Financial News

[Balta1701]

Anyway this is DOA in senate. Fun suicide mission by Ryan though.

I'm not 100% sure it is. I saw this morning a possibility of an 8 year lapse on the corporate tax cut part to make sure that it fits reconciliation rules, which would require only 51 votes. They'd lose the "Giving businesses stability" line, but that was BS anyway. This one doesn't have clear stories of "You will kill me if you vote for this" like the last one did.

[Dam8610]

Anyway this is DOA in senate. Fun suicide mission by Ryan though.

 

What makes you so confident of that? I hope you're right, but they have 52 Republicans in the Senate and only need 50 votes.

[StrangeSox]

There are enough parts of it with opposition already clearly stated in the Senate that it doesn't have 50 votes as-is. I'm sure will see the same wild ride we did with healthcare though, including attempts to pass a bad bill nobody wants in order to get it to reconciliation conference.

 

The plan also eliminates the Alternative Minimum Tax. In 2005, the one year we have for Trump's taxes, this would have saved him $31M.

Edited November 2, 2017 by StrangeSox

[bmags]

I'm not 100% sure it is. I saw this morning a possibility of an 8 year lapse on the corporate tax cut part to make sure that it fits reconciliation rules, which would require only 51 votes. They'd lose the "Giving businesses stability" line, but that was BS anyway. This one doesn't have clear stories of "You will kill me if you vote for this" like the last one did.

 

These pay-fors will not last in senate. A tax cut bill can pass the senate.

[bmags]

What makes you so confident of that? I hope you're right, but they have 52 Republicans in the Senate and only need 50 votes.

 

Some people believe the third rail of american politics is medicare, I think it's the mortgage income tax deduction.

 

If this bill were to pass though, I'd buy every luxury stock there is. It's just a big give away to generational wealth.

[StrangeSox]

Who knows if it even makes it out of the House. They wrote the bill largely in secret again and didn't consult their caucus for the input or opinions on various provisions. R's from states with relatively high property taxes and state income taxes (IL, CA, NJ, NY) have strong reasons to object to this bill since it basically deliberately harms blue states.

 

They'll get something passed at some point, and it'll largely be bad, but I'd be shocked if it's by Christmas and anything close to what this bill is.

[Balta1701]

These pay-fors will not last in senate. A tax cut bill can pass the senate.

 

 

Who knows if it even makes it out of the House. They wrote the bill largely in secret again and didn't consult their caucus for the input or opinions on various provisions. R's from states with relatively high property taxes and state income taxes (IL, CA, NJ, NY) have strong reasons to object to this bill since it basically deliberately harms blue states.

 

They'll get something passed at some point, and it'll largely be bad, but I'd be shocked if it's by Christmas and anything close to what this bill is.

If I had to guess, I'd say that the state and local tax deduction cuts are at bigger risk in the House than the Senate for exactly what was written here. Those states don't have Republican Senators, but there's several dozen Republican congresspeople from the rural or white suburban parts of those states who I'd be happy to run against with that. You've literally got the state pride thing "Peter King voted to raise taxes on New York to cut taxes on Texas!". Even the Ed Gillespie level racist campaign won't compete with that.

[StrangeSox]

King and Zeldin from NY are already coming out as No's on this over the SALT rollbacks along with LoBiondo from NJ.

Edited November 2, 2017 by StrangeSox

[Balta1701]

King and Zeldin from NY are already coming out as No's on this over the SALT rollbacks along with LoBiondo from NJ.

The guys from the New York suburbs also have to worry about the Mortgage deduction drop. $500k in a suburb of New York is actually going to hit a lot of their constituents. A lot of California counties also.

[StrangeSox]

NFIB comes out against it, and Realtors and homebuilders hate the plan as well.

 

Keeps the carried interest loophole so Wall Street is happy with it.

[Dick Allen]

Believe me.

 

“Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households,” Trump said. “Not the wealthy and well-connected. They can call me all they want; I’m doing the right thing.”

 

He then added: “And it’s not good for me, believe me.”

 

I'm thinking Maury would say, "That was a lie."

 

 

The people who worked on the tax plan are getting the biggest benefit. Go figure.

Edited November 2, 2017 by Dick Allen

[caulfield12]

America really needs $11 million and $22 million (couples) exemptions for the estate tax when only 0.2% are covered in the first place.

 

It’s not like we didn’t have 3% GDP growth despite 3 major hurricanes the last quarter.

 

Have a feeling the personal affects of AMT on Trump will be the story....along with cuts to mortgage numbers, SALT for blue vs. red states, business/pass through loopholes for rich individuals and “family businesses/small farms” that always turn out to be the exception and not the rule in reality.

 

Sen. Ron Johnson, R-Wis., said he was unhappy with how the bill treats pass-through business rates, where some business owners can categorize 70 percent of their revenue as personal wages and the other 30 percent as business income that is taxed at 25 percent. The change is meant to prevent wealthy people from avoiding income tax by only paying the new, lowered 25 percent corporate rate. “The issue with the pass-throughs has got to be fixed, it’s not acceptable,” Johnson said.

 

It’s like no matter how bad the DNC wants to shoot themselves in the foot, the GOP will come along and outdo them...they don’t even have to actively try to obstruct the Trump agenda.

Edited November 2, 2017 by caulfield12

[StrangeSox]

Initial polls for the CUT CUT CUT ACT aren't as bad as the ACA repeal bills, but it's still a pretty unpopular proposal.

 

http://abcnews.go.com/Politics/60-percent-...al_twitter_abcn

https://twitter.com/kylegriffin1/status/926412717434564608

[bmags]

This labor market is absolutely bizarre

[Balta1701]

This labor market is absolutely bizarre

How so? It seems pretty straightforward to me - solid growth, as has been the case for years, but enough people still on the sidelines due to the disaster that was 2008 that it limits inflation. Throw in a mix of a whole lot of people on opiods, an aging population, a whole lot of business owners too dumb to realize that you can't get people with masters degrees for $12 an hour with no benefits if the economy is roughly normal, and an executive branch at war with immigration as a concept, and you've got basically everything I spot today.

[StrangeSox]

One thing that's not being covered too much in the tax plan from what I've seen is that while they are doubling the standard deduction, they're eliminating the personal exemption. This means the changes are more or less a wash when you combine those two, and you lose out if you're currently taking SALT, student loan, medical, or mortgage deductions.

[Dam8610]

One thing that's not being covered too much in the tax plan from what I've seen is that while they are doubling the standard deduction, they're eliminating the personal exemption. This means the changes are more or less a wash when you combine those two, and you lose out if you're currently taking SALT, student loan, medical, or mortgage deductions.

 

A family of 4 under that plan has more taxable income. Now, that's supposed to be offset by the new tax credit for each family member, but that credit has to sunset in 5 years for it to work within their framework.

 

[bmags]

Cool story.

 

We have expectations set from chain restaurant after chain restaurant and retail after retail with huge jumps in labor costs, 5-8% growth. Construction can't find enough workers.

 

And wage growth is flat, again.

 

Participation rate dips after a few months of growth due to corps buying out their older talent expecting rising wage growth.

 

Manufacturing productivity is low despite all the automation talk. It's either at the beginning of a surge or the 36th month of a hot increase in wages that continues not to come.

[Balta1701]

A family of 4 under that plan has more taxable income. Now, that's supposed to be offset by the new tax credit for each family member, but that credit has to sunset in 5 years for it to work within their framework.

Isn't there also a "Child tax credit" that they're getting rid of that would matter in the family of 4 case?

[StrangeSox]

Isn't there also a "Child tax credit" that they're getting rid of that would matter in the family of 4 case?

 

They're actually increasing it by a couple hundred bucks and raising the income phase-out limit on that one.

[bmags]

One thing that's not being covered too much in the tax plan from what I've seen is that while they are doubling the standard deduction, they're eliminating the personal exemption. This means the changes are more or less a wash when you combine those two, and you lose out if you're currently taking SALT, student loan, medical, or mortgage deductions.

 

Exactly:

http://www.businessinsider.com/trump-tax-p...eduction-2017-9

[illinilaw08]

One thing that's not being covered too much in the tax plan from what I've seen is that while they are doubling the standard deduction, they're eliminating the personal exemption. This means the changes are more or less a wash when you combine those two, and you lose out if you're currently taking SALT, student loan, medical, or mortgage deductions.

 

This is the thing that needs to be shouted from the rooftops. For my wife and I, we'd be losing over $7,000 in deductions under the new plan - not because deductions are being cut (we'd lose a little bit on the loss of student loan interest, but that's all) - but because the personal exemption is being cut. For married couples, this is a loss if you itemized more than $15,900.

[StrangeSox]

If you strip out the AMT repeal (AMT only hits upper middle class and wealthy households, so this repeal would only benefit them), the tax plan is actually a net tax increase

 

That's how bad this thing is.

[Balta1701]

This would also be a gigantic tax increase (10-20% of total income increase) on every graduate student in the country. Huge cost to higher education.

[StrangeSox]

Tax Policy Center is out with their initial review of the Republicans' plan

http://www.taxpolicycenter.org/sites/defau...nd-jobs-act.pdf

 

 

 

In 2027, the overall average tax cut would be smaller than in 2018, reducing taxes by $700 on average or 0.7

percent of after-tax income (table 2). Taxpayers in the bottom two quintiles of the income distribution (those

making less than about $55,000) would see little change in their taxes, with average tax increases of $10–$20.

Taxpayers in the middle of the income distribution would see a net tax cut on average and see their after-tax

incomes increase by 0.4 percent. Taxpayers in the top 1 percent would receive nearly 50 percent of the total

benefit; their after-tax income would increase by 2.2 percent on average.