rise to just under 6 per cent of GDP in the early 2020s.
Defenders suggest, in response, that the plan might pay for itself, via increased activity. Given the low unemployment rate, this seems quite unlikely. Yet US Treasury secretary Steven Mnuchin has even suggested that, in combination with other administration policies, tax cuts could raise US trend growth to 3 per cent, from the current trend of slightly below 2 per cent. Such a rise in growth would help. But it is very unlikely, for reasons explained by Jason Furman, former chairman of the Council of Economic Advisers. For it to happen, he argues, it would be far from sufficient for the decline in labour force participation to reverse. There would also be a need for a rise in the growth of output per hour from the 1.2 per cent achieved in the last decade to 2.8 per cent. That rate of productivity growth has been extremely rare in the past, over any extended time period. It would be mad for policymakers simply to assume this will happen (See charts.)
05-12-2017, 02:46 AM (This post was last modified: 05-12-2017, 02:47 AM by stpioc.)
Quote:Trump: We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?
That statement is, of course, "We’re the highest-taxed nation in the world." Here are the latest numbers on tax burdens among affluent nations (from a column I wrote when the Organization for Economic Cooperation and Development released them in December):
Among the 35 members of the OECD -- our peer countries, more or less -- the U.S. has the fifth-lowest tax burden. That's not to say that some taxes aren't higher in the U.S. than elsewhere, or that some Americans don't pay higher taxes overall than, say, some Czechs. U.S. statutory corporate tax rates are among the highest in the world -- although the revenue they generate is, as a share of gross domestic product, below the OECD average. And U.S. personal income tax rates and revenues are relatively high -- although still far from the highest..
Quote:A pledge not to give the wealthiest Americans an absolute tax cut is coming back to haunt Treasury Secretary Steven Mnuchin.
During congressional hearings this week, Democrats pressed Mnuchin repeatedly about his late November statement that President Donald Trump’stax plan would benefit middle-class taxpayers, not the highest earners -- an assurance that some quickly labeled “the Mnuchin Rule.” In response, he stopped short of repeating the pledge -- and wouldn’t say whether Trump would refuse to sign tax legislation that would make top earners the biggest winners. Mnuchin’s go-to response: Administration officials are working on a plan that can get through Congress.
Quote:Many middle-income Americans will see their taxes go up and their home values go down under the broad outlines of the tax plan proposed by President Donald Trump last month, according to an analysis from an industry group. The study was commissioned by the National Association of Realtors and carried out by PricewaterhouseCoopers to evaluate suggested tax changes that include consolidating marginal tax brackets, doubling the standard deduction, and eliminating most itemized deductions.
No Paul Ryan, the estate tax doesn't hurt small businesses, it hurts the uber wealthy
Quote:Ryan wrote in his op-ed that small businesses make up nearly 98 percent of all employers in Wisconsin. The vast majority file federal returns as individuals, at an income tax rate up to 44.6 percent, he wrote. Via estate taxes, he contended, heirs pay taxes a second time on the same assets.
It’s not clear how many small business owners die in any given year. But assuming that they succumb at the same rate as Wisconsin’s population as a whole — 874 deaths per 100,000 people, according to the Centers for Disease Control and Prevention — that would translate into a total universe of just under 3,900 deceased small business owners whose estates might be taxed.
Now assume that all 61 estates that actually paid taxes belonged to small business owners. That’s unlikely, because some of the 61 probably accumulated their wealth another way — through stakes or executive positions in major corporations, for example. But even if our assumption were valid, it would mean that only 1.6 percent of small business owners left enough wealth to owe any federal estate tax.
