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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 09:39 AM
Original message
The Hill: Huntsman to unveil sweeping tax reform
Huntsman to unveil sweeping tax reform
By Michael O'Brien
08/31/11 09:07 AM ET

Former Utah Gov. Jon Huntsman (R) will propose sweeping tax reforms Wednesday in a speech outlining his plans on job creation.

Huntsman will lay out his plans for tax and regulatory reform, energy independence and free trade in a New Hampshire speech that's being billed as perhaps the last best chance for Huntsman, who stands far behind the GOP frontrunners in polls, to establish himself as a serious contender for the Republican presidential nomination.

"Meeting our challenges will require serious solutions, but above all, it will require serious leadership a quality in high demand in our nations capital, and among my opponents on the campaign trail," Huntsman will say, according to excerpts released by his campaign.

The centerpiece of the plan is a proposal to reform tax rates. The Huntsman plan would eliminate all loopholes, deductions and tax exemptions in exchange for establishing three individual income brackets, taxed at eight, 14 and 23 percent. The Huntsman plan would also eliminate capital gains and dividend taxes, do away with the Alternative Minimum Tax (AMT) and reduce the corporate tax rate to 25 percent.

more...

http://thehill.com/blogs/blog-briefing-room/news/178957...
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Township75 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 09:44 AM
Response to Original message
1. If it really did eliminate loopholes, deductions, and exemptions, I think I would like it.
I doubt many million and billionaires who can afford outstanding tax attorneys are paying 23%.
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frazzled Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 10:04 AM
Response to Reply #1
4. You want them to eliminate taxes on capital gains?
This is a plan FOR the wealthy. Warren Buffett, as he would tell you, would owe nothing under this, since all his income is from investments. If he makes more money on them, he pays nothing.
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bornskeptic Donating Member (951 posts) Send PM | Profile | Ignore Wed Aug-31-11 10:42 AM
Response to Reply #4
9. I don't think that is what is meant.
I could be wrong, but I suspect that Huntsman is advocating eliminating the separate lower rates for dividends and capital gains. Your interpretation would contradict the claim that he wants to eliminate all loopholes. I suppose we'll have to wait for the speech to know for sure.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 11:15 AM
Response to Reply #9
13. It seems that it is what it means
Edited on Wed Aug-31-11 11:15 AM by karynnj
After reading your post and rereading the relevant part of the HIll article, it did seem ambiguous, but the LA times article is clearer - and it is NO taxes - just as the Ryan plan was.

http://www.latimes.com/news/politics/la-pn-huntsman-eco...

Very Bad!
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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 12:16 PM
Response to Reply #13
17. Thanks for the link. Deplore their insistence on tax reform being 'revenue neutral.'
It will not solve our debt and deficit problem.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 02:06 PM
Response to Reply #17
22. Not to mention, revenue neutral may not be revenue neutral
At the end of 2012, the Bush tax cuts expire. If this is done "revenue neutral" before then, it preserves the historically low rates - as it makes the old schedule irrelevant.
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bornskeptic Donating Member (951 posts) Send PM | Profile | Ignore Wed Aug-31-11 12:40 PM
Response to Reply #13
20. You're right about the LA Times article, but this from Bloomberg says the opposite:

inShare.0
More
Business ExchangeBuzz up!DiggPrint Email ...In an on-the-record conversation at a Bloomberg View editorial meeting, the former Utah governor and ambassador to China said that in his effort to reform the tax code and reduce the deficit he would be willing to:

1.) take away the deduction for interest on home mortgages;

2.) treat capital gains as regular income;

http://www.bloomberg.com/news/2011-08-25/a-sneak-peek-a...

But then at the end of the artcle his spokesman says he doesn't want to raise capital gains rates, which seems to imply capital gains would be taxed, but at the same or lower rates. I'm still waiting to see what he actually says.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 02:03 PM
Response to Reply #20
21. Thanks - that means no one really knows
It could be :
1) No taxes at all - like the LA times
2) Like regular income (which is fair)
3) taxed, but like now, at a preferred rate.

I'm with you - need to wait to see what he actually says.
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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 12:14 PM
Response to Reply #9
16. I believe Huntsman means exactly that. Eliminate both dividend and capital gains taxes.
It is a long held Republican goal.
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frazzled Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 12:26 PM
Response to Reply #9
18. "The Huntsman plan would also eliminate capital gains and dividend taxes"
That's what the quote in the OP says, plain as day.

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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 10:09 AM
Response to Reply #1
5. maybe not after Bush
but in 2000, those making income over $10,000,000 were paying an average rate of 25.4% and those making between $5,000,000 and $10,000,000 were paying an average rate of 28.5%. That's on all their income too - not just the top rate.

Under Huntsman's plan, rich people will not be paying anywhere near 23%, because all of their dividend and capital gains income would be TAX FREE, and that's about 80% of their income.

So Huntsman would eliminate some of the loopholes which are currently enjoyed by the middle class, and even the poor. He would, for example, presumably take away my IRA deduction and also the Retirement Savings Credit on line 51 of the 1040 (which I generally use to eliminate all my Federal Income taxes (a whopping $191 in 2008) but I guess instead of paying $0 in 2008 on income of $11,968.74, under Huntsman's plan, I would pay $254.

Meanwhile, Huntsman just created a loophole for Warren Buffet that you could drive an aircraft carrier through, making all of his dividend and capital gains income tax free.

Huntsman apparently strongly disagrees when Buffet said that "my class has been coddled enough". In the immortal words of John Paul Huntman "I have not yet begun to coddle".
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 11:10 AM
Response to Reply #1
11. The problem is the definition of income is changed to exclude capital gains and dividends
It is very likely that a millionaire gets say 75% of their income from those. Then their maximum tax rate (if it were computed on the income subject now) would be about 6%.
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Zynx Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 02:58 PM
Response to Reply #1
23. If it got rid of all deductions and exemptions, taxes on lower income people would rise drastically.
Think about it, the standard deduction is $11,800. Exemptions are $3,700 per person. A family of four currently has $26,600 not subject to tax.

In general, with capital gains and dividends not being subject to tax, this would drastically reduce taxes on high income people and probably significantly increase taxes on lower income people.
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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 09:54 AM
Response to Original message
2. when I read about that, I quote myself
http://journals.democraticunderground.com/hfojvt/91

the GOP loves the word reform

Posted by hfojvt in General Discussion (1/22-2007 thru 12/14/2010)
Wed Sep 03rd 2008, 01:57 AM

Bush promised to 'reform' social security - by killing it.

He promised to 'reform' the tax code. In other words, take away its progressivity and call that 'reform'.

It's pure marketing. Take a policy which benefits rich people or corporations and sell it to the idiot masses by calling it 'reform'. It's like a political sub-prime loan. Just sign it and don't bother to read the fine print, and then act surprised six months after the election when you have lost your house.

To quote Dennis Kucinich

WAKE UP AMERICA!!!


But isn't Huntsman gonna look silly after the super-Congress already enacts his plan and Obama signs it as part of a deficit reduction deal. Ha, ha, ha, he will have nothing to run on! Another victory for Obama and progressives!!

Huh? http://www.youtube.com/watch?v=Ul2r7Cxc6U8
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Inuca Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 09:54 AM
Response to Original message
3. Huntsman seems to be a pretty decebt guy, EXCEPT
that he wants to run for president as an R. That ambition "forces" him to say some things (not too many when compared to the others) that I dislike and resent. But he is not a neo con, not a teabgger, not a know-nothing, etc., etc. And the R world being as it is, this plan that in the surface at least sounds rather sensible, will make him poll at .5% instead of 1%. I really wish it were otherwise... I do NOT want the Rs to be despicable idiots.
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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 10:16 AM
Response to Reply #3
6. ginormous tax cuts for the rich sound "sensible" to you?
Edited on Wed Aug-31-11 10:17 AM by hfojvt
When Huntsman comes forth with a plan like this, he does not seem like a "decent guy" to me. He seems like a world class a$$hole. He ought to be laughed into obscurity for proposing such a giant giveaway to the rich. How dumb does he think the masses are?
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Inuca Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 11:11 AM
Response to Reply #6
12. I actually mostly agree with you
though I would not have put in such extreme terms. I had not read the quote carefully enough, me bad.
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whosinpower Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 10:17 AM
Response to Original message
7. Sounds quite similiar
To the gang of six deal to raise the debt ceiling.

The one that Obama gave the nod to and immediately because he did so - the GOP rejected.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 11:19 AM
Response to Reply #7
14. The debt deal and the gang of 6 have nothing to do with each other
Edited on Wed Aug-31-11 11:20 AM by karynnj
Though working on the same issue the gang of 6 seems to have been ignored - and I think none (at least of the Democrats) are on the new super committee.

Obama did speak highly of the gang of 6, but nothing they spoke of eliminated taxes on capital gains.
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Turbineguy Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 10:21 AM
Response to Original message
8. In order to win the GOP Primary
You have to show yourself to be significantly more crazy and dangerous than the next candidate.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 11:06 AM
Response to Original message
10. This is all I need to know - to reject it as reasonable
"The Huntsman plan would also eliminate capital gains and dividend taxes, do away with the Alternative Minimum Tax (AMT) "

There is NO way that it is fair to tax money earned through committing labor - ie wages, but not money earned by committing your capital. I really think Democrats need to help people understand that the Republicans are not being truthful when they say that taxing capital gains is taxing money already taxed - it isn't the return of principle is not taxed - just the gain, which is new money and not yet taxed.


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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 12:14 PM
Response to Reply #10
15. they would still argue that it is
The corporation "earns" a dollar in profit. That dollar is then taxed (at least in theory) and then part of that dollar (often a very small part) is given in dividends, where it is taxed again!!! Oooooh noooooo!! The horror! The horror! :scared: :cry: :argh:

Capital gains would be seen as the same way. The corporation earns a dollar and then pays taxes on that dollar and then reinvests that dollar, making the comnpany more valuable. That increased value is then reflected in the capital gains of the investors who risked their money, but then, unbelievably, that greedy old gubmint, taxes that money again. :wow: :hurts:

The Bush tax cuts of 2003 attempted to rectify this, as Bush proposed elimintating income taxes on dividend income. However, those darned old Democrats forced him to compromise. So instead taxes on dividends were only cut in half.

And did you know that almost half of the people with dividend income have income of less than $50,000? And that 3/4 of those with dividend income have income of less than $100,000? It's true. I read it in the Wall Street Journal and then checked it myself with IRS statistics from 2005. I wrote about it here. http://journals.democraticunderground.com/hfojvt/81

But since almost nobody, especially me, clicks links, let me repeat my conclusion here.

"So, it's pretty clear who the real beneficiaries are of the lower rates on dividends and capital gains and it's not the few people with incomes under $50,000 or $100,000 with capital gains that Kudlow and the Wall Street Journal are shedding crocodile tears for. Rightwing defenders of tax cuts for the rich always like to point at the large number of poor and middle class who supposedly benefit from their tax cuts (see, almost 14 million people). They do this to hide the much larger number of poor and middle class who do not benefit (about 90%) and the much smaller number of very wealthy (.05%) who get huge benefits (averaging over $2,000,000!!)."

BTW, I am sure you know that wages are taxed twice. If you make $20,000 a year, you pay $1,530 in payroll taxes. You never see that money. It does not pass go, you never collect it, it goes directly to Washington DC. HOWEVER, it is still considered taxable income, so you DO get to pay income taxes on that $1,530. Now cup your hand over your ear so you can hear the sound of the Republican outrage about this double taxation. It sounds a lot like this :nopity: :nopity: :nopity:

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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-31-11 12:31 PM
Response to Reply #15
19. Thanks for your journal link and the stats.
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