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"But, sadly, I don’t think this is really about what makes sense. It is about politics." Clearly this proposal is targeted directly at private SV and tech comp

"But, sadly, I don’t think this is really about what makes sense. It is about politics." Clearly this proposal is targeted directly at private SV and tech companies. And the mortgage deduction and state tax write off proposals are targeted at California / NY. Outside of just a big FU from the Republicans to largely Democratic states what is the end game? E.g. - what are the Republicans actually negotiating for, assuming points like the RSUs are proposed as leverage vs real reform?

ajmurmann 9y ago
I can't overstate how sad it would be if the goal of this change was plainly to stick to to Democrat states. It there is truly do much disdain that didn't boat well for the future as a united country.
- JumpCrisscross 9y ago
  > the goal of this change was plainly to stick to to Democrat states That's not the goal but a predictable side effect of a single party emerging with dominance from close to a decade of structural gridlock. Republicans want to give their base, both donor and electoral, a tax cut. The national debt scares many of their constituents. As a result, they have to at least look like they're trying to avoid blowing the deficit. So they send the bill to outside their base. This wasn't "let's screw our political opponents." It was "let's help our base and stick the bill to our opponents." Subtle, but different.
  - eldavido 9y ago
    It also bears mentioning that some of the proposals in the current plan are surprisingly well-considered. Also, it's not like all of it even hews to traditional republican orthodoxy. A few things I've read: - Removing state exemptions. This concentrates more control at the federal level and is anti-states' rights which is arguably anti-Republican. - Mortgage interest deduction removal/lowering the cap. Economists left and right agree this deduction is a huge sop to the rich, who own homes (the poor rent). - Reducing corporate tax rates. The Economist makes the point constantly that the US's corporate taxes are some of the highest in the OECD and that shareholders, rather than corporations, should be taxed. These high rates also encourage crazy behavior like inversion transactions and tax games with repatriation, etc.
    - davidw 9y ago
      Here's The Economist on this tax bill: https://www.economist.com/news/leaders/21731166-house-republicans-have-written-bad-bill-it-could-be-made-better-how-make-republican https://www.economist.com/news/leaders/21731166-house-republ... tl;dr: it's bad, but includes a few good things, and could potentially be improved.
- saas_co_de 9y ago
  The entire tax bill seems to be sticking it to Democrat states, in particular New York and California, but it is really about urban vs. rural politics. Democrats have become too concentrated as a party in urban areas and so rural voters have gotten enough political power to attempt to address what they view as economic inequities in the current urban/rural income distribution. Republican have also flipped the script on Democrats and so now they are proposing to tax the "rich" (actually urban middle class) and redistribute that to the poorer rural middle class. It is funny because conservatives have been warning for decades that redistributionist games don't end well, while the Democrats have been advocating them, but now that the shoe is on the other foot it doesn't seem like such a good idea.
  - walshemj 9y ago
    it aint the poorer rural middle class that's going to benefit here
    - saas_co_de 9y ago
      they will get a couple thousand dollars a year. the mega rich and corporations will get hundreds of billions. that's politics though.
  - panic 9y ago
    This narrative isn't consistent with what the actual tax bill does, which is a massive redistribution of wealth to the very richest Americans. For example, what part of repealing the estate tax for inheritances above $5.5 million will help this urban middle class?
    - deleted 9y ago
      [deleted]
    - vostok 9y ago
      > For example, what part of repealing the estate tax for inheritances above $5.5 million will help this urban middle class? The narrative is that the tax bill is meant to help the rich and the rural red state poor at the expense of the urban blue state middle class.
briandear 9y ago
State tax write offs are fundamentally unfair. The US government effectively subsidized high tax states. A guy making $100k in Texas ought to have the same exact tax federal burden of a guy making $100k in New Jersey. As it stands now, those two guys pay a different amount to the federal government. That is unfair. A state can raise state taxes will little impact on residents however it results in lower tax revenue to the US government and more revenue to the specific state. High tax states hate giving up that deduction because they would effectively be giving up a subsidy.
- dmode 9y ago
  What about property tax deduction? Why isn't that on the table if you are concerned about fairness. Texas has some of the highest property tax rates in the country. Why not focus on that deduction?
  - briandear 9y ago
    I was referring to all state and local deductions. At the end of the day, the same income should pay the same federal tax. What states choose to do is their business. My point is that states ought not benefit or be discriminated against based on their tax policy. My federal tax bill ought not be different because of the state I live in. I actually live outside the United States, yet I get to file and pay taxes subsidizing a country in which I don’t even live. Aside from Eritrea, the US is the only country that does that.
    - intopieces 9y ago
      >the same income should pay the same federal tax. Given the vast difference between local economies, this would result in huge disparities in effective tax rate depending on where you live. For example, a person who makes $100k in Kansas City, MO is far wealthier than someone making that much in San Jose, CA. Taxing them at the same rate is essentially a massive tax break for one and not the other. The SALT deductions account for this.
      - deleted 9y ago
api 9y ago
> Outside of just a big FU from the Republicans to largely Democratic states what is the end game? I would bet that this is the end game. The entire tax plan seems targeted at "blue states," which already pay more Federal taxes per capita than "red states" when adjusted for Federal inflows. At some point people will start asking: "why should we remain part of the USA? What do we get from Washington?" I would not be surprised if the USA were to fragment by mid-century. The level of regional polarization we have today is unprecedented since perhaps the civil war. Edit: I have a friend who's a little bit conspiracy inclined who thinks there's an agenda to fragment the USA. I find it hard to totally dismiss this notion given how politics is being played. There is definitely a far-right agenda to fragment the EU, so it's not an absurd notion.
orangecat 9y ago
And the mortgage deduction and state tax write off proposals are targeted at California / NY. I'm sure targeting wealthy coastal liberals is a feature for many Republicans, but as nearly every economist will tell you the mortgage interest deduction really is awful and should be nuked from orbit. It's probably the most intelligent thing this Congress has proposed, even if it is by accident.

ajmurmann 9y ago

I can't overstate how sad it would be if the goal of this change was plainly to stick to to Democrat states. It there is truly do much disdain that didn't boat well for the future as a united country.

JumpCrisscross 9y ago
> the goal of this change was plainly to stick to to Democrat states That's not the goal but a predictable side effect of a single party emerging with dominance from close to a decade of structural gridlock. Republicans want to give their base, both donor and electoral, a tax cut. The national debt scares many of their constituents. As a result, they have to at least look like they're trying to avoid blowing the deficit. So they send the bill to outside their base. This wasn't "let's screw our political opponents." It was "let's help our base and stick the bill to our opponents." Subtle, but different.
- eldavido 9y ago
  It also bears mentioning that some of the proposals in the current plan are surprisingly well-considered. Also, it's not like all of it even hews to traditional republican orthodoxy. A few things I've read: - Removing state exemptions. This concentrates more control at the federal level and is anti-states' rights which is arguably anti-Republican. - Mortgage interest deduction removal/lowering the cap. Economists left and right agree this deduction is a huge sop to the rich, who own homes (the poor rent). - Reducing corporate tax rates. The Economist makes the point constantly that the US's corporate taxes are some of the highest in the OECD and that shareholders, rather than corporations, should be taxed. These high rates also encourage crazy behavior like inversion transactions and tax games with repatriation, etc.
  - davidw 9y ago
    Here's The Economist on this tax bill: https://www.economist.com/news/leaders/21731166-house-republicans-have-written-bad-bill-it-could-be-made-better-how-make-republican https://www.economist.com/news/leaders/21731166-house-republ... tl;dr: it's bad, but includes a few good things, and could potentially be improved.
saas_co_de 9y ago
The entire tax bill seems to be sticking it to Democrat states, in particular New York and California, but it is really about urban vs. rural politics. Democrats have become too concentrated as a party in urban areas and so rural voters have gotten enough political power to attempt to address what they view as economic inequities in the current urban/rural income distribution. Republican have also flipped the script on Democrats and so now they are proposing to tax the "rich" (actually urban middle class) and redistribute that to the poorer rural middle class. It is funny because conservatives have been warning for decades that redistributionist games don't end well, while the Democrats have been advocating them, but now that the shoe is on the other foot it doesn't seem like such a good idea.
- walshemj 9y ago
  it aint the poorer rural middle class that's going to benefit here
  - saas_co_de 9y ago
    they will get a couple thousand dollars a year. the mega rich and corporations will get hundreds of billions. that's politics though.
- panic 9y ago
  This narrative isn't consistent with what the actual tax bill does, which is a massive redistribution of wealth to the very richest Americans. For example, what part of repealing the estate tax for inheritances above $5.5 million will help this urban middle class?
  - deleted 9y ago
    [deleted]
  - vostok 9y ago
    > For example, what part of repealing the estate tax for inheritances above $5.5 million will help this urban middle class? The narrative is that the tax bill is meant to help the rich and the rural red state poor at the expense of the urban blue state middle class.

briandear 9y ago

State tax write offs are fundamentally unfair. The US government effectively subsidized high tax states. A guy making $100k in Texas ought to have the same exact tax federal burden of a guy making $100k in New Jersey. As it stands now, those two guys pay a different amount to the federal government. That is unfair. A state can raise state taxes will little impact on residents however it results in lower tax revenue to the US government and more revenue to the specific state. High tax states hate giving up that deduction because they would effectively be giving up a subsidy.

dmode 9y ago
What about property tax deduction? Why isn't that on the table if you are concerned about fairness. Texas has some of the highest property tax rates in the country. Why not focus on that deduction?
- briandear 9y ago
  I was referring to all state and local deductions. At the end of the day, the same income should pay the same federal tax. What states choose to do is their business. My point is that states ought not benefit or be discriminated against based on their tax policy. My federal tax bill ought not be different because of the state I live in. I actually live outside the United States, yet I get to file and pay taxes subsidizing a country in which I don’t even live. Aside from Eritrea, the US is the only country that does that.
  - intopieces 9y ago
    >the same income should pay the same federal tax. Given the vast difference between local economies, this would result in huge disparities in effective tax rate depending on where you live. For example, a person who makes $100k in Kansas City, MO is far wealthier than someone making that much in San Jose, CA. Taxing them at the same rate is essentially a massive tax break for one and not the other. The SALT deductions account for this.
    - deleted 9y ago

api 9y ago

> Outside of just a big FU from the Republicans to largely Democratic states what is the end game? I would bet that this is the end game. The entire tax plan seems targeted at "blue states," which already pay more Federal taxes per capita than "red states" when adjusted for Federal inflows. At some point people will start asking: "why should we remain part of the USA? What do we get from Washington?" I would not be surprised if the USA were to fragment by mid-century. The level of regional polarization we have today is unprecedented since perhaps the civil war. Edit: I have a friend who's a little bit conspiracy inclined who thinks there's an agenda to fragment the USA. I find it hard to totally dismiss this notion given how politics is being played. There is definitely a far-right agenda to fragment the EU, so it's not an absurd notion.

orangecat 9y ago

And the mortgage deduction and state tax write off proposals are targeted at California / NY. I'm sure targeting wealthy coastal liberals is a feature for many Republicans, but as nearly every economist will tell you the mortgage interest deduction really is awful and should be nuked from orbit. It's probably the most intelligent thing this Congress has proposed, even if it is by accident.