House Democrats announce plans to end Trump's tax giveaway by raising taxes on corporations

[LetMyPeopleVote]

This is a great move and is a strong opening in the negotiation process

Link to tweet

[MichMan]

1. I got a big tax cut when they expanded the standard deduction as a part of that legislation

As a recent retiree, that being repealed would cause my taxes to go up substantually as we have not itemized for many years. So no, I don't want to see them all repealed

I get the appeal of raising them, but aren't corporate taxes almost always passed down to consumers anyway?

[FoxNewsSucks]

3. No. Taxes are on profit

If they pass it to consumers by raising prices, that will just increase profit which will increase the tax.

Income taxes aren't generally used when determining sales price.

[MichMan]

9. When the Trump tariffs kicked in, all we heard its that they were being passed down to consumers

and not paid by corporations. How are corporate income taxes any different?

[FoxNewsSucks]

10. Tariffs are not income taxes.

More comparable to a sales tax.

Income taxes are based on profit. Sales taxes and tariffs are based on sales or units.

[MichMan]

12. I give up

Income taxes no matter how high are never passed on, but the same amount called a tariff is always passed on directly to the consumer. If you say so

If a tariff on aluminum caused a major manufacturer $250 million a year it gets passed on. If they get charged an additional $250 million per year in income taxes, they just eat it.

Makes sense to me

[MichMan]

19. Please explain how a tariff and a tax of identical amounts that is assessed on the same company

doesn't affect the bottom line similarly

If a corporation gets hit with a $250 million tariff on goods or a $250 million dollar income tax on profits, either way they are paying the same amount of $250 million out of gross receipts, aren't they?

[JustAnotherGen]

26. They were

You'll start to see metal parts and components inflict pain very soon.

Motherboards, cables, cords, power supplies will be directly after.

The 25% + Chapter Minimum kicked in 1/1/21. So the pricing you will see in Q4 is going to bite.

[OAITW r.2.0]

28. Yup, it won't show up in our taxes, but the cost of living is definitely going up.

I'm big on extrusions....and the Aluminum LME has gone up $.80/kg in the past 8 months. Not blaming Joe, but that is the reality.

[JustAnotherGen]

30. I'm in Trade

B2B Manufacturer.


Parts & components for transformation into Made in the USA finished goods should never have been included.

I would even give CBP 20% on sub assemblies - that's fair as those could have been assembled by American workers.

Parts and Components are going to hit hard as we move into Christmas. Our Customers have held back as long as possible - but they are ready to pass through to the end user/consumer now. In some cases - it could be say a delivery service - those prices for the server tricky down to the woman ordering lunch, the man taking an Ubet, etc etc

[OAITW r.2.0]

35. The cost to build and produce an aluminum extrusion factory does not make sense, here.

Not enough value to create. Not with the price-tag associated. (Labor and environment) . But the place to be is India, not China.

[JustAnotherGen]

37. Yep

India has their extended ewaste producer program which makes it even better for their country. They can develop industry green-centered as they can look at our environmental mistakes - and avoid.


I'm for tariffs and trade wars - they keep me employed.

But, very few Americans - including a few here - realize that CBP'S central focus has Been and will always be a revenue collecting agency.

[OAITW r.2.0]

38. While I think India is a better place to invest, long term....

Short term.....dicey.

[unblock]

5. Taxes on individual transactions, such as sales tax, can be "passed on"

Though in practice, the tax is somewhat shared between buyer and seller.

If an item costs $100 and a state slaps on a 6% sales tax, it's not actually optimal for the seller to keep the base price at $100 because sales would drop too much.

It works out better for the seller to make the price $97 give or take so that effectively, the buyer pays $3 more and the seller makes $3 less. Maybe its 4 and 2 or 2 and 4, depending on the product. Point is, corporations like to pretend it's all passed through to the buyer because that's a politically effective argument, even though it's inaccurate at best.


As for income tax, that's pretty much entirely irrelevant to pricing because it doesn't affect the optimal price point. If they raise prices from $100, they'll just be hurting their own sales for no reason.

Income taxes do not affect whether or not a transaction is profitable, it only affects how much profit the seller can keep. It actually changes very few business decisions, other than to try to evade the tax by shifting business to lower tax jurisdictions.

[MichMan]

11. I don't understand your example because sales taxes are paid directly by consumers anyway.

How would their sales be hurt from increasing prices if their competitors are also facing the same tax rate ?

While you are correct that income taxes do not affect if a transaction is profitable, profits are necessary to fund expansion and provide an adequate return on investment to satisfy shareholders, lenders and other principals. If after taxes are paid, a company only nets a very small % of after tax income, that makes taking any risk in R & D and entering new markets not worth it.

[unblock]

24. They won't lose business to competitors if they all pay the same sales tax

But in theory there may be a few customers who were willing to pat $100 but not willing to pay $106, so they won't buy, or they'll buy less.

That's why they might lower the nominal price to something like $97, so the customer pays $103 and that won't hurt sales as much as if they had to pay $106.

It depends on how price-sensitive that product is.


As for r&d, remember that losses are deductible for businesses. So the risk of a bad investment is lower, making r&d safer. So, less upside potential, yes, but also less downside risk. Your point is valid, but only for businesses without any (or enough) profits to offset. In most cases though, it takes a very large tax bite to affect these decisions because they remain profitable, just not "profitable enough"

[azureblue]

6. this is false

and a repub scare tactic. Restoring corporate tax cuts does not affect your personal taxes much less force you to itemize. There is no cause and effect. You didn't itemize before Trump gave away tax cuts to big corporations, did you?

[MichMan]

7. Responding to those who champion repealing the entirety of the Republican tax cut

The tweet in the OP says RT if you think Trumps tax cuts must go. I assume that means ALL of them, since it doesn't say otherwise

I didn't itemize back then and generally had to pay an additional $1500 per year above and beyond my withholding. The last couple years, that wasn't necessary and I actually got a small refund

[Thunderbeast]

8. Your taxes may have gone down...Mine went up!

The expanded standard deduction did not cover the tax increases pegged to the cap on State and Local Taxes (SALT).

Absolutely repeal the giveaways to corporations and high earners.

[MichMan]

13. A home in my area that cost that much in property taxes is owned by the rich

I can see why they are so upset about not being able to deduct SALT on a $1 million home.

[Thunderbeast]

15. In Oregon, with high property AND income taxes, you do not need to be weakthy

to max out SALT.

[JustAnotherGen]

23. Not true

My home in NJ was $250K with property taxes sitting just under 10K.

My state income tax was 9K. Income tax is fair.

Paying property taxes twice is ridiculous.

I don't think you are a troll. I do think you live in in a state that places a very low priority on public education and general services.

A couple in NJ making 100K A year - I'm sure you think are millionaires living high on the hog. They aren't. They may have saved 10 years to buy a house.

Bottom line - the SALT cap existed for more than 100 years and is tied with the establishment of the IRS as we know it today.

I have two ideas I could live with - rewrite the entire income tax code. Not going to happen.

Another - each child in America's school receives $2600 per student. The State makes up the difference.

Easy peasy for New Jersey. I would net even. My Fed taxes go down, my property taxes tip up.

But as a local voter - I can have more impact by my school board vote.

[MichMan]

29. My property taxes are $1200 on a house valued just under $200K

I do live in a rural township. As far as services go, our roads are plowed in winter, our trash is picked up and we have a beautiful township park. Don't feel like we are missing out on very much

We do have a tax provision here that only allows property taxes to raise the amount of inflation since you first moved in. Since we have lived in the same house since 1993, the taxes aren't linked to current market value. Someone here with a $10K property tax bill would be in a Mcmansion.

Our state funds public schools with $8000 per student, so I'm not sure why you think they are underfunded (especially compared to your $2600 figure)

I myself attended public schools (including a few years in an inner city urban district) and graduated from a well respected private engineering university, so not uneducated.

[MichMan]

32. How does your average retiree in NJ on a fixed income afford $10k in annual property taxes?

That is nearly half of what many people make from Social Security

[JustAnotherGen]

36. Since the blue state money grab of 2019

They are suffering.

But hey - as long as as you get to pay $1200 per year on your famcy schmancy 2500 square foot suburban oasis in Michigan . . .

What do you care about an elderly person in NJ living in a 1000 square foot home in Bergen County.

Your taxes went down so Trump could punish NJ for not voting for him . . .twice.

I get it - you got yours . . . so what do you care in a 100 year old rule put homeowners 1000 miles away under water.

Why do you want yo punish middle class people? Middle class family of four making 100K A year paying property taxes twice is okay with you?

Got it - completely understood. I.was okay with lifting it to 20K - but now reading this - put it back where it was.

BTW - My mom in Western NY gets about 33K - and she pays income taxes on that.

https://www.nj.com/education/2020/09/nj-has-the-best-public-schools-in-the-nation-again-ranking-says.html

[MichMan]

39. You have no idea where I live or how big my home is

Last edited Mon Sep 13, 2021, 02:50 AM - Edit history (2)

But hey - as long as as you get to pay $1200 per year on your famcy schmancy 2500 square foot suburban oasis in Michigan . .

fancy schmanzy (nope)
2500 sq feet (nope)
Suburban (nope)
Oasis (lmao)
It is in Michigan, so at least you got one right

I'm a recent retiree, living in the first house my wife & I bought 28 yrs ago as a starter home, in a rural part of the state. My taxes went down only because the standard deduction was increased. That helped millions of lower income people who don't itemize, like 2/3 of all filers.

Property taxes are still property taxes. Even if you get to deduct them from income tax, the deduction is worth about 15%. The first 10K of SALT is even still allowed as a full deduction. That means someone who has a property tax bill of $20K is now paying effectively $18,500.

That means someone with property tax of 20k per year is still paying over $1500 per month in PROPERTY TAXES alone. That is more per month than my mortgage plus taxes ever was. For people that live in low COL areas, that seems incomprehensible. If you think it is well worth it, good for you.

Either way, I don't understand how a senior on SS can afford to stay in their home with that amount of property tax, whether there are SALT deductions or not.

I'm no more selfish wanting to keep the standard deduction where it is for my own interests, than you are for wanting the full SALT restored because it saves you $.

[JustAnotherGen]

44. When you were working -

What was your HIGHEST State income tax bill?

Imagine this -
Your Property tax bill is 9843 a year
Your Income Tax (STATE) is 8500K.

You max out at 10K.


Now - I like to think of Income State Tax on par with Federal. So take my 8500 Feds. I'm good with that. Then they ALSO take 8343 from my kitchen table for double property taxes.

I think that's great you guys bought your house 28 years ago in a rural area. Mine was purchased in 2013 in a rural area in NJ (although I'm 45 minutes from NYC and Philly). It needed completely new electrical, plumbing and gutting - but at least I stole it for $250K. Back then our property taxes were 8200 - and we knew we could deduct some of that money and that helped us to plan for OUR Retirement.


Let me ask you a question . . .

Do you really truly believe it is fair that Mississippi receives federal funds from minorities in NJ who may lose their homes (we are ALWAYS targeted by unfair tax policy) so they DON'T have to collect state income tax for schools that are segregated?

This will be interesting. Truthfully - with the racism displayed in KY, MS, AL, WV -

Seriously - I don't want those inbred hateful racists taking the money I had two work three times as hard to earn (black woman) to not even FAIRLY educate black children.

So put the SALT cap back - or the NJ Democrats are going to stand in the way of the Infrastructure bill.

I hope it is an EPIC failure. We maintain our roads, bridges, etc. etc. on our own . . . everyone else can too. It's called inflicting pain on retirees in Michigan the same way its inflicted on my 73 year old disabled mother - whose daughter used HER SALT CAP to pay for her mother's care.

See how this works - everyone out for their own. Have a good day.

[fescuerescue]

47. A house with a $10,000 property tax bill is a Mansion in most of the US

Where the 1%'s live.

Heck I know people who RENT single family homes for less than $10,000 a year.

[JustAnotherGen]

27. Your teachers are underpaid

https://www.northjersey.com/story/opinion/2021/05/17/salt-deduction-reinstatement-can-go-long-way-nj-ny-families/5093645001/

First, for New Jersey, the SALT cap didn’t only impact our highest earners; it also increased taxes on scores of middle class families. In Bergen County, for instance, before the cap was put in place, the average SALT deduction was above $24,000 a year. Put another way, a married couple in Bergen County — a teacher and a police officer making the typical salary — could have had a SALT deduction of more than $17,000.

According to recent reporting, if we reinstated the SALT deduction, nearly a third of New Jersey residents — almost three million people — would get tax relief. As many as 80% of them have incomes of $216,000 or less. Hardly the 1%

[MichMan]

31. Michigan is 7th in the country for average teacher salary and 2nd with COL factored in

Might still be underpaid

[JustAnotherGen]

33. Who is paying for it? $8700 per student

https://www.freep.com/story/news/local/michigan/2021/06/30/michigan-senate-advances-budget-closes-k-12-school-funding-gap/7814009002/

If we could move to a flat rate per student in Federal Funding - I'm sure your teachers and you can figure out a way (property taxes) to make up for the other six thousand.

Sorry - not sorry . . . NJ'S kids and their drinking water come first.

[MichMan]

40. $216K is in the top 10%

The median household income is right around $70K. Anyone in the top 10% by definition is doing very well

[JustAnotherGen]

43. Not in New Jersey

Not in NYC.
Not in Los Angeles.
Not in the Greater D.C. Area.
Not in Boston.
Not in Philadelphia
Not in Seattle

70K is working poor in New Jersey.

Keep listening to the far left though . . . and see what happens to the economy. We have two choices with the SALT cap - default on mortgages and walk away, leaving homes empty and people homeless who PLANNED on a 100 YEAR OLD TAX Law tied directly to the formation of the IRS . . . Or put it back to where it was for 100 years.

The only people that won - are the the red states/those states that do NOT fully fund education, do NOT have America's largest port, do not have to maintain Liberty State Park, do NOT take of their elderly, do NOT provide clean drinking water . . .


If we default en masse - kills the economy . . . but we will still have a blue governor and state house . . . but will you?

[JustAnotherGen]

45. It's not $216K - $305,190

New Jersey
Median income: $85,751
Top 10% income: $305,190
Wage disparity in the Garden State is fairly high, with the top 10% drawing 256% more than median wage earners.

https://www.gobankingrates.com/money/economy/how-much-you-need-to-be-in-top-10-percent-by-state/


Same site - Michigan
Michigan
Median income: $59,584
Top 10% income: $201,676
The spread between the median income and the top 10% of earners in Michigan is 238%.

[GoodRaisin]

25. Nothing is being repealed. Biden's proposing a new tax law.

Of course, in effect, it does change parts of TFG’s tax scam. Biden’s plan should not change anything about your standard deduction or what you currently pay in tax; unless, you have over $435,000 in income (in which case you wouldn’t likely be taking standard deduction).

[MichMan]

41. Well it better not, because we were promised that no one making under $400k would see a tax increase

Going back to the pre 2019 tax law would do just that. 2/3 of filers take the standard deduction and that includes nearly all lower income earners

[GoodRaisin]

42. He did promise that, and has kept his promise. Nt

[questionseverything]

34. When the standard deduction was doubled but personal exemption disappeared

So if you had no kids you got about 4 grand exempted that you used to have to pay taxes on


People with children got screwed when he got rid of personal exemptions

But I don’t think they are messing with halving the standard and bringing back personal exemptions

It’s rates that are going to be adjusted from what I have read so far

[GoodRaisin]

2. This is pretty much as promised, except

for the people making over 5 million. He had originally singled out the people making over $400K. Guess they should be happy.

[blogslug]

4. News Link

https://www.seattletimes.com/nation-world/sens-manchin-sanders-square-off-as-democrats-clash-over-3-5-trillion-economic-package/

By Jeff Stein
and Tony Romm
The Washington Post

WASHINGTON – A powerful panel of House Democrats on Sunday circulated a draft plan that would raise $2.9 trillion in new taxes and revenue predominantly targeted toward wealthy Americans, corporations and investors, as party lawmakers continued to spar in public over the size and scope of their new tax-and-spending package.

The new proposal includes many measures Democrats are widely expected to embrace, such as increasing the top tax rate on Americans earning over $435,000 from 37% to 39.6%. It also calls for a new corporate tax rate of 26.5% for large profitable businesses, up from the current rate of 21% but lower than President Joe Biden’s original proposal of 28%. Some smaller firms would see their taxes stay the same or even cut under the plan.

Many items in the new draft scale back the more ambitious tax increases sought by Biden earlier this year. But the ideas taken together amount to a significant unwinding of the tax cuts enacted by Republicans under former president Donald Trump four years ago, drawing praise from the White House on Sunday.

The draft tax proposal also includes some surprises, including a smaller than expected increase in the capital gains rate paid by investors from 20% to 25%. Biden’s plan had suggested approximately doubling the capital gains rate. In exchange, however, the plan also calls for a new “surtax on high-income individuals” for Americans earning more than $5 million – a measure they say would raise more than $127 billion...

[MichMan]

21. This post explains corporate taxes as I understood them

https://www.democraticunderground.com/100215849326

[DanieRains]

22. Tax Wealth Accumulated Not Income

For the last time. The Rich don't have income.

[LetMyPeopleVote]

46. This makes me smile

Link to tweet