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The Impact of the GOP Tax Bill on Savers

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I’m very pleased to announce that Sol Nasisi will be a regular contributor to DepositAccounts. Many of you may be familiar with Sol from his time at BestCashCow where he is the co-founder and a past president. Last year Sol left BestCashCow and is now working on other projects. I was thrilled when Sol approached me with an interest in contributing to DepositAccounts. Sol will be writing a few articles a month on trends, news and issues that impact savers. I’m sure you will appreciate his analysis and insights that he has gained from his many years in the banking industry. Please join me in welcoming Sol Nasisi.

The Impact of the GOP Tax Bill on Savers

by Sol Nasisi

Ever since the 2008 financial crisis, savers have taken it on the chin with rock bottom interest rates. The Federal Reserve, in an effort to revive the economy, lowered the federal funds rate, deflating returns for savers and creating an almost decade-long spell of near 0% returns on savings and CDs.

Finally, in 2015 as the economy continued to grow, the Fed began to reverse its 0% interest policy and rates began to slowly rise. On Dec.13, the Fed announced the latest of its five rate hikes since 2015, raising the Fed Funds Rate to 1.50%.

Many have analyzed how the GOP tax bill will impact lending, real estate, and small businesses, but scant attention has been paid to savers. The good news for savers is that the GOP tax bill that is currently winding through Congress has the potential to further accelerate the economy, as least in the short-term, and quicken the pace of rate increases over the next year. Although savings and CD rates may not return to the 6% range anytime soon, the GOP tax bill on the whole provides upside potential for savers.

Key provisions that will have a significant impact on savers

The House and the Senate bills differ in several significant aspects but some of the key tenets are the same. Three provisions of the GOP tax bill will most impact savers.

Lower rates within the new tax brackets

Both the Senate and House tax bills aim to lower federal income taxes for many Americans. The House seeks to accomplish this by cutting the number of tax brackets to four (10%, 25%, 35% and 39.6%) versus the seven brackets today (10%, 15%, 25%, 28%, 33%, 35% and 39.6%). The Senate bill will keep the seven brackets but lower the rates to 10%, 12%, 22%, 24%, 32%, 35%, and 38.5%. Many, although not all, Americans will fall into lower rate tax brackets with either of these plans.

Individuals who put their money into savings or CD accounts must pay taxes on the income generated on their returns. Depending on whether the Senate or House plan is passed, a saver’s tax bracket could drop, reducing the tax they have to pay on any interest income earned on deposit products. A saver in the current 33% tax bracket who has $100,000 in a CD at 1.5% APY will pay $495 in taxes on their earnings. Under the new plan, using the House brackets, the tax bracket drops to 25% and the payment to $375.

Not huge money, but it’s still something. The bigger impact will come from the changes in the corporate tax rate and the repatriation rates.

Cuts the corporate tax rate to 20% from 35% today and lowers the corporate repatriation rate to 10% for cash and 5% for non-cash

These two provisions are lumped together because they both impact the business climate in the United States. Cutting the corporate tax rate increases the earnings of corporate America and we have already seen the effect of this on the stock market. Much of the stock market's movement over the last year has been based on the prospects of the tax plan. Markets and business sentiment are forward looking, and after the election the stock market began to price in a significant cut in corporate taxes. As markets and corporations looked forward to the cut, the economy, which had already been steadily growing, kicked into higher gear, and the stock market and interest rates responded.

The S&P 500 has surged ahead nearly 19% in the last 12 months and GDP growth accelerated to 3.3% in the third quarter, and 3.1% in the second quarter, the first two consecutive months of above 3% economic growth since April and July of 2014. The labor market was already extremely tight, with the unemployment rate at a 17-year low of 4.1%.

American companies have over $2.5 trillion in cash stashed abroad, a strategy that helps them avoid paying the 35% corporate tax. The tax bill will provide an amnesty tax rate of 10% on cash and 5% on non-cash to repatriate funds into the United States. Goldman Sachs analysts believe that at a 12.5% repatriation rate, $250 billion will be brought back into the economy and markets. This money could stimulate the economy via stock buybacks, dividend payouts, capital expenditures, M&A activity, and R&D.

And stimulus certainly won’t hurt savers. Savings and CD rates are pegged to the Federal Reserve’s Federal Funds rate. As the economy accelerates, the Fed raises the Federal Funds to cool growth and prevent inflation. Conversely, when the economy is in recession or growing slowly, the Fed drops rates to try and stimulate the economy and increase growth. Faster growth over a period of time leads to a higher Federal Funds Rate and to higher Savings and CD rates.

Since 2008 financial crisis, the Fed has kept the Fed Funds Rate at close to 0%, precipitating rock bottom rates on savings and CDs. But that started to change in 2015 as the Fed began lifting rates in response to a growing economy that had largely recovered from the financial crisis. The accelerating pace of economic growth over the past two years has prompted the Fed’s Open Market Committee to increase the Federal Funds Rate three times this year, raising the rate from 0.75% to 1.50%, the most recent increase coming on December 13. Savings and CD rates have risen in lockstep.

5-year savings account rate history

The tax plan could accelerate these rate increases

GOP lawmakers argue that the combination of cuts in corporate taxes, an increase in disposable earning from the cuts to individual tax rates, and the possible repatriation of some of the $2.5 trillion in cash could further stimulate the economy and force the Federal Reserve to accelerate the increase in the Federal Funds rate.

While the Fed does not endorse the Trump Administration’s belief that the tax cut will result in annual GDP growth over 3%, it does believe the tax cut will provide a “modest lift.” This means that for now, the Fed’s outlook for three additional Fed Funds increased in 2018 remains. As we have seen in the past with the housing bubble and the dotcom boom, The Fed is not omniscient.

Speaking to the Senate Banking Committee on Nov. 28, incoming Federal Reserve Chair Jerome Powell said, "We've been patient in removing accommodation and that patience has served us well...It's time for us to begin normalizing interest rates and the balance sheet."

This normalization could bring the Fed Funds rate up to 4-5% and savings and CD rates to the 6-7% range over the next 24 months. The chart below shows that in periods of high economic velocity, rates rose into the 4-6% range, and in the 1980s, even higher. How long they stay at the level depends on the future performance of the economy.

Target Feds Fund Rate History

This is not to say that savers will benefit from all provisions of the plan. The GOP is still working on a compromise between the House version and the Senate’s proposed plan. The change in the tax brackets could sunset after 2025, raising rates back to the existing levels. Some individuals who make more than $200,000 would see their rate bracket increase according to the House plan. The plan could also eliminate deductions for education expenses, mortgage interest and some home mortgage interest deductions. And the plan is forecast to add more than $1 trillion to the deficit.

But for savers, the tax cut, if it spurs higher economic growth, will reinforce and accelerate already strengthening interest rates. Those who rely on the interest from savings accounts and CDs will see higher interest rates and lower taxes on that interest.

Go with online savings accounts

So, how’s the best way for a saver to play the forecast rise in rates? In a rising rate environment, it’s wise to avoid locking money into certificates of deposit. Instead, individuals should place money into high yield savings accounts. Online savings accounts often offer rates comparable to three and four year CDs and the rate will continue to rise along with interest rates.

If you do decide to open a CD, check the penalties for breaking the CD in case rates really shoot up and you want to get your money out. DepositAccount’s Early Withdrawal Calculator can help you determine if you should break the CD.

Comments
klink
klink   |     |   Comment #1
Welcome and thanks for the insight.
Kaight
Kaight   |     |   Comment #2
Here is what I have as of about an hour ago:

Seven rates, starting at 10 percent and reaching 37 percent for incomes above $500,000 for singles and $600,000 for married, joint filers.

For joint filers:
10 percent: $0 to $19,050
12 percent: $19,050 to $77,400
22 percent: $77,400 to $165,000
24 percent: $165,000 to $315,000
32 percent: $315,000 to $400,000
35 percent: $400,000 to $600,000
37 percent: $600,000 and above

For single filers:

10 percent: $0 to $9,525
12 percent: $9,525 to $38,700
22 percent: $38,700 to $82,500
24 percent: $82,500 to $157,500
32 percent: $157,500 to $200,000
35 percent: $200,000 to $500,000
37 percent: $500,000 and above

Corporate Tax Rate
Current law: 35 percent

Proposed: 21 percent, beginning in 2018.

Corporate Alternative Minimum Tax
Current law: Applies a 20 percent rate as part of a parallel tax system that limits tax benefits to prevent large-scale tax avoidance. Companies must calculate their ordinary tax and AMT tax, and pay whichever is higher.

Proposed: Repealed.

Pass-Through Deduction
Current law: Pass-through businesses, which include partnerships, limited liability companies, S corporations and sole proprietorships, pass their income to their owners, who pay tax at their individual rates.

Proposed: Owners could apply a 20 percent deduction to their business income, subject to limits that would begin at $315,000 for married couples (or half that for single taxpayers).

Standard Deduction
Current law: $6,350 standard deduction for single taxpayers and $12,700 for married couples, filing jointly.

Proposed: $12,000 standard deduction for single taxpayers and $24,000 for married couples, filing jointly.

Individual State and Local Tax Deductions

Current law: Individuals can deduct the state and local taxes they pay, but the value is subject to certain limits for high earners.

Proposed: Individuals can deduct no more than $10,000 worth of the deductions, which could include a combination of property taxes and either sales or income taxes.

Obamacare Individual Mandate

Current law: An individual who fails to buy health insurance must pay penalties of $695 (higher for families) or 2.5 percent of their household income -- whichever is higher, but capped at the national average cost of the most basic, low-premium, high-deductible plan.

Proposed: Repeal the penalties.

Mortgage Interest Deduction

Current law: Deductible mortgage interest is capped at loans of $1 million.

Proposed: Deductible mortgage interest for new purchases of first or second homes would be capped at loans of $750,000.

Medical Expense Deduction

Current law: Qualified medical expenses that exceed 10 percent of the taxpayer’s adjusted gross income are deductible.

Proposed: Reduce the threshold to 7.5 percent of AGI for 2018 and 2019.

Child Tax Credit

Current law: A $1,000 credit for each child under 17. The credit begins phasing out for couples earning more than $110,000. The credit is at least partially refundable to qualified taxpayers who earned more than $3,000.

Proposed: Double the credit to $2,000 and provide it for each child under 18 through 2024. Raise the phase-out amount to $500,000, and cap the refundable portion at $1,400 in 2018.

Estate Tax

Current law: Applies a 40 percent levy on estates worth more than $5.49 million for individuals and $10.98 million for couples.

Proposed: Double the thresholds so the levy applies to fewer estates. The higher thresholds would sunset in 2026.
Kaight
Kaight   |     |   Comment #3
UGH!!! STILL no way for me to edit my post. #&%@!## Anyway:

Just wanted to add that the above is AFTER reconciliation. Senate and House will vote next week.
Kaight
Kaight   |     |   Comment #4
Boy, ya gotta be perfect around here with no longer any ability to edit. Sorry, I'm not. But want to add that there are no longer any Republican holdouts in the Senate. All Senate Republicans without exception, as of only a short while ago, are expected to vote for the reconciled legislation.
deplorable 1
deplorable 1   |     |   Comment #8
Nice job! Thanks for the update. This is looking better and better for me at the top of the projected 12% bracket.
DOA
DOA   |     |   Comment #5
What about personal exemptions? I thought that was eliminated.
Do you know if there is an additional deduction amount for over age 65?
CuriousDave
CuriousDave   |     |   Comment #52
Yes, the reconciled bill does away with personal exemptions (after annual inflation adjustment, it would probably have been at least $41,00 per individual. However, it seems exemptions will still be allowed for dependents under existing rules, probably $4,100 per dependent for 2018.
Note that not only are the new standard deductions less than double the old, their value is reduced also because the old standard deduction was indexed for inflation and would have increased by at least $100 in 2018 but for tax reform.
The additional standard deduction for those 65 and older and for blind individuals will be gone.
Even more deceptive is the effect of raising the standard deduction. Consider the following example:
Married couple has $15,000 of itemized deductions in 2017. As that exceeds the 2017 standard deduction of $12,600, $15,000 will be the deduction on the couple's return, providing $2,400 more in deductions than the standard amount.
Now suppose that in 2018 the same couple again has $15,000 in itemized deductions. Because the 2018 standard deduction is $24,000, the 2017 benefit the couple has of deduction $2,400 in excess of standard is gone, so the 2018 tax return will show only $9,600 more in deductions than the 2017. So much for a double deduction.
What all this means is that all the talk the wonderful benefit of the so-called doubling of the standard deduction is deceptive. After factoring in the permanent loss of personal exemptions, and the potential to itemize more than the standard deduction, the couple in the example claims an extra $9,600 in deductions and loses 2 x $4,100 in personal exemptions, for an overall net reduction in taxable income of only $1,400. Even at the top tax bracket of 37%, thy save only $518 of tax. If both spouses are 65 or older or are blind as of 12/31/2017, their situation is even worse, because in 2018 they also lose their additional standard deduction ($1,550 per person in 2017, probably $1,600 each in 2018 after inflation indexing). In fact, they would have $1,800 more in taxable income than 2017!
deplorable 1
deplorable 1   |     |   Comment #59
Well how many people have $15,000 in itemized deductions? I never did. In fact most Americans as in the vast majority do better using the standard deduction because of the threshold limitations the IRS imposes before you can even start getting the deduction. You have to have huge expenses in order to make itemizing even worth it. Sure you could arbitrarily come up with a scenario which would make this bill worse for someone but you can do that with any tax cut bill. One thing is for sure though with Hillary we ALL would have had tax hikes!
Nothing
Nothing   |     |   Comment #60
On seniors Curious Dave is right on! And, most of the younger folks in expensive states were/are likely to have north of 15K in itemized deductions...especially if lumping them up and alternating every other year bet itemize and std deduction...use to do that but now...We had 24k in deductions and exemptions...now we will have a little less than 24K in deductions with not 12%, but the old 10%...Big deal! ha ha
Robin Hood
Robin Hood   |     |   Comment #80
Pretty much anybody that has a mortgage, state and local taxes, medical expenses and donates to charity.
NYCBob
NYCBob   |     |   Comment #215
If you live in a high tax state, property taxes average 10-15K and state and city income taxes approach 9% of income. That exceeds 15K easy.
Bozo
Bozo   |     |   Comment #6
Kaight, thanks for the synopsis.
Robin Hood
Robin Hood   |     |   Comment #79
For seniors, that increase in the deduction is offset by stealing the personal exemption.
This is a reverse Robin Hood tax plan. Steal from the poor, give to the rich!
Nothing
Nothing   |     |   Comment #7
The standard deduction currently for seniors is (enhanced to) almost $24K (it is lower for non-seniors), thus seniors do not gain a thing with $24K std deduction for a married couple!
Bozo
Bozo   |     |   Comment #9
Nothing (re comment #7), I had to chuckle. Senior discounts are anachronistic. A couple of weeks back, I joked with my barber "why do you still give senior discounts"? The interesting question is why seniors ever got a break on the standard deduction to begin with. As a senior myself (hit RMDs this year), I read all these stories of millennials just scraping by, while their parents (we boomers) are scarfing up gains in their retirement accounts.
deplorable 1
deplorable 1   |     |   Comment #31
@Bozo(comment #9) Come on Bozo not all seniors are trust fund babies flush with cash. Many of them had their pensions disappear and didn't have any retirement accounts or savings because they were counting on SS + pension + medicare to do the trick. My uncle had this happen to him after working 40 years for a pension he never got. Seeing things like this growing up is what turned me into a early saver.
Robin Hood
Robin Hood   |     |   Comment #81
Considering most seniors worked for 50 years before they retired, one would hope they have more assets than younger folks. When I got out of college I was flat broke. But, that was better than being in debt. I got offers for student loans but decided I didn't want to graduate owing banks money. The only loans people should take on in life are a mortgage. Or, a car if you can get a 0% loan.
spayshull
spayshull   |     |   Comment #166
bozee,,,,just how much was that RMD(s).,,,your special fans want to know. enjoy yourself it's later than you think,,,
Bozo
Bozo   |     |   Comment #168
Spayshull (re comment # 166): For 2017, 3.65% X total TIRA balances at EOY 2016.
Bozo
Bozo   |     |   Comment #176
Spayshull 2, I'll just have to keep you guessing. Using current guidelines, let's just say more than some, less than others.
Nothing
Nothing   |     |   Comment #170
And, how much of that was QCD?
Bozo
Bozo   |     |   Comment #177
Nothing (re comment # 170): nada, zilp, ziltch.
Nothing
Nothing   |     |   Comment #181
Bozo, half/half ignores your charitable obligations. And, you can't have it both ways!!! Fess up!
diamonds are a girls best friend
diamonds are a girls best friend   |     |   Comment #186
181----bozo's wife will spend his 3000 buck rmd on a diamond pave quartz watch from harry winston.
DOA
DOA   |     |   Comment #13
Currently, you get to take the standard deduction ($6,350) and one personal exemption ($4,050). If you are 65 or older, you also get to take an additional standard deduction ($1,250). That adds up to $10,400, or $11,650 if you're over 65.

The Republican plan would replace all these provisions with a single deduction of $12,000 ($24,000 for married couples.) That's a 15% increase — except for seniors, who get a 3% increase.
Luvcd
Luvcd   |     |   Comment #16
Wow! I fell better already!
deplorable 1
deplorable 1   |     |   Comment #58
Don't confuse the liberals with math or facts like that. They would much rather remain blissfully ignorant and rant about the how the rich will benefit. Democrats and the media have done a very good job of permanently brainwashing them for life. You could literally hand them a check for $1,000 and they would complain that someone who make 10x more than they do got $10,000.
Robin Hood
Robin Hood   |     |   Comment #83
I did the math. Getting rid of those personal exemptions is going to cost me. Last year I had over 24K in itemized deductions plus the personal exemptions. The whole thing is smoke and mirrors. Voodo economics!
deplorable 1
deplorable 1   |     |   Comment #122
If you were able to claim $24,000 in itemized deductions you are already pretty well off. You must have a huge house and were writing off a ton of mortgage interest. You probably also are living in a high tax state like New York or California.
Nothing
Nothing   |     |   Comment #187
122. And your point is?
Standard
Standard   |     |   Comment #231
You don't need a deduction because you're loaded
deplorable 1
deplorable 1   |     |   Comment #10
Welcome Sol Nasisi Nicely done! I agree with your summation and while no tax cut will please everyone this plan is looking pretty good particularly when we are 20 trillion in debt. This article pretty much echoes exactly what I have been saying about tax cuts and interest rates. This will be a merry Christmas indeed if this passes.
Bozo
Bozo   |     |   Comment #11
Deplorable 1 (re comment #10), I read a tax blog today (from a DC tax firm specializing in withholding issues) that throws a bit of cold-water reality on the "Christmas tax cut". It appears the IRS will not be able to come out with new withholding tables for several months. "Several" was undefined. Until new guidance and tables come out, well, you're stuck with the old tables. So much for a bigger pay-check in February.
deplorable 1
deplorable 1   |     |   Comment #27
@Bozo: Yes this won't go into effect until the following tax season most likely. I was speaking metaphorically. They did bump up the standard deduction $100 to $12,700(married filing jointly) though for 2017. I consider rising interest rates and dividends a Christmas present as well. ;)
Robin Hood
Robin Hood   |     |   Comment #84
Adding more debt is good? I thought you were against increasing the debt. That's more of your fuzzy math again?
deplorable 1
deplorable 1   |     |   Comment #123
@Robin hood: That assumption is totally false because it assumes that there will be no economic activity created from the tax cuts that would offset the added debt. I don't agree with that assumption.
Cracker
Cracker   |     |   Comment #12
So the repatriation rate is 10% for cash and only 5% for non-cash. It seems to me the smart move is to convert the cash to gold and repatriate the gold at the 5% rate. That's what I would do.
deplorable 1
deplorable 1   |     |   Comment #28
@Cracker: Yeah that's pretty low! I believe that non-cash refers to equipment or other assets. I don't think they will let companies buy bitcoin/gold and transfer that as non cash assets.
Californian
Californian   |     |   Comment #14
If you are wealthy, you will do very well with the tax bill, since your tax rate will go down, and thus you will have more money to save or spend. If you are not wealthy, it will not help you one bit, and will actually strip some of your savings, which will be eaten up by higher medical insurance costs, as some insureres prepare to leave the market. Your taxes will not go down, they will very likely go up; additionally the removing of deductions for medical costs, and most of the state income tax deductions, will make your rax bill even higher. And you will have less take-home pay as result, and so whatever small gains you make get in savings rates will be more than eaten up by higher costs for you.

Interest rates will likely go up a bit, but they will never outpace the rise of inflation, which thus means that your gains on bank balances will be overwhelmed by higher spending costs. I could easily see the U.S. dollar declining substantially, as our trade deficit continues to grow. There will likely be asset bubbles as in the '2000's, which will ultimately explode to lead to a massive crash and perhaps a Depression. Getting an extra percent or so on your savings is not going to help people to deal with all of that. There should have been no tax bill, but the purpose of the bill is to give a windfall to corporations, and take the money from the middle class, and then from safety net programs. My best guess, with which anyone is free to disagree, is that it will destroy the middle class in this country, and make them a permanent underclass. But again, if you are wealthy, if you own a corporation, or can incorporate yourself, you will do well for a while.
Bozo
Bozo   |     |   Comment #15
Californian (re comment #14), I believe the medical expense deduction was not only preserved, but enhanced, in the final bill. From 10% of AGI to 7.5% of AGI. That's huge for retirees facing future costs for assisted living/in-home care. I speak from experience. Before she died, my Mom faced huge bills for in-home care, none covered by Medicare. That she could write off the bills (in excess of 7.5% of AGI) was a modest benefit.
DOA
DOA   |     |   Comment #20
Why do they only allow you to deduct medical expenses in excess if 7.5% of AGI? Medical expenses should be 100% deductible.

Anyway, for tax year 2016, this is how it compares for my elderly mother:
$11,500 deductions (mostly medical deductions)
$. 4,050 exemption
=============
$15,550 total exemption and deductions

New tax bill:
$12,000 standard deduction
That’s it. $3,550 less tax deductions compared to current tax deductions in 2016.
Bozo
Bozo   |     |   Comment #23
DOA (re comment #20). I suspect the logic in allowing only medical expenses above a certain threshold was to cushion "catastrophic" expenses, Much like fire, flood, and other catastrophic expenses, above a certain level of AGI.
Bozo
Bozo   |     |   Comment #25
Further to my comment #23, I make no excuses for the rambling wreck currently known as tax policy. Schedule A is, in a word, weird.
deplorable 1
deplorable 1   |     |   Comment #29
You forgot about her actual tax rate. She will also be going from the 15% tax bracket to 10-12% depending on the final bill. I bet their will be some other provisions for seniors in there as well. We will have to wait until next tax season before all the minute details come out.
Bogie
Bogie   |     |   Comment #41
Sort of like "We have to pass this bill to see what's in it" ..................
deplorable 1
deplorable 1   |     |   Comment #56
No because this is a tax cut not a mandatory tax increase on the middle class like Obozocare was.
Nothing
Nothing   |     |   Comment #112
Be self-employed and have high premium ins which is deductible...in full, to the extent of income from business. Proper Prior Planning Prevents----Poor Performance---P to the 7 power!
DOA
DOA   |     |   Comment #163
In revision to comment #20, it looks like now that the tax plan also maintains the extra standard deduction for those 65 and older, currently $1,250 for individuals, $1,550 for heads of households, and $2,500 for couples who are both 65 and older.
CuriousDave
CuriousDave   |     |   Comment #53
There should be no surprise that high income earners will receive the most benefit from tax reform. Now is the time for our elected representatives to pay the pipers that financed their campaigns. After the elections are over, the rest of us are the lame ducks.
Ecstatic
Ecstatic   |     |   Comment #90
#14
Do some math and let us know if it changed your mind...
https://www.calcxml.com/calculators/federal-income-tax-calculator?
https://www.calcxml.com/calculators/trump-tax-reform-calculator
Noam Chomsky
Noam Chomsky   |     |   Comment #101
It took them nearly a century but the Republicans have managed to roll-back the tax structure that FDR put into place during the Great Depression to keep the country from going Socialist.

When the trickle-down economics "boom" doesn't happen, the Republicans will get "deficit religion" again. Then they'll go after Medicaid, Medicare and Social Security to pay for tax cuts for the rich.

My wife was a registered Republican for decads. This latest stunt made her become a Democrat! She's disgusted with the richest country in the world abandoning it's poorest citizens.

As for the middle class, well you got what you asked for (and, probably deserve). Clinton II was a pretty disgusting choice for President. But, she was the firewall between us and the Republicans.
decades
decades   |     |   Comment #35
401k's up 19% , biggest company bonus in history , and now lower taxes going forward...doesn't really make up for not getting a real wage increase in 35 years but its better than a stick in the eye.
pwj7050
pwj7050   |     |   Comment #36
I do NOT like Sol! I read 4 paragraphs and realized he was spewing the same old crap I can read anywhere else!

I read DepositAccounts.com for the latest news! I don’t read it for re-hashed bull****!

Send this guy packing!
Rosedala
Rosedala   |     |   Comment #39
Commenter 36 . . . T R O L L ! ! !
The Trolls
The Trolls   |     |   Comment #102
At least he's a registered user, as such I don't think he counts as a troll.
Ecstatic
Ecstatic   |     |   Comment #43
We are very happy. Our 2018 tax bill will be $4,224 less than under the old rates. One thing I'd like to politely point out is that most people talk through their behinds. Without running specific numbers there is no way to claim a win or a loss with this tax bill. You MUST run the numbers. I have and in most cases people will get a tax cut. No, the family making 25K won't get as much as someone making $250K but guess who pays virtually all the taxes? This is not rocket science.

We've been generous all our lives but I'm tired of hearing about million dollar mortgages that somehow must be subsidized by others. We also fully support education and gladly pay the required tax. However, not once in my life has anyone ever said, "Thanks for putting my kids through school...my family appreciates it." As you may guess we do not have any offspring.

Last but not least I will put the money Donald put back in my pocket to good use. Better use, I must say, than paying for the unethical behavior of an elected official. Over time people have been subjugated into believing government is the solution when, as Ronald warned, government is the problem. Thankfully, not always. Many thanks to Donald and the Republicans who will vote next week to allow us to keep more of our money for our needs and those around us. Merry Christmas to all.
Bogie
Bogie   |     |   Comment #46
The one point you left out is that it wasn't solely out of your "generosity" that you helped educate other peoples children. You were compelled by law, as we all are, to pay your "required" taxes, some of which goes to education. It is a case of being fined and/or given a prison sentence for not paying what is due.
DOA
DOA   |     |   Comment #67
In my mom's case (reference comment #20). the new tax bracket rates are a little lower but they do not makeup for the $3550 amount of deductions she no longer will be able to take. In her case, if you applied the new tax bill rates to her 2016 taxes, she would have paid $316 more in income taxes. So in summary, not all the middle class tax payers will be getting a Christmas present.
reality
reality   |     |   Comment #44
Sadly today people immediatley "love things" if it's from their side, and "hate things" if it's from the other side (and delegitimize any facts that go against their side).

But every independent, non-partisan analysis of this bill I have seen has stated these general facts: the bill vastly favors the rich over the middle class, the personal tax "savings" are only temporary, the corporate tax savings are permanent, the bill plays favorites with those living in lower-cost states over those in higher-cost states, it's estimated that 7% of the middle class will see their taxes increase with this bill, and ironically (but not surprising) to subsidize these tax cuts for the rich, it will blow a 1.5 BILLION dollar deficit, this from the same party that for years cried at the top of their lungs about how terrible the National Debt was.

You can try to spin it all you want, but people of BOTH parties know EXACTLY WHAT THIS BILL DOES -- send this country's deficit soaring in order to give permanent tax cuts to the weathly.
Bogie
Bogie   |     |   Comment #47
That's it in a "nut shell".

And along the way some of us will gain and some of us will lose. As evidenced by some of the comments being posted.
Nothing
Nothing   |     |   Comment #54
Again, all...wait for the reduction in this new debt by minimizing/cutting Medicare, Medic-aid, etc. and keeping FICA, self-employed tax, etc. in effect.
jimmy5
jimmy5   |     |   Comment #71
reality, you're absolutely right -- except it's 1.5 TRILLION!
A new 1.5 Trillion dollar deficit in order to give the rich another tax break.

For those who think this is a GOOD idea, ask yourself this: how would you feel if it were President Hillary Clinton adding 1.5 TRILLION to the deficit in order to give Wall Streeters and the already rich even more breaks?

No need to answer here. But ask yourself that in the mirror, and try not to lie to yourself when doing so (one knows deep down if one is lying to themselves).
Ecstatic
Ecstatic   |     |   Comment #130
#71
I'd support her in a minute (and I cannot stand her) if she lowered my tax burden. In what mystical world do you envision a democrat reducing taxes? Step back and think about the multi-millionaire democrats preaching to the factory worker that they must pay more and more to fund every liberal agenda. I know they say the opposite (rich people are bad) but the truth is higher taxation for all. Most of the loudmouths are very wealthy people living in gated communities completely shielded from their legislative actions. Trump was elected because enough people finally woke up and said enough is enough. We have six degrees in our two-person household so don't fall prey to the notion that only dummies from the hinterlands voted for Trump.
Bogie
Bogie   |     |   Comment #132
Replying to #130, I look at the office of President with eyes wide opened and not narrowly focused on money alone.

I did not and would not support her under any circumstances. Not even if she would have lowered my tax burden to zero. There is a great deal more to being President of the United States than lowering income taxes. And Hillary was certainly not the person for the job. Perhaps Donald Trump isn't either, but he was the lessor of the two evils. As it turns out President Trump is better than any Washington "insider" would have been with "politics as usual".
DCGuy
DCGuy   |     |   Comment #151
"but he was the lessor of the two evils"
There was a reference to this saying that further stated while even though it may be less, it is still evil. So, it could turn out to be a "lose-lose" situation. Sort of like ending up with either Darth Vader or the Emperor.
Bogie
Bogie   |     |   Comment #152
Forget the movies, DCGuy. This is real life, not fiction.
And as you say "even though it may be less , it is still evil." I agree.

No wonder our country is in such a turmoil when that was the best people the Democrat and Republican parties could come up with. However I now do believe President Trump is on the right track. I just hope he doesn't get derailed.
Ecstatic
Ecstatic   |     |   Comment #91
#44
I beg you to justify frugal homeowners living in low tax states subsidizing million dollar mortgages in states that want to provide everything to everyone. Two people making $100K; one owns home the other has a million dollar mortgage. Why on earth should the owner subsidize the borrower? If anything is purely political this deduction, along with SALT is. Fairness isn't taking from the frugal and wise and giving it to the spoiled and selfish.
deplorable 1
deplorable 1   |     |   Comment #128
You hit the nail on the head Ecstatic! I own my own house outright and the standard deduction works out much better for me. The only folks complaining are those in big debt with giant houses and huge mortgages. How large does your mortgage have to be at a 3% fixed interest rate to make it worthwhile to itemize deductions? Not only that but assume you have been paying that mortgage down for ten or more years. You must be living in a mansion in order to take that deduction. I don't really care how large your house is I'm not jealous but I certainly don't want to be subsidizing your mortgage with MY tax dollars either!
Fan of this website
Fan of this website   |     |   Comment #63
Sol, thank you for your article. I would respectfully disagree with your point that the Fed could raise the Federal funds rate to 4-5% in the next 2 years, or for the foreseeable future. Fed officials have stated that the "neutral" rate is about 2.5%. Their 'dot plot' (admittedly hardly a perfect predictor) suggests raising the rate to around 3% by 2019-2020.

Barring some fairly extreme change in the economy, for my two cents, I would say that the Fed does indeed plan to stop raising rates within a range of 2.5 - 3.0%, give or take a quarter point or so. So we will probably have 4 to 6 more 25 bps rate increases. This would suggest that the highest CD rates we are likely to see could be in the range of about 4% (give or take 25-50 bps). One of these years, we will also be due for our next recession = rates go down. I think it highly unlikely we will see CD rates or rates on any deposit investment exceed 5%. Hope I am wrong.
Bozo
Bozo   |     |   Comment #65
Fan (re comment #63): I have but modest aspirations for my CD ladder. It would be nice to see a real rate of return (after taxes and inflation). As it is now, the fixed-income portion of my taxable asset allocation can best be described as in "damage control".
anonymous
anonymous   |     |   Comment #138
For the 4-5% fed funds rates for prior tightening cycles, it would be interesting to compare what the "dot plot" looked like 2 years prior. Did the Fed already predict the 4-5% rates 2 years before? If so, we may just be stuck in a very low neutral interest rate period right now.
more like 4ever
more like 4ever   |     |   Comment #142
com 138,,,,,,,,,,,,,,,,,,,,,,,,,,do ya think it?
Ecstatic
Ecstatic   |     |   Comment #69
Folks, a retired married couple (Both over 65) making $100K/yr would have paid $10,552 under the old tax tables and $8,739 under the new. Difference: a plus $1,813. Their effective tax rate drops from 10.55% to 8.7%.
high fibre diet
high fibre diet   |     |   Comment #70
that money could help find a great cardiologist.
Nothing
Nothing   |     |   Comment #72
#69...and making $100k is after having Soc Sec, 24K in deductions, etc. You say, in effect, if I had 150K (gross of the noted amounts), I would pay 8.7%. But those that have reduced debt and live in a "low" tax state (yes, to some in Calif.) you/one does not need $150k or $8.7k in taxes! You all go for it...pay the $8.7K+! Feed the swamp!
Nothing
Nothing   |     |   Comment #73
PS
WSJ reports...
For 2018, the additional standard deduction for people 65 and older is $1,300 for each partner of a married couple and $1,600 for a single person.

Thus, if each spouse is above 65, the additional standard deduction is $2,600 in 2018. If one spouse is 66 and the other is 60, the additional standard deduction is $1,300.

There’s also an additional standard deduction for taxpayers who are legally blind. For 2018, it is $1,600 for a single person and $1,300 for a married taxpayer. If both spouses are blind, the additional standard deduction would be $2,600.

Taxpayers who are elderly and blind can take both additional standard deductions.
Ecstatic
Ecstatic   |     |   Comment #75
#73
Thanks for the information! Originally, the over 65 addition was eliminated but now it's back...and that means we will enjoy over $5,000 in reduced taxes. Go Donald.
Ecstatic
Ecstatic   |     |   Comment #74
#72
I said nothing of the kind and this is the problem with taxes and the associated math. I did not calculate SS percentages; I just took the gross ($100K) and put it through the tax tables in the new and old bills. If SS is a big part of the income then a percentage would be used to REDUCE the gross subject to taxation lowering the effective rate even further.
gbtexas
gbtexas   |     |   Comment #76
The final tax bill, as I understand (the same as Bozo), will maintain a 7.5% of AGI disallowable deduction for medical expenses in 2018. Did Susan Collin's initial insistence that it be the same, 7.5%, for 2017 prevail, or will it be 10%? Or was it even addressed?
gbtexas
gbtexas   |     |   Comment #114
I've now answered my own question. P26 of 1097 pages says yes, the floor will be reduced from 10% to 7.5% for the year 2017 (as well as additional years beyond).
Anonymous
Anonymous   |     |   Comment #77
Check out www.taxfoundation.org They show additional standard deduction eliminated from the Conference Report of HR 1 Tax Cuts and Jobs Act
Nothing
Nothing   |     |   Comment #82
There is nothing mentioned about blind/seniors and their additional deduction at tax Foundation! It is addressing the std change and there was NO change made in those two areas...go read the wsj “complete” analysis!
Ecstatic
Ecstatic   |     |   Comment #87
Try this with some simple numbers.
https://www.calcxml.com/calculators/federal-income-tax-calculator?

Then run this for comparison.
https://www.calcxml.com/calculators/trump-tax-reform-calculator
Ecstatic
Ecstatic   |     |   Comment #88
Watch your deductions, etc. so the comparison is accurate!
Ecstatic
Ecstatic   |     |   Comment #89
Married couple $100K combined income. Standard deductions.
Old: $11,278
New: $8,739
That's a 22.5% REDUCTION in tax.
Why on earth so many do not want tax relief is truly amazing. The ruling class in Washington (surrounding area is the richest in the nation) has enslaved your mind.
https://www.washingtonpost.com/blogs/govbeat/wp/2013/12/12/the-d-c-suburbs-dominate-the-list-of-wealthiest-u-s-counties/?utm_term=.8270f6a621c1
Newbie1
Newbie1   |     |   Comment #111
Good tires are expensive. I ran my numbers... Looks like I will need to trade the car in for a motorcycle. Thank goodness for tax relief!
Nothing
Nothing   |     |   Comment #93
Tax tables are based upon taxable income...is your $100k taxable income? If not, why not? There are many routes to getting to taxable income, e.g. after my self-employed net income, after deducting my medical premiums for self employed, etc.
DOA
DOA   |     |   Comment #95
For those claiming that the new tax bill does not benefit them, I have not heard any complaints from them that they pay less for medicare part B and D premiums than the higher income group does as required by IRMAA.

I have also not heard them complaining that less of their social security is taxable compared to the higher income group.
Pat
Pat   |     |   Comment #97
Right on doa.....I have also not heard that they will be writing checks to the Treasury to return their tax cuts.
Nothing
Nothing   |     |   Comment #108
Luv debt! Can't wait to see the programs that are cut...drain the swamp!
Pat
Pat   |     |   Comment #98
Deplorable 1 should be posting articles here! He is spot on!
deplorable 1
deplorable 1   |     |   Comment #126
I see many people just using the personal exemptions and deductions saying that this isn't a tax cut for them. I wonder if they have taken into account the percentage of tax savings in each bracket plus the doubling of the child tax credit into account. We have a progressive tax system so your income tax rate has gone down not just in your tax bracket but in every tax bracket beneath you. This can easily add up to many thousands in tax savings.
former deplorable
former deplorable   |     |   Comment #127
I know some people who are going to get a big Christmas present from this: Trump and Republican leaders in Congress. At the last minute, the tax cut on pass through income was extended to cover real estate LLCs of which Trump owns hundreds, as well as Ryan and Corker. This helps explain why Corker suddenly lost his deficit cutting religion. So much for draining the swamp.
deplorable 1
deplorable 1   |     |   Comment #129
Why so jealous? So businesses are getting a great deal. Yes there are people who have much more money than I do but so what I'm still getting a $3,000 tax cut. There will always be people who are more successful than you. Stop worrying about what others have or don't have and take care of your own business. Better yet start your own business there has never been a better time tax wise at least. That is the whole point of these tax cuts to get the economy growing again and small business is the engine of growth.
former deplorable
former deplorable   |     |   Comment #134
I'm not jealous. Disgusted is more like it. Disgusted of politicians who swoop in under the radar at the last moment to sneak in loopholes that benefit them personally. Disgusted at a president who runs as an economic populist when nothing could be further from the truth. Carried interest loophole still in the tax bill after Trump said that hedge fund managers were getting away with murder during the campaign. Trump tells his dopey followers at his rallies that his accountant says that the tax bill will cause him great harm personally - what a lie. If I were you, I would save that $3000 tax cut; you will need it after Trump and the Republicans find that old time deficit cutting religion next year and gut medicaid, medicare and social security. Oh, I forgot, Trump promised not to cut those programs during the campaign, and I think that we can all agree that his word is stronger than oak.
Ecstatic
Ecstatic   |     |   Comment #135
#134
Nothing gets done in business, politics or life in general without compromise. As I once learned, in the USA we have a terrible political and economic system BUT...it's the best system available on the planet at any price!
President Twitter
President Twitter   |     |   Comment #141
Mr. Almost ALL-CAPS latest rant has hit the nail on the head once again. I'm tempted to say "He's not MY president." But, that was so pathetic a response, I'll refrain. Unlike some Democrats, I didn't cry after he got elected. However, my alcohol consumption has gone up dramatically. If they would have made a movie about the last presidential election I would have walked-out. Unless it was a comedy. Which is was. A VERY DARK COMEDY!
pat trollin
pat trollin   |     |   Comment #147
looks like this troll-bot called pat 146 has a bad case of OCD..obsessive compulsive disorder common among chat room trolls.
pat trollin 2
pat trollin 2   |     |   Comment #150
patsy just proved my point, i am never wrong.
deplorable 1
deplorable 1   |     |   Comment #183
I will be putting it in a self directed Roth IRA in high yield dividend paying stocks. This way any capital gains and dividends will be tax free for life. Folks who are in the 10-15% tax brackets get special tax breaks for investing. The problem is that most of them don't take advantage of them.
Ecstatic
Ecstatic   |     |   Comment #137
#126
Of course not. In 40 years of business and education I can count on one hand those who "do the math" before opening their mouths. Educators, by the way, are some of the worst. Just mention effective tax rate and eyes roll. Ours will drop 2.72%. I'd have to be brain dead to come on this board and complain.
Bozo
Bozo   |     |   Comment #153
Ecstatic (re comment # 137): You might be interested in this discussion of LTCGs and QDivs under the new plan. Hasn't received much attention.

https://www.kitces.com/blog/final-gop-tax-plan-summary-tcja-2017-individual-tax-brackets-pass-through-strategies/

Scroll down until the discussion of LTCGs and QDivs, comparing current law with the proposal. Interesting, no?
Bozo
Bozo   |     |   Comment #155
Ecstatic, further to my comment #153, I find it interesting that the Medicare surcharge on LTCGs and QDivs (3.8%) will still kick in at $250,000 taxable income for a married couple, even though the tax brackets have changed. Somebody remind me that this surcharge was supposed to go "poof".
B O
B O   |     |   Comment #156
bozo,,,,you go poof everytime you hit the head.
Bozo
Bozo   |     |   Comment #157
B.O. (re comment # 155): "Hit the head", my goodness, an old Navy expression. Mind you, even with all my years in the Navy and Naval Reserve, I could never figure out why the commode was called a "head".
Bozo
Bozo   |     |   Comment #159
Correction: Poster "BO" 's comment #156. Fat finger follies. Ken, please bring back the edit function.
Bogie
Bogie   |     |   Comment #160
We used the same term "head" in the Marine Corps and USMCR. So here you go:

Head. The "head" aboard a Navy ship is the bathroom. The term comes from the days of sailing ships when the place for the crew to relieve themselves was all the way forward on either side of the bowsprit, the integral part of the hull to which the figurehead was fastened.
cubic bay
cubic bay   |     |   Comment #167
FIREWATCH: what is your 9th general order.
Bozo
Bozo   |     |   Comment #179
Bogie, thanks for the explanation. Seriously, I never had a clue of the history. We had many USMCR on our amphib on ACDUTRA. Only reservists (current or former) will understand the term ACDUTRA.
newbie1
newbie1   |     |   Comment #154
#137 Estatic. As you pointed out in the now “removed” post regarding the woman who earns 26K, (who thus enjoys an already low effective tax rate), low income earners will see reductions of up to 20% of their effective tax rate. While this sounds “huge” it translates to little money in the hand. Looking beyond my own self interest, my fear is that unless this bill boosts incomes for those working age persons struggling to climb the socioeconomic ladder, the income inequality gap will continue its exponential rise. So while this bill is great for certain individuals, ultimately is it going to be great for society? Hopefully trickle down economics will work this time.
deplorable 1
deplorable 1   |     |   Comment #161
@Newbie1: When talking about tax cuts you need to look at the percentages rather than actual dollars! Did the 39.6% tax bracket get a 20% reduction in tax? No far from it. Like I said before someone who makes more money will always be getting a larger cut(in dollars) even at a 1% reduction in tax. This is because they make more but that doesn't negate the facts that the lower income folks will be getting a larger cut on a percentage basis. This is a typical liberal obfuscation strategy in order to dupe the masses. The bush tax cuts cut the 15% tax bracket to 10% a whopping 33.3% tax cut for the lowest earners and the highest percentage cut of all the brackets yet even today the liberals will still say that this was a tax cut for the rich.
newbie1
newbie1   |     |   Comment #172
@deplorable. Thank you for your comment. While I understand the math, I think a lot of people are going to be looking at the "actual dollars" rather than percentages. Actual dollars buy groceries and pay bills, not percentages. A "whopping 33.3%" isn't so "whopping" if it doesn't put much food more food on the table. However in "percentage speak" here is bill viewed through the lens of after-tax income growth:
Bottom Quintile: average increase in after-tax income 0.4%
Middle Quintile: 2.9% increase in after-tax income
Top Quintile: 1.6% increase in after-tax income
95th to 99th percentile: 4.1% increase in after-tax income

That said, rather than quibble about "percentages" vs. "actual dollars" the intended subject of my comment, as I addressed in the second half, is that of the growing wealth gap and income inequality. Why? Economic inequality has negative effects on public health, crime, consumer demand, consumer consumption, housing and the environment. Historically large wealth gaps and extreme income inequality have bred feelings of injustice within the lowest of economic classes. Especially when poverty affects basic human conditions, a large wealth gap has preceded rebellion and social unrest. Think the Worlds': revolutions, wars, times of political chaos, rise to power of Hitler, Stalin, etc.
The masses don't need to be duped by anyone, liberals or conservatives.
Ecstatic
Ecstatic   |     |   Comment #178
#172
Married couple earning $30K pay $920 in 2017 and $600 under the new plan. Look at the numbers. They don't pay much to begin with and if you add in children they may even get money sent to them in the form of refundable credits. But, going from 920 to 620 is better than nothing...an almost 35% decrease. Our percentage decrease on vastly greater taxes is around 15%. The bottom line is you can't give a tax break to people who don't pay taxes.
newbie1
newbie1   |     |   Comment #182
We are both looking at the same numbers and describing the same result, just in different ways. I find the 30K couples 1.07% increase in after-tax income a more meaningful way to describe the effect of this bill on their lives than the 35% percentage decrease in their tax bill. Either way the $320 extra will surely be appreciated. I understand you can not give a tax break to those who don’t pay taxes. I don’t begrudge refundable child credits going to low and middle income people. FWIW we also have no children.
deplorable 1
deplorable 1   |     |   Comment #185
I do see your point newbie 1 and although I don't know where you got those numbers from they do look pretty accurate. It may look "unfair" when looking at income but you need to keep in mind that those folks at the lower income levels could actually be paying little to 0% in federal taxes plus with deductions and tax credits they could easily be pulling in a few thousand dollars from the government each year with their tax return. Honestly It's almost like welfare for low income. I used to help my dad with his tax business so I have seen this first hand.
So yes there IS a wealth gap but this isn't necessarily a bad thing as those wealthy folks will just be paying more taxes to subsidize those who don't. There has always been rich people and poor people and nothing is ever going to change that but the poor people here in the U.S. have a higher standard of living than many in the middle class in other countries around the world. Compared to many people on here I would be considered poor yet I live quite well on a small income. You could steal every dollar from every rich person and play robinhood economics(Obamanomics) if you want but you would still end up with poor people because of human nature. Some people are good with money and some folks have to spend every penny and then some. There is no way to "fix" this as it isn't something that needs to be fixed in the first place and it will lead to more unintended consequences if you try. It's just like the circle of life or the food chain some will be dining while others will be the meal. Sure it's ugly but it is also reality. Conservatives understand and embrace this reality while liberals deny that it even exists...........................I'll save some time "this comment has been removed due to violation of our comment policies etc."
newbie1
newbie1   |     |   Comment #199
@deplorable. Yes, In a market based Capitalism both income inequality and the wealth gap are inherent, and even to a degree fuel GDP growth. The issue is the size of the gap. the gap is nearing pre Depression levels. Yes welfare payments and social programs do help temper the gap. Do you realize how rich you are compared to 80% or more of US households? In 2011 the median household net worth for the 5th quintile was (only) $630,754.
deplorable 1
deplorable 1   |     |   Comment #205
@newbie1: Wow I just looked that up and that is surprising particularly when my wife and I were never high earners and never inherited a dime. I'm well above the median. Just goes to show the power of saving and compound interest/dividends/investments over time. It looks like folks who make big bucks must just blow it all. The income gap seems to be growing for the 1% vs. us 99% but I don't see this as a problem as this is just the compounding of huge assets. It does point out that the 1% possibly needs their own special tax bracket just to bring them in line with the poor folks just entering the 39.6%(new 37%) bracket.
Ecstatic
Ecstatic   |     |   Comment #224
#223
Wrong.
This IS a middle class tax cut.
Married, 40K income, 2 kids under 17 RECEIVE $1,200 from IRS.
Married, 50K income, 2 kids under 17 RECEIVE $61 from IRS.
Neither pay any federal tax whatsoever.
Luvcd
Luvcd   |     |   Comment #225
You tell that to the large families...no deal there. They lost on-going $4000 exemption, not a sunset provision for tax credits! Read the law...different impacts for all...read that "all!"
Ecstatic
Ecstatic   |     |   Comment #164
#154
And one can only wonder why a simple post is deleted.
newbie1
newbie1   |     |   Comment #173
My reply to your comment was deleted as well. I was surprised.
Ecstatic
Ecstatic   |     |   Comment #162
Hope everyone has a great year!
deplorable 1
deplorable 1   |     |   Comment #169
Well the 15% tax bracket will be going to 12% which represents a 20% tax cut for me. Plus doubling the standard deduction and doubling the child tax credit. This should bring me up to $4,000 a year in tax savings. Now lets compare this to the "rich" current 39.6% tax bracket going down to 37% which represents only a 6.656% tax cut for the highest earners. Not only that but there will be new caps or eliminations of many of their former tax deductions which will take most if not all of that tax cut away. Now do you still think this is a tax cut for the rich? This is actually even better than the Bush tax cuts for me when he took the 28% tax bracket down to 25% which only represented a 10.71% cut!
Ecstatic
Ecstatic   |     |   Comment #175
#169
Did you run your numbers at
calcxml.com/calculators/federal-income-tax-calculator?
Bozo
Bozo   |     |   Comment #180
Deplorable 1, yes, it will be a tax cut for you. Roughly $4000/yr, I'll concede that. The tax cut for the rich is, for the most part, already baked into the cake. Since the start of 2017, equities have gone up 20%+. On a modest portfolio of $500,000, that's $100,000. You win, we win. We just win more.
deplorable 1
deplorable 1   |     |   Comment #184
@Bozo: Hey and that's ok. In fact I'm not sure how much longer I can stay in the 15% tax bracket or excuse me the 12% bracket now. I need to max out the IRA's and HSA account or I will be going to the next bracket and have to actually pay taxes on my investments and dividends like you rich guys do. Yikes! I can't let that happen.
Bozo
Bozo   |     |   Comment #190
Deplorable 1, the rates on taxable investments aren't all that onerous. LTCGs and QDivs maintain their favored status. Indeed, some argue that paying tax while in a lower bracket (i.e, while young-ish) and going to RothIRAs and taxable investments makes perfect sense. Our LTCGs and QDivs will be taxed, on the margin, at but 15% Federal. That's much lower than even the new marginal rate for ordinary income we will face.
deplorable 1
deplorable 1   |     |   Comment #191
@Bozo: Going up to the next tax bracket won't be too bad now since it's only 22% down from 25% and 15% on non qualified investments. I still need to max out those Roth's and grow them for whatever the tax brackets of the future will be.
DOA
DOA   |     |   Comment #188
With the corporate tax rate cut permanent, but the personal
tax rate cut for most expiring at the end of year 2025, it makes me wonder what new tax rates we end up with after year 2025.
deplorable 1
deplorable 1   |     |   Comment #192
Tax rates are always scheduled to expire and/or subject to change. Even Obama extended the Bush tax cuts for the middle class. Funny how they were always called the tax cuts for the rich by Democrats until they were about to expire and Obama kept them in place because this would have placed a unfair burden on the middle class.
deplorable 1
deplorable 1   |     |   Comment #193
Now I will say I was disappointed that they cut the 39.6% bracket because those folks also will get all the other tax cuts on the way up the scale. I also thought they should have kept the personal exemption for dependents in place for at least up to 2 children. That would have been better for families just starting out. Keeping the 7 tax brackets was good because most everyone will be getting a cut now. The bill isn't perfect but it is pretty good IMO
Ecstatic
Ecstatic   |     |   Comment #198
#193
Run the numbers on calcxml with two children.
Married couple with 2 children under 17 with SS#
100K income
Std. Deductions 24K
Taxable Income 76K
Tax liability BEFORE child tax credit $8,739
Child Tax credits $4,000
TAX TO BE PAID = $4,739

I really wish people would run actual numbers.

In other tax bill related news....
AT&T announced $1000 bonuses to 200,000 employees
Wells Fargo announced minimum wage of $15/hr.
Ecstatic
Ecstatic   |     |   Comment #200
#198
Under the current tax tables tax = $7,732
kabuki
kabuki   |     |   Comment #194
THE DEMS THAT VOTED AGAINST THE TAX CIUT BILL.......they did so safely,,,,kabuki smoke and mirrors ,,,they love the tax cuts for the rich,,,BO gave in to extend the bush cuts without a fight,,,come on.....the dems are the richest people in the usa,,,,it's their wall street and the dems just love tax cuts like all the rich except they have to pretend to hate them and safely vote against them. pelosi's husband is an investment banker like so many of the dems,,,,,,,,,,there is only one party,,,,the wealth class party.
Bogie
Bogie   |     |   Comment #195
I think you got it!
deplorable 1
deplorable 1   |     |   Comment #196
Yeah I love how the Dems claim to be for the middle class yet not a single one of them would ever vote to DECREASE taxes on the middle class. It probably is just one political party with a left and right wing. Both wings certainly didn't want Trump in there that's for sure. I must confess that it puzzles me why rich liberals will vote for Democrats as they are voting against their own best interests. I voted for Trump because I knew he would save me money over Hillary who would have certainly raised my taxes(or FEES) and kept interest rates low. Romney was going to eliminate the tax on interest.............guess who I voted for?
Kaight
Kaight   |     |   Comment #211
Socialist/communists never vote in favor of lower taxation. Tax reduction does not serve the purposes of those seeking to grow government and to increase and enhance government's role in citizens' lives.
deplorable 1
deplorable 1   |     |   Comment #213
Dream on! This tax cut bill will cause stocks, the economy and interest rates to rise. The Democrats are doomed for the foreseeable future as many are just now waking up to the fact that they have been duped by Democrats for decades. It's funny watching the media trying their best to make people getting more money back in their pocket look bad as the stock market makes new highs.
Kaight
Kaight   |     |   Comment #214
For a young person, deplorable 1, you have uncommon insight. Personally, I have seen this movie at least twice before. President Kennedy's tax cuts were very beneficial to America, which is why he championed them. And of course the famous and hugely successful Reagan tax cuts are the stuff of legend. The American economy is gonna take off like a moon rocket. This is one movie you never can view too many times. MAGA!!
deplorable 1
deplorable 1   |     |   Comment #226
Thanks Kaight, My dad was a CPA and talking about money and politics was never a taboo subject growing up in my house. I went into the military @ 18 and was forced to learn fast and grow up quick. Going to various countries and and seeing first hand their standard of living compared to the U.S. was also quite educational at a young age. My guess is that a year from now we will be discussing how we never thought interest rates would be this high again and how some folks will be shocked at how good our economy is. I predict the stock market will be much higher as well. I wish everyone a Merry Christmas!
SEMPER FI SEMPER PARATUS
SEMPER FI SEMPER PARATUS   |     |   Comment #197
trump chumped mainstreet,,,,BUT HE BLOCKED THE HILDABEAST,,,like the gunslinger hired by the poor townsfolk to get rid of the clantons,,,,,HILDABEAST WOULD HAVE DECENT AMERICANS VOMITTING EVERY DAY,,,,,,and she thrives on hate as all evil doers do,,,,,BUT MIKE PENCE WOULD BE A BETTER CIC, never would have won and cannot win in 2020,,,,trump will pack the fed with vulture doves,,,,smashing the hopes of humble eggers...for this I DON'T CARE HOW HE RESIGNS AND WHY,,,,,he is the same bum i listened to on Imus back in 2000 humpin his stupid show. the reps better get CHRIS CHRISTIE IN SHAPE FOR 2020 ,,,,,he is their only hope. SEMPER FIDELIS, SEMPER PARATUS!
Tired of winning
Tired of winning   |     |   Comment #228
#227
Our $5103 tax reduction will suffice.
starve the beast
starve the beast   |     |   Comment #201
you all better read up on grover torquiest, and starve the beast strategy,,,,,THIS TAX BILL IS A STARVE THE BEAST DREAM COME TRUE,,, be,careful what you wish for if you need ss and medicare,,,how this bill will reward and punish will be found out when it is too late.
Ecstatic
Ecstatic   |     |   Comment #202
#201
His name is Grover Norquist.
deplorable 1
deplorable 1   |     |   Comment #206
I just want the money I paid into SS back sometime before I die. If it isn't too much trouble a little interest on top of it as I would have had it earning 5-6% compounding for decades now had the government not stole it from my paychecks in the first place. Medicare may have been arguably worth it but I still would have liked to have had a choice of whether or not to contribute.
Luvcd
Luvcd   |     |   Comment #207
And, under the current tax regime...85% will be subject to tax! Welcome to the world that seniors face, i.e. reality!
Ecstatic
Ecstatic   |     |   Comment #203
Here it is....
http://taxplancalculator.com/
Rosedala
Rosedala   |     |   Comment #208
How to find the new comments not placed by date or comment number? Thanx.
Ecstatic
Ecstatic   |     |   Comment #222
Signed, sealed and delivered. Amen.
Nothing
Nothing   |     |   Comment #230
Perhaps I missed it. Who when alternate std deduction and itemized deductions? With the higher std deduction AND, most importantly, being a cash basis taxpayer, why not alternate years?

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