Do you have some links to that belief? (While I haven’t seen a lot of support of the growth assumptions, I’ve missed any academics who claim this bill will push us into a recession.)
The Senate bill keeps the medical expenses deduction that the House bill eliminated. So this has to be worked out in conference.
I don’t think anyone can reliably predict what this tax bill will mean for the economy. It was only a year ago that ‘everyone’ predicted that the stock market would crash if Trump were elected.
https://www.bloomberg.com/news/articles/2017-11-28/u-s-tax-plan-emboldens-stock-bulls-as-economists-fret-on-debt This article does NOT report that economists say the bill will push the economy into recession. It does, however, say that the majority of economists who answered the particular survey were not optimistic about its effects.
US economy is currently in a long period of recovery (though also one of the weakest). Significantly longer than average length of recoveries over the past 100+ years. By historical terms, it is overdue for a recession. Correlation is easier to show than causation. If someone is so inclined though, you can conflate one with the other to push a given agenda. Happens a lot with folks in DC.
And with folks on CC as well.
@bluebayou, apologies. Should have said majority of economists say this bill will grow the debt. My bad in concluding that next reaction will be some degree of recession. I believe it, but I’m not an academic economist.https://www.washingtonpost.com/news/wonk/wp/2017/11/22/37-of-38-economists-said-the-gop-tax-plans-would-grow-the-debt-the-38th-misread-the-question/?utm_term=.7a41a9cd8267
Regarding the “overdue” recession: https://www.theatlantic.com/business/archive/2017/03/is-the-economy-overdue-for-a-recession/519180/
There is nothing about time itself that says a recession must happen.
Question for anyone/everyone, if Marco Rubio’s statements on next step being cuts to Medicare/Social Security/Medicaid in response to ballooning deficit come to pass and if continuing trends in automation of jobs continue, what will be the economic impact? ExH is a broker and has told me he is moving clients towards more international equities and bonds as US market is due for a downturn. The market surge this year has been, to some degree, an anticipation of repatriation of overseas cash, but that will be a one time only event. Can stock prices sustain as the effects of tax plan hits middle class? Asking for a friend who wants to retire in about 3 years and who might need to rebalance 403(b) and IRA:)
They ended up keeping the AMT for individuals.
I believe the House will accept the Senate version.
^ Everything is going to be sunshine and lollipops now and in the future. Merry Christmas!!!
Ack. I feel sick.
Yes, economic cycles which cannot be predicted can affect whether people win in an absolute sense. However, the intent of the bill is to greatly increase the favoritism of capital over labor in taxation, so, in relative terms, those deriving income from capital are the winners, while those deriving income from labor are the losers. Obviously, the former are mostly the plutocrat class, though some crumbs fall to those in the middle class who have saved their own capital stash or whose underfunded defined benefit pension plans become less underfunded due to better investment income than otherwise.
Is the Senate version “better” than the House version? At least it doesn’t have the grad tuition waiver tax, right?
California’s state pension plan is very underfunded because those in charge were grossly optimistic in how their investments would perform over the years. If the stock market continues its rise, then the cities and states who have to pay pension benefits that were over promised get some relief.
What always happens. Cut taxes on the rich, raise them on the poor, yell the sky is falling, economy crashes.
The economy does better when taxes on the wealthy are high and the welfare state is robust.
Sometimes soundbites matter.
I was having a rather impassioned, as you can imagine, discussion this morning trying to make the points that UCB was making. I wasn’t being heard.
When I simplified my arguments, I was heard.
I stole the line that Lewis Black, of all people, calmly used on the Colbert show last night.
“I hate this bill because it helps people who don’t need help and it hurts people who do need help.”
Good question! So far, from what I am reading I am very surprised at some of the things that are in the Senate bill, that are completely opposite to the house bill, although frustrating to not know the $threshholds. For example:
The house bill eliminated the AMT entirely. The Senate bill keeps the AMT, but raises the amount of income that is exempt from it. Wish I knew to what level, but this is exactly the “fix” required for the AMT to keep it functioning as originally intended, and prevent the highest earners from avoiding all federal taxes.
The house bill eliminated the estate tax (in a few years) but I am reading that the Senate bill is keeping the estate tax but raising the amount exempt (currently approximately $5.5 mm for individuals and $11mm for a couple). I actually find this shocking since eliminating the so-called “death tax” has been a longtime mantra. Again, I don’t know to what $ amount, but I think the threshhold could be raised to $100mm and the tax rate lowered to 25% as long as it is not eliminated entirely.
House bill eliminated medical deduction. Senate bill keeps it and lowers threshhold from 10% of agi to 7.5% of agi for 2 years.
Even the teacher supply deduction which the house eliminted, the Senate bill not only keeps it but doubles it.
Senate bill lets homeowners deduct mortgage interest on mortgages up to $1mm, while house bill stopped at $500,000.
It doesn’t look all that bad to me. I wouldn’t be at all surprised if the Senate bill is voted on as-is by the House. It might be too much trouble to try to compromise and reconcile the 2 bills. We shall see.
I feel ill too. I saw a clip of Elizabeth Warren trying to decipher the handwritten edits and it was horrible. What a really bad exercise in fiscal policy and governing this is.
@NJres --not disagreeing with your conclusions at all, but wondering how much these Senate compromises will add to the deficit. Impossible to respond as we do not know the AMT threshold or the estate tax threshold or rate.
You do have to wonder about that medical deduction threshold being lower to 7.5% for two years. Why two years? What is the magic there?
@CT1417, the stories of the harm caused will not be available until after the 2018/2020 elections.