Tax Reform 2017


I am putting up some sources of information on tax reform that are recent to inform discussion and perhaps stimulate people to try and influence their legislators with my comments in parentheses. I would be interested in seeing other interesting pieces, although this could quickly become way too voluminous. (This piece form the Institute for Taxation and Economic Policy shows the distribution of income and total taxes - federal, state and local - across income quintiles. When you look at total taxes, the USA has a rather flat system - the lowest 20% of people get 3.3% of national income and pay 2.0% of total taxes, the richest 1% get 21.7% of income and pay 23.8% of taxes. This is useful to know when people go on and on about tax relief needs to go to the rich because they pay all the taxes. It just isn’t true.) (This is an analysis of the likely effects of eliminating the deduction for state income and sales tax while maintaining the property tax exemption up to $10000. Blue state punishment is one possibility.) (A short analysis of the effects on proposed changes in the estate tax. IMO the labelling of the estate tax as a ‘death’ tax and vilifying it is another great scam pulled on ordinary working class people by the plutocrats. Anyway, if giving money to poor people is so hard on their work ethic, maybe we should just say there should be an estate tax to protect the morals and work ethic of the heirs of the rich.) (The OECD is a great source of comparative data for the industrialized world on a host of topics. A talking point of the Trumpsters and the tax cutters in Congress is that corporate taxes are high. It is true that the rates in the USA are higher than lots of other countries, but when you look at tax collected the USA is actually below the OECD average. And, I don’t think any of the tax breaks or methods of tax avoidance for corporations that operate globally are being taken away.)

(Finally, the WaPo had a wonkblog section with some charts about taxation in the USA. It focuses mainly on federal taxation but does have the chart showing that the USA is at the low end of the tax spectrum compared to other industrialized countries.)

(This is an oped piece by Steven Rattner in the NYT about the carried interest provision which seems to have survived the first version of the proposed tax reform. Rattner is a rich, Wall Street person who is on the liberal spectrum and raises the issue of how Dems deal with people like that. Some people think any association with Wall Street disqualifies one as being a progressive. Myself, I think in the modern world there will be and needs to be a financial sector and we should welcome Wall Street people who embrace enlightened self-interest. P.S. - the headline writer uses the phrase ‘too bad’ differently than I do.)


Those earning less than $50,000 annually accounted for nearly two-thirds of all tax returns, but contributed only 7 percent of total revenue from individual income taxes. He wrote: “Around half of the filers in this group report zero taxable income; for those with taxable income, the average income tax rate is 12 percent.”

On the other end, filers making at least $1 million annually accounted for 0.3 percent of all returns, but contributed 27 percent of total revenue from individual income taxes. Martin noted: “Their average tax rate—31 percent—is almost triple that of filers in the lowest income bracket.”

He also noted that a group’s contribution to total revenue also depends on taxable income. For example, the group earning between $100,000 and $199,999 annually has an average tax rate of 17 percent but contribute 22 percent of revenue. This is the second-highest total amount by the groups examined, behind those earning at least $1 million.

Which paints a better picture of who pays Federal Income taxes in the US>

Could it possibly be that corporations chose to leave profits overseas and invest overseas vs. paying a 35% Federal tax on profits plus of course state income taxes?


The Joint Committee has an analysis out on it…

Basically looks like we will be borrowing another 150 billion dollars from those we could simply tax and pay them interest in perpetuity.


The only fair tax is a consumption tax - zero income tax, we keep all. Make all states have sales tax to include a percentage which goes to the feds as you make a purchase. The more you spend, the more tax you pay.


How about we cut spending like all these hero’s ran on.


And who pays the bulk of Federal Income Taxes?

How do you cut taxes for those paying nothing today??

Personally there should be no tax cut and the base should be broadened to include virtually everyone.

Everyone uses government everyone should pay for it.


Seems the Urban Institute and the Brookings Institute have done with economic modeling what their friends in the climate community have done with predicting climate change… of course the error is blamed on erroneous data… Hummm


I find it appalling that taxes are not raised on everyone. With 20 Trillion in debt we should be mirroring our friends in Europe where almost everyone pays Federal Income Tax.

The average worker not only pays 30 percent of her or his income in visible taxes, but, additionally, close to 30 percent in hidden taxes. The defenders of the punishing tax burden argue that it is needed to maintain Sweden’s generous welfare system.

Perhaps we should also match the level of property taxes in the UK:
UK residents are paying twice as much as the international average, a report by the influential think tank Policy Exchange found.
Property taxes in Britain cost the equivalent of 4.1 per cent of gross domestic product – around £70 billion — in 2011, the think tank said. The OECD average is 1.8 per cent.

After all, we certainly wouldn’t want to lower what the people actually paying for the largess of the government.

The Tax Foundation:
The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.

There’s something to be said about the tyranny of the majority.


Interesting contributions I hadn’t seen before. It would be nice to see everybody winners but that never happens. Hopefully those that really need relief the most receive it. My personal attitude about taxes generally is that I’m not bitching that my quarterly combined withholdings this year totals 70K. When I was a very young man earning 20K a year and raising two children, I really resented paying income tax, it hurt.


Republican lawmakers leveled harsh criticism at a Washington policy group study that said some middle-income taxpayers would ultimately see a tax increase under a framework for legislation that they and President Donald Trump proposed this week.

That study found that over several years, changes proposed by the GOP would result in tax increases for almost 30 percent of individuals with incomes between $50,000 and $150,000. It also said that more than half the benefits provided by the plan’s tax cuts would go to the top 1 percent of taxpayers.

But Ryan claims across the board tax cuts for ALL.


American voters say 59 - 33 percent that the Republican tax plan favors the rich at the expense of the middle class


Well let’s see.

45% of Americans pay no Federal Income tax and are pissed because they do not benefit.
Middle class Americans pay less than 10% effective tax rate. Not much to cut there. So yes they are pissed.

And yes, the top 10% paying 70% would benefit as THEY ARE carrying the water for the entire country and will benefit more as they pay most of the Federal Income Taxes.

As to corporate taxes, yes they will be allowed to bring home foreign earned profits for investment in the US or even distribution to stock/bond holders which includes the middle class.

Your polls show just how uninformed Americans really are.




Guess you want to ignore the reality.


David Mendels is the former CEO of Brightcove as well as Adobe executive. Writing on LinkedIn Mr. Mendels broke down the lie that is the GOP tax cut plan. Specifically, Mendels attacked Trump senior economic adviser Gary Cohn and Speaker Paul Ryan’s assertions that this tax cut is about helping the middle class by easing their burdens and creating wage increases across the board. The latter mythology has been spread by GOP officials for weeks.


Actually those that use it the most pay NOTHING !


Multi-millionaires are paying several MILLIONS IN TAXES and the poorest are paying NONE ! :roll_eyes:


Its funny how the left always push the robbery version of tax redistribution and then bitch when states like New York claim huge state tax deductions and complain that little Mississippi gets more in federal money as a percentage of state budget… Here I thought they liked forcing the rich guy to share…


I guess when 80% of your base pays NO TAXES you would be AGAINST any tax cuts ! :roll_eyes: