US Politics Mega-thread - Page 9375

On December 01 2017 10:03 PhoenixVoid wrote:

I've read McCain is for the tax reform, so not so sure about it being another repeat of ACA repeal.

On December 01 2017 10:02 Gorsameth wrote:
The people who voted against the ACA repeal should vote against this bill since it does the same thing (but worse).
I don't see how it can pass.

On December 01 2017 10:03 xDaunt wrote:

Who is “we?” You responded to my post. And your presumption is correct.

On December 01 2017 09:27 TheTenthDoc wrote:
The grad student tax hike has nothing to do with FAFSA and doesn't affect any undergrad scholarships as far as I'm aware. It pretty much only hits masters and Ph D students.

What it does is make it so you have to claim tuition waived as income in graduate school, unless it comes from a very particular kind of fellowship, which means receiving approximately 8000 dollars of taxable income at a low-cost state institution and approximately 40,000 dollars at many other institutions. But you don't actually see a dime of that money, it just all pops up on your next tax bill.

Or institutions manage to play a super effective shell game or make a fancy category of tuition. Either way it's pretty gibberish policy if you want to take a strike at the increasing cost of undergraduate education, and not a great way to deal with the increasing cost of graduate education either; it seemed purely designed to extract money from a small group with limited power (both foreign and domestic students) to marginally offset the tax breaks.

On December 01 2017 10:04 xDaunt wrote:

You’re talking about the wrong problem. I’m referring to the cost of higher education, not the government deficits.

On December 01 2017 10:16 KlaCkoN wrote:

I thought that the bill simply made tuition non deductible? Which means that someone who makes 20k a year doing whatever as an undergrad would now have to pay taxes on those dollars whereas previously they could just have deducted their tuition? Obviously it matters way more to grad students since their tuition is not just waived but becomes taxable income but I didnt realize the bill itself singled out grad students.

On December 01 2017 10:07 Tachion wrote:
This tax bill is a nightmare for a lot of people from California. Really gonna fuck them over hard in more ways than one.

On December 01 2017 09:20 mozoku wrote:

First Google hit for me says it in the first paragraph

It's basic finance. Risk tolerance grows with excess. If you're rich enough to buy a yacht and not feel it, you can certainly afford to invest that yacht's worth of capital in an ultra-high risk investment and expect a higher return than you would investing the yacht's worth of capital into treasuries.

The same principle is why you have to be an accredited investor to invest in hedge funds. The government is trying to save people from their own financial stupidity.

On December 01 2017 10:24 TheTenthDoc wrote:


The best description you'll find is here, from Berkeley: https://drive.google.com/file/d/1e3oIk8AO9F_UL98z5cieKha1V5e9azzB/preview

"Qualified tuition reduction" is virtually always used in graduate education, which is why it hits graduate students harder. In the unlikely event that an undergrad has an RAship that fully pays for their education it will hit them equally hard, I suppose, with them similarly having to pay taxes on another 8K-40K of income, but scholarships and the like are the main mechanism for tuition reduction with undergrads and they are not affected by this as far as I know.

On December 01 2017 09:57 JonnyBNoHo wrote:


A rental property purchased with 100% equity would be low risk (zero chance of default).
A rental property purchased with 1% equity would be high risk (much higher chance of default).

The increase in leverage would yield a higher (expected) return to the equity holder. That would be irrelevant to economic growth, as the asset would be preforming the same in either case. Actually, the high debt scenario could be a drag on economic growth due to a debt overhang scenario. Defaults can also cause net harm.

A more normal example, say a business with 20% debt to equity financing vs 25% debt to equity... we're really just shifting the risk around. If the wealthier were 'more willing' to buy equity in the marginally-higher leverage business we're not really doing anything beyond shifting risk.

On December 01 2017 10:43 Nevuk wrote:
As a grad student who took out loans, how will this bill affect me? ( I didn't have any tuition waived or anything)

On December 01 2017 10:03 xDaunt wrote:

Who is “we?” You responded to my post. And your presumption is correct.

On December 01 2017 11:06 Nevuk wrote:
https://twitter.com/JStein_Wonkblog/status/936388909679960066 This is worth the read
https://twitter.com/JStein_Wonkblog/status/936392355728494593
https://twitter.com/JStein_Wonkblog/status/936393736774410241


(it continues on, it's not brief)


Also :
https://twitter.com/washingtonpost/status/936223764513280000

On December 01 2017 10:41 mozoku wrote:

Housing is a weird because a house isn't a means of production in the traditional sense, but the investor in the second example is behaving irrationally in a competitive market in a risk-averse world.

Let's assume the expected return for the two businesses is the same. In a risk-averse world (like ours obviously is), investors would expect a premium to invest in the riskier business as opposed to the less risky business. So instead of the return m, investors would expect return m + e. Investors with a smaller risk appetite might investment in the less risky business, but there's no financial incentive to choose the riskier business. Suppose there is a third business that returns m + e (i.e. more productive than a business than returns m), but is riskier. The smaller investor may not invest in it because it's riskier. The investor with a larger risk appetite would choose the third business over the riskier of the two businesses that return m. Consequently, the wealthy investor's risk tolerance has add an expected an additional e in value.

Assuming competitive and efficient markets with perfect information, the riskier business that returns m would never receive investment and the only factor that affects returns among rational investment opportunities is risk. Thus, higher risk investment means higher return which means higher growth.

It's basically a restatement of the CAPM, which you may be familiar with if you've studied finance.

I’m a Depression historian. The GOP tax bill is straight out of 1929.

“There are two ideas of government,” William Jennings Bryan declared in his 1896 “Cross of Gold” speech. “There are those who believe that if you will only legislate to make the well-to-do prosperous their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous their prosperity will find its way up through every class which rests upon them.”

That was more than three decades before the collapse of the economy in 1929. The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007 (when trickle-down economics, tax cuts for the hyper-rich, and deregulation again resulted in another economic collapse).

Yet the plain fact that the trickle-down approach has never worked leaves Republicans unfazed. The GOP has been singing from the Market-is-God hymnal for well over a century, telling us that deregulation, tax cuts for the rich, and the concentration of ever more wealth in the bloated accounts of the richest people will result in prosperity for the rest of us. The party is now trying to pass a scam that throws a few crumbs to the middle class (temporarily — millions of middle-class Americans will soon see a tax hike if the bill is enacted) while heaping benefits on the super-rich, multiplying the national debt and endangering the American economy.As a historian of the Great Depression, I can say: I’ve seen this show before.

In 1926, Calvin Coolidge’s treasury secretary, Andrew Mellon, one of the world’s richest men, pushed through a massive tax cut that would substantially contribute to the causes of the Great Depression. Republican Sen. George Norris of Nebraska said that Mellon himself would reap from the tax bill “a larger personal reduction [in taxes] than the aggregate of practically all the taxpayers in the state of Nebraska.” The same is true now of Donald Trump, the Koch Brothers, Sheldon Adelson and other fabulously rich people.

During the 1920s, Republicans almost literally worshiped business. “The business of America,” Coolidge proclaimed, “is business.” Coolidge also remarked that, “The man who builds a factory builds a temple,” and “the man who works there worships there.” That faith in the Market as God has been the Republican religion ever since. A few months after he became president in 1981, Ronald Reagan praised Coolidge for cutting “taxes four times” and said “we had probably the greatest growth in prosperity that we’ve ever known.” Reagan said nothing about what happened to “Coolidge Prosperity” a few months after he left office.

In 1932, in the depths of the Great Depression, Franklin D. Roosevelt called for “bold, persistent experimentation” and said: “It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.” The contrasting position of Republicans then and now is: Take the method and try it. If it fails, deny its failure and try it again. And again. And again.

When Bill Clinton proposed a modest increase in the top marginal tax rate in his 1993 budget, every Republican voted against it. Trickle-down economists proclaimed that it would lead to economic disaster. But the tax increase on the wealthy was followed by one of the greatest periods of prosperity in American history and resulted in a budget surplus. When the Republicans came back into power in 2001, the administration of George W. Bush pushed the opposite policies, which had invariably produced calamity in the past. Predictably, that happened again in 2008.

Just how disastrous would the proposed reincarnation of the failed Republican trickle-down policies of the past be for the American people and the future of the nation? A few ways:

Repealing the estate tax, or, as Republicans have dubbed it, the “death tax.” But the estate tax is not a tax on the dead; it is a tax on their heirs. Repeal would reverse an important aspect of the American Revolution and establish an American hereditary aristocracy. If your estate is not above $11 million, your benefits from this portion of the GOP’s tax cut will be a nice round number: zero.
Eliminating deductions for state and local taxes. The GOP has called these deductions favoritism for people who live in high-tax states. In fact, ending deductibility of state and local taxes would tax income that has already been taxed away from a taxpayer. It is, quite simply, double taxation.
Repealing the Alternative Minimum Tax, which assures that wealthy people who hire accountants to find all the obscure ways to avoid taxes cannot escape taxation altogether. Repealing it would save Trump millions.
Extending the “pass-through” provision to noncorporate businesses, including some 500 entities Trump owns. It would allow the owners of these businesses to pay taxes at 25 percent, instead of 39.9 percent. This provision would allow Wall Street fund managers, among other very wealthy people, to pay a lower tax rate than many middle-class Americans pay.
Ending the deductibility of large medical expenses.
Taxing waived tuition for college students, ending deductibility for student loan payments, and even disallowing teachers from deducting what they spend on school supplies for their students.
Ending the Affordable Care Act’s individual mandate, which would cause 13 million Americans to lose health insurance and result in much higher premiums for those who do get insurance through the exchanges. The Congressional Budget Office has indicated that, if enacted, the Republican tax bill may force deep cuts in Medicare through a generally unknown budget rule that its deficits would trigger.
The analysis of the nonpartisan Congressional Budget Office found that people making less than $100,000 a year (approximately 80 percent of American households) will have their taxes increased while the millionaires and billionaires will make off like bandits.

In the 1920s, Republicans were in full control of the federal government and used that power to pursue their objective to “make the well-to-do prosperous.” It didn’t “leak through on those below.” In that decade, the mass-production American economy became dependent on mass consumption. For it to work, the masses need a sufficient share of the national income to be able to consume what is being produced.

Republican policies in the ’20s instead pushed to concentrate more of the income at the top. Nine decades later, Republicans are rushing to do it again — and they are sprinting toward an economic cliff. Another round of Government of the People, by the Republicans, for the super-rich will be catastrophic. The American people must call a halt before it’s too late.