# The 2017/2018 Trump/GOP tax plan **URL:** \ **Category:** Great Debates\ **Created:** [September 27, 2017, 5:47pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442 "2017-09-27T17:47:17Z")\ **Posts on this page:** 20\ **Page:** 22
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [November 8, 2017, 11:31pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/421 "2017-11-08T23:31:29Z")
Well, yeah, if the rules result in unsustainable taxation, of course it will require fixing. But the way you present it, it is as though “double taxation” is the sure cause. It ain’t necessarily so. We could lower one or both of the taxes, and solve the problem, and still have the dreaded “double taxation”. Obviously, there might be fifty different taxes on the same money, in sequence or all at once, and if that aggregates to ten percent of one’s money, that would still be less than one tax of fifteen percent. You’ve made your opposition to “double taxation” clearly known, what is unclear is any reasoning as to why? If the taxation is as fair and reasonable as well-meaning and intelligent citizens can make it, what difference does it make if its one, two, or ten? And if that taxation is brutal and inhumane, again, what difference does it make? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [November 8, 2017, 11:53pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/422 "2017-11-08T23:53:56Z")
> [@Bone](#): > > I’m not familiar with DC taxation rules so take that part with a grain of salt. I didn’t write the previous as clearly as I could. Local income and sales taxes are not what is recognized as undesirable. State and local taxes paid locally then taxed at the federal level is what is currently recognized as undesireable. I base this conclusion on the fact that state and local taxes are currently deductible at the federal level. Two points: first, none of this has anything to do with the principled objection you have to the estate tax, on the basis that it is “double taxation.” We shouldn’t tax multimillion dollar estates because someone once paid state income tax on income decades ago? Huh? Second, the deductibility of local taxes doesn’t actually address double taxation. It isn’t a state and local tax credit, which I would concede would be a policy against double taxation. It’s just a deduction, no different than tons and tons of other deductions in the code. > [@](#): > > The point is to illustrate the recognition of this type of dual sovereign taxation as an undesirable thing. This policy seems to be taken as seriously as the Flag Code, then. Like, what if I established a policy that Americans Shall Not Wear Green Shirts with Jeans! And if someone does, I simply snip about 15 or 20 percent off of one’s green shirt and leave you to go about your business. Not much of a policy, huh? ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [November 9, 2017, 1:21am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/423 "2017-11-09T01:21:39Z")
> [@Chronos](#): > > Why is or should this particular transfer be any different? Because it is paid by rich people, not just regular Joes. And, rich people pay a lot of their hard-earned money to buy Republican politicians. The least those politicians can do for them is invent this idea of unfair double taxation! ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [November 9, 2017, 1:28am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/424 "2017-11-09T01:28:47Z")
> [@Ravenman](#): > > Two points: first, none of this has anything to do with the principled objection you have to the estate tax, on the basis that it is “double taxation.” We shouldn’t tax multimillion dollar estates because someone once paid state income tax on income decades ago? Huh? It’s kind of muddled, you’re right. The dual sovereignty makes the double taxation critique weaker when it comes to the deduction of SALT. But given the low risk of greater than 100% taxation, the avoidance of double taxation on the same income ignoring the dual sovereignty angle is persuasive to me. But to be clear, while I see the double taxation as a negative, my primary principled objection to the estate tax is that I think parents should be able to pass wealth to their children unhindered by government taxation. BTW, [here was the link](https://taxfoundation.org/state-and-local-tax-deduction-primer/) about the origin of the SALT deductions: > [@](#): > > The deductibility of state and local taxes is older than the current federal income tax itself. The provision has its origin in the nation’s first effort at income taxation (eventually found unconstitutional) under the Civil War-financing Revenue Act of 1862, and was carried over into the Revenue Act of 1913, the post-Sixteenth Amendment legislation creating the modern individual income tax. The rationale for the original provision only comes down to us in fragments, though a fear that high levels of federal taxation might “absorb all [the states’] taxable resources,” a concern first addressed in the Federalist Papers, appears to have held sway.[10] Lawmakers sought a bulwark against the possibility that “all the resources of taxation might by degrees become the subjects of federal monopoly, to the entire exclusion and destruction of state governments,”[11] and found it in a federal deduction for state and local taxes. > > This caution would appear prescient as top marginal rates soared from 7 percent in 1913 to 77 percent by 1918 as American doughboys took to European fields, and in 1944, when the top rate skyrocketed to 94 percent at the height of the Second World War. Even in the postwar era, the top marginal rate would remain at 91 or 92 percent every year from 1951 until 1964, when it declined with the implementation of the Kennedy tax cuts.[12] During this era, the state and local tax deduction prevented combined federal, state, and local income tax rates from exceeding 100 percent. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [November 9, 2017, 1:33am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/425 "2017-11-09T01:33:57Z")
> [@Bone](#): > > But to be clear, while I see the double taxation as a negative, my primary principled objection to the estate tax is that I think parents should be able to pass wealth to their children unhindered by government taxation. Do you similarly feel that parents should be able to pass wealth to their children unhindered by government taxation before the the parents die? ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [November 9, 2017, 2:31am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/426 "2017-11-09T02:31:09Z")
> [@elucidator](#): > > You’ve made your opposition to “double taxation” clearly known, what is unclear is any reasoning as to why? If the taxation is as fair and reasonable as well-meaning and intelligent citizens can make it, what difference does it make if its one, two, or ten? And if that taxation is brutal and inhumane, again, what difference does it make? It’s easier to to illustrate the objection if we have a cleaner example. So let’s take the simplest form of double taxation. Let’s say a wage earner makes $50K in a given year, and pays $5K in federal taxes on that money through income tax. Being incredibly risk averse, and weary of banks, the person takes his $45K and puts it in his freezer. Some time later, the federal government says, we need more money, of the $45K you have, we need another 10%, you owe us $4.5K. Clearly double taxation which I think is a bad thing. The idea that something an be taxed, then taxed again, then again, without any kind of transaction occurring - well there’s no limit to that. If we hold the line and say that money transactions can only be taxed a single time, that puts a constraint on government. We’ll agree that transactions may be taxable, but just once. Without this, there is nothing to prevent tomorrow’s 95% tax. So then we move away from the perfect example, and come to the estate tax. Parents give things to their children all the time. It’s the nature of parenthood since kids start out as useless, and gradually become self sufficient (hopefully). Under the idea that when money changes hands that it ought to be taxable, all of these would be taxable transactions. Giving my kid $20 for lunch this week at school - taxable transaction. Well that idea is untenable because it’s both unworkable, and contrary to this fundamental notion that parents give things to their kids. The solution - provide an umbrella under which a certain amount is exempt in a given year and in aggregate. Enter the unified lifetime gift and estate tax credit. We recognize that parents should be able to give things to their kids without being taxed, up to a point and don’t consider certain givings as taxable events. In the past, that point has been much lower, and now, it is higher. For a time, it Yo-Yoed a bit based on other tinkering with the tax code such that I remember certain years it was better to die in. That’s not a great conversation to have with aging relatives. But this figure is ultimately arbitrary. We set the limits based on politics, not principle. The principle recognized below the threshold is that parents should be able to give to their kids. I adopt those reasons, but do not see a principled distinction at an arbitrary dollar amount, other than they have money and the government wants it. And then there is life insurance proceeds - also not a taxable event. IIRC, there’s no upper limit to that either. When we introduce that, this whole taxing on transfer or taxing the income is even less principled. So some things are okay to be excluded as taxable events, it’s just a question of which ones. And yes, I apply this to giving pre-death as well. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [November 9, 2017, 2:43am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/427 "2017-11-09T02:43:07Z")
Thanks for explaining your position. One last question - What if someone leaves their estate to someone who is not their offspring? Do you think that should be taxed as income for the recipient? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [November 9, 2017, 2:46am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/428 "2017-11-09T02:46:44Z")
> [@Bone](#): > > And yes, I apply this to giving pre-death as well. What about wealth left/gifted to you by your grandfather? Your uncle? Your 2nd cousin? The guy across the street? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [November 9, 2017, 2:55am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/429 "2017-11-09T02:55:23Z")
I never expected to hear the argument that giving your child lunch money is indistinguishable in principle from giving them a private island and a bunch of airplanes. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [November 9, 2017, 2:59am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/430 "2017-11-09T02:59:51Z")
> [@Ravenman](#): > > I never expected to hear the argument that giving your child lunch money is indistinguishable in principle from giving them a private island and a bunch of airplanes. Well, it is a valid point. The only difference is dollar amount. And if you say that the difference is dollar amount, where do you draw the line? And how do you know if the line you’ve drawn is a good one? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 9, 2017, 7:39am UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/431 "2017-11-09T07:39:16Z")
> [@Bone](#): > > No. My claim is that the figure you claimed was true was in fact false. Are we in agreement? The 90% figure you claimed was wrong. As I said, I don’t know the number and neither does your source. Some estates will be more than 90% unrealized gains; many will be less. Anyway, 55% is itself a “large” number. It sounds like your goal is to insist that **septimus** ’ number was at least slightly exaggerated rather than focus on the issues I raised. TL;DR: _“If a billionaire’s heirs are able to escape $300 million of tax on his estate, that’s OK because septimus exaggerated and said it was $400 million.”_ ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [November 9, 2017, 12:18pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/432 "2017-11-09T12:18:40Z")
> [@septimus](#): > > As I said, I don’t know the number and neither does your source. Some estates will be more than 90% unrealized gains; many will be less. Anyway, 55% is itself a “large” number. > It sounds like your goal is to insist that **septimus** ’ number was at least slightly exaggerated rather than focus on the issues I raised. Wait so where does this 90% number come from? If you don’t know actually know anything about the content of large estates, why the fuck are you ever posting shit like this to GD? > [@septimus](#): > > This important fact is so flagrantly overlooked, that I’ll repeat it in a larger font: > _ **90% of the estates of the super-rich will be in the form of unrealized capital gains — gains that go completely untaxed without the estate tax.** _ > > This fact is completely absent from the debate. Instead the liars and kleptocrats prattle on and on about the “unfair death tax.” _**This minor(?) aspect of tax law demonstrates the extent to which Ignorance is now the guiding principle of American “democracy.”**_ You posted this as a **fact** and then went on to post about **lairs**. Please **septimus** , tell us more about liars – maybe name some names for us? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [November 9, 2017, 12:38pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/433 "2017-11-09T12:38:50Z")
> [@Slash1972](#): > > Well, it is a valid point. The only difference is dollar amount. And if you say that the difference is dollar amount, where do you draw the line? And how do you know if the line you’ve drawn is a good one? No, it isn’t a valid point. Care for a dependent child is nothing like the disposal of an estate. And we already draw the line on the use of money is tons of different ways. Your first dollar of income is not taxed the same as your millionth. A dollar given to your teenager is not treated like a dollar given to your employee. These rules already exist; it is supremely silly to say that the rules can’t be made. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [November 9, 2017, 3:42pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/434 "2017-11-09T15:42:21Z")
For anyone interested in actual facts and government data about estate tax returns, the IRS has statistics on estate returns here: [https://www.irs.gov/statistics/soi-tax-stats-estate-tax-filing-year-tables](https://www.irs.gov/statistics/soi-tax-stats-estate-tax-filing-year-tables) There were only ~5200 taxable estate tax returns filed in 2010. And precisely 300 taxable returns over $50M. That’s probably the reason we don’t have stats on larger estates, because we’re already only dealing with a very small number at the $50M level, and IRS doesn’t release data for numbers that are so small that they could reveal information about individual estates. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [November 9, 2017, 3:54pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/435 "2017-11-09T15:54:35Z")
> [@Ravenman](#): > > I never expected to hear the argument that giving your child lunch money is indistinguishable in principle from giving them a private island and a bunch of airplanes. We should probably consider taxing any food given to children by their parents. We could keep a running total and then send them the bill when they turn 18. It would, after all, be completely unfair to expect minor children to be able to pay the tax. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [November 9, 2017, 4:31pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/436 "2017-11-09T16:31:34Z")
> [@septimus](#): > > As I said, I don’t know the number and neither does your source. Some estates will be more than 90% unrealized gains; many will be less. Anyway, 55% is itself a “large” number. > It sounds like your goal is to insist that **septimus** ’ number was at least slightly exaggerated rather than focus on the issues I raised. One of the things I try to do is interpret generously because I think that helps discussion. Another is to ignore tangential or trivial disagreements that aren’t critical to the main thrust of issues. When you originally made your claim in post #374, I understood the point you were making and didn’t think the 90% figure was critical to that point so I felt no need to mention the error. But when you brought it up again as if to offer a rebuttal, I was pretty confident it was wrong but invited you to clarify or support your claim. If you want to focus on unrealized capital gains as a component of large estates that’s fine, but as a threshold matter I think it’s important to operate under a shared understanding of the actual facts. I’ve posted quite a bit in this thread trying to respond to various things, but if these types of baseline underlying facts can’t be agreed on, then it’s hard to see how other areas of discussion could be fruitful. > [@Ravenman](#): > > No, it isn’t a valid point. Care for a dependent child is nothing like the disposal of an estate. > > And we already draw the line on the use of money is tons of different ways. Your first dollar of income is not taxed the same as your millionth. A dollar given to your teenager is not treated like a dollar given to your employee. > > These rules already exist; it is supremely silly to say that the rules can’t be made. I’m not saying that rules can’t be made - clearly they can be, have been, and will continue to be made. My preference would be that the rules that are made be consistent and principle based (mine of course). You mention graduated tax rates as treating the same type of transaction differently depending on the magnitude. Not coincidentally I’m opposed to graduated income taxation because if there is to be an income tax, it should be the same if the income has the same characteristics. So all the items that have phaseouts, cuttoffs, etc. based on magnitude I’m generally opposed to when it comes to deductions. You talk about the dollar given to the teenager being different than a dollar given to an employee, but these have different characteristics so it’s not surprising they are treated differently. I’m not saying it’s desirable or realistic to treat allowance to children as a taxable event. I use that instance, the existence of the unified lifetime credit, non taxable life insurance proceeds, etc. as examples where we have recognized money transfers as non-taxable events. Because there exist these examples, the rationale for supporting the taxation of an estate transfer cannot simply be because it is a money transfer. I submit that reason for the estate tax is policy making - because the money is there, rather than the principle that we tax money transfers. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [November 9, 2017, 4:46pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/437 "2017-11-09T16:46:38Z")
> [@Bone](#): > > I submit that reason for the estate tax is policy making - because the money is there, rather than the principle that we tax money transfers. Emphasis added. I think most taxes are like that, and for good reason. We tax “because the money is there” since we recognize the futility and potential danger (to the taxed person) if we tax “where there is no money to pay the tax”. If we had a flat tax, would you not want there to be a minimum people had to make before the tax kicked in? My support of such a tax hinges on that. Don’t tax the first “X” amount because a) the person needs to survive first and b) that’s not where the money is anyway. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [November 9, 2017, 4:50pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/438 "2017-11-09T16:50:39Z")
> [@](#): > > …rather than the principle that we tax money transfers. So, you would accept that a fair argument cannot be made by simply stating one’s preferred outcome as a “principle”? (Hmmm. Maybe should cover this with leaves so its not so obvious…) ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [November 9, 2017, 4:56pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/439 "2017-11-09T16:56:26Z")
> [@John\_Mace](#): > > Emphasis added. I think most taxes are like that, and for good reason. We tax “because the money is there” since we recognize the futility and potential danger (to the taxed person) if we tax “where there is no money to pay the tax”. > > If we had a flat tax, would you not want there to be a minimum people had to make before the tax kicked in? My support of such a tax hinges on that. Don’t tax the first “X” amount because a) the person needs to survive first and b) that’s not where the money is anyway. I heard\* a proposal once about having a completely flat tax, plus a “transfer tax”. So everyone gets billed at whatever we spend per capita, $12k IIRC(?). But then there’s a separate tax to cover the people who can’t pay, so you might end up owing nothing, getting money, or paying a lot more. I’m not sure if he made this up or if someone actually put together a proposal along these lines. \*From a slightly unhinged libertarian type who usually didn’t think things through very well, so YMMV ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [November 9, 2017, 5:09pm UTC](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442/440 "2017-11-09T17:09:28Z")
> [@Bone](#): > > I accept income tax as a necessary form of revenue generation. Earned income has different characteristics than inherited income. Specifically, earned income has the characteristic of being much less likely to be in the hands of big GOP donors. > [@](#): > > For the purpose of this I’ll focus on estate inheritance though I know that inheritance is tied up with the unified gift and estate tax credit. In general, the value transferred through inheritance was already taxed when it was originally earned. Unlike earned income, which all comes out of slush funds acquired by employers in seedy black-market transactions beyond the ken and reach of the IRS. > [@](#): > > I oppose taxing this again. If you’re applying this logic to inherited income and not to earned income, you must have nodded your head at the sagacity of my previous statement, unaware that it was offered as a sarcastic counterfactual. [Previous page](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442.md?page=21) [Next page](https://boards.straightdope.com/t/the-2017-2018-trump-gop-tax-plan/797442.md?page=23)