May 8, 2018

Tuesday Off-Topic (Moderated) Open Thread (050818)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

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7 Comments

  1. Despite protest, Betsy DeVos grad speech draws standing ovation from students

    Comment by Par for the Course — May 8, 2018 @ 9:47 am

  2. OPM Proposes Legislation to Cut Retirement Benefits for Current and Former Feds

    [...] The request, which Pon said would save taxpayers $143.5 billion over the next decade [...]

    Trying to bring government benefits in line with the private sector. Let’s hope something like this actually happens.

    Comment by Par for the Course — May 8, 2018 @ 10:04 am

  3. Supply Side Economics demonstrated:

    April was best month in history for U.S. budget, according to CBO figures

    https://www.washingtontimes.com/news/2018/may/7/cbo-says-april-was-best-month-history-us-budget/

    the federal government took in a record tax haul in April en route to its biggest-ever monthly budget surplus, the Congressional Budget Office said, as a surging economy left Americans with more money in their paychecks — and this more to pay to Uncle Sam.

    All told the government collected $515 billion and spent $297 billion, for a total monthly surplus of $218 billion. That swamped the previous monthly record of $190 billion, set in 2001.

    CBO analysts were surprised by the surplus, which was some $40 billion more than they’d guessed at less than a month ago.

    Analysts said they’ll have a better idea of what’s behind the surge as more information rolls in, but for now said it looks like individual taxpayers are paying more because they have higher incomes.

    bolds mine.

    We have maintained that taxing corportations/businesses is a stealth tax upon customers as these entities merely pass on the cost of the tax to their customers by increasing the cost of the product/service.

    Now we also see that taxing businesses forcing them to play tax avoidance games (non productive effort) diverts resources from making products/services which actually means employing fewer people and paying them less (productive effort) to make the product or service and diverting it to accountants playing the tax avoidance game.

    By observation, the reality is taxing production is counter productive and yields less net tax revenue by taxing everything that moves. Any tax levied on a business is simply an employee pay reduction act imposed by government. When politicians foolishly tax a business due to their desperation or greed for revenue, they engage in a downward spiral of net tax revenue. The stupidity of the politician can never be over stated when it comes to financial matters. When millions more people are employed, and millions of under employed people become full timers all earning more money, the net effect is to raise tax revenue and eventually decrease government program costs.

    Comment by dscott — May 8, 2018 @ 4:19 pm

  4. I’ve researched this. The additional income taxes came from “non-withheld” taxpayers (two line items from the last Daily Treasury Statement, “Individual Income and Employment Taxes Not Withheld” and Individual Income Taxes in the “Federal Tax Deposits” section. The first group sends checks; the second sends the money electronically.

    This year’s total of the two in April was $303.7 billion.

    2017′s April total was $256.2 billion.

    2016′s April total was $253.7 billion.

    2015′s April total was $274.7 billion.

    2014′s April total was $232.3 billion.

    No wonder the CBO analysts were surprised.

    There are two things at work here.
    - The tax law caused those who can to push income from 2017 into 2018 to get lower rates which would have on balance increased 1Q2018 individual income tax collections (because 1/4 and sometimes more of any windfall needs to get paid on April 15).
    - The lower income tax rates for 2018 should have caused LOWER first-quarter 2018 estimated payments in April.

    I would have thought that the second factor would outweigh the first but apparently not. That it doesn’t would make it appear that there are a lot of Schedule C and pass-through taxpayers who think they’re going to have much higher incomes this year, and they are paying estimated taxes to reflect that. This could foreshadow huge upside GDP surprises. It also appears to support the notion that a lot of businesses started up during Trump’s first year (I’m assuming that’s what happened; it’s unproven at the moment) after business start-ups fell greatly during the Obama era are making money and paying taxes now.

    Comment by Tom — May 9, 2018 @ 12:04 am

  5. #4, business start ups, yes, we need a story on that… Who keeps the tally on business formation in order to say more businesses were closing shop than being formed in the first place such as happened during the feckless incompetent reign of Barack Obama?

    Comment by dscott — May 9, 2018 @ 4:25 pm

  6. IS 2017 THE YEAR OF THE C-CORP UNDER TRUMP’S TAX PLAN?

    http://www.brimlaw.com/2017/02/16/c-corporation-under-trumps-tax-plan-2/

    Is it possible that owner’s of C corps reshuffled their income to have less business and more personal income??? Sounds like a complicated tax avoidance scheme.

    Comment by dscott — May 9, 2018 @ 4:31 pm

  7. dscott, I don’t think the C-Corp article reflects the law that was actually passed. This does, and it’s not as clean:

    http://www.businessinsider.com/how-trump-tax-reform-will-affect-you-according-to-financial-advisor-2018-1

    “Business income from pass-through entities is taxed at lower rates — but it’s complicated”

    It doesn’t directly address C-corps, though.

    Info about start-ups, when I last looked for it a long time ago, tends to arrive about 18-24 months late.

    Comment by Tom — May 9, 2018 @ 6:26 pm

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