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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe G.O.P. Tax Bill Is Unworkable
https://www.newyorker.com/news/our-columnists/the-gop-tax-bill-is-unworkable?mbid=nl_Daily%20121917%20Nonsubs&CNDID=27161810&spMailingID=12596533&spUserID=MTMzMTgyODIwMTg3S0&spJobID=1301807259&spReportId=MTMwMTgwNzI1OQS2With the House of Representatives set to pass the final version of the Republican tax bill on Tuesday, and a vote in the Senate expected later in the week, here is a prediction: no matter which party controls Congress after next years midterms, lawmakers will eventually be forced to revise this tax bill substantially. This legislation simply isnt workable in the long run. Unless it is fixed, it could end up crippling the tax system.
<snip>
What isnt yet fully appreciated is how porous and potentially unstable the rest of the tax code will be after the bill is passed. With a corporate rate of just twenty per cent, and a big new break for proprietors of unincorporated businesses and certain types of partnerships, the new code will contain enormous incentives for tax-driven restructurings, creative accounting, and outright fraud. Every tax adviser and scammer in the country will be looking for ways to reclassify regular salary income as favored types of business income. For tax accountants, the first step will be to see how many of their well-to-do clients could feasibly convert themselves into corporations. Taxpayers will be able to shield their labor income from tax by simply setting up a corporation and having their income accrue in the form of corporate profits. .?.?. Income that would have been taxed at the high individual rates is instead taxed at the low corporate rate, an updated report from a group of tax experts at New York University, the University of Chicago, and other places noted on Monday. Investment income is also taxed at the lower rate. There is really no downside to this game, the report said.
<snip>
In many instances, this sort of reorganization would be perfectly legal. In other cases, in which the rules are ambiguous, the I.R.S. would doubtless try to crack down. But the I.R.S. is reeling after years of budget restrictionsit has lost about a fifth of its workforce since 2010and the scale of the problems introduced by this new tax bill could very quickly overwhelm the tax agency. The shortfall in tax revenues could be enormous.
Perhaps that is what Republicans want to happen. Undoubtedly, there are some in the Party who would like to see the tax base decimated, the I.R.S. crippled, and the federal government forced to slash spending on domestic programs, particularly entitlement programs. But, for anybody who believes in a properly functioning government, a rational, clearly defined tax system is essential. The Republican reform doesnt meet that standard. In the words of the report, the haphazard lines that the legislation creates are fundamentally unfair and inefficient, and, taken as a whole, it represents a substantial blow to the basic integrity of the income tax. It wont survive in its current form.
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The G.O.P. Tax Bill Is Unworkable (Original Post)
Stonepounder
Dec 2017
OP
Irish_Dem
(46,962 posts)1. Taxes are necessary to support government and services it provides.
In some countries they are proud to pay taxes for a well run government and
excellent services.
Snotcicles
(9,089 posts)2. It's just a looting of the treasury. nt.... In broad daylight.
byronius
(7,394 posts)3. It's what our worst enemy would wish on us.
The latent death toll is going to be the worst Event in American history.
marybourg
(12,622 posts)4. Yep. This is absolutely true.
JHB
(37,158 posts)5. It does what its makers were paid to do...
...Send money skyward.
Fred Sanders
(23,946 posts)6. First world military, third world living standards, is the goal.