New Tax Plan

aaflygirl | Sep 28, 2017 | 87 posts since 2016

Do you think people understand that MFJ that don't itemize are currently getting $20800 in deductions (std deduction + personal exemptions)? The new tax plan is giving them $24000. I keep hearing that the new plan is "doubling" their deduction. The $3200 difference is a far cry from doubling their deductions. There will be no incentive to own a home and pay property tax and mortgage interest on it if the new plan passes. Am I missing something here? Plus, they refuse to release any tax brackets...makes me very suspicious. How can you back a new tax plan if they are not releasing the numbers?

So, if MFJ own a home or have 1 child, they become a loser with the new tax plan. Are my numbers correct?

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Answers

Ally6770 | Sep 29, 2017 | 4,293 posts since 2010

Despite repeated promises from Republican lawmakers that the plan is designed to provide relief to the middle class, nearly 30 percent of taxpayers with incomes between $50,000 and $150,000 would see a tax increase, according to the study by the Urban-Brookings Tax Policy Center. The majority of households that made between $150,000 and $300,000 would see a tax increase. To see your estimated tax break look at your bracket within the article.
Bottom 20% would get $50 a year--2nd 20% would get $230 a year--3rd 20% would get $420 per year--4th 20% would get $450 a year and the highest 20% would get $10,610 a year with the top 1% getting $207,610 and the 0.1% would get $1,022,220 a year tax break.

https://www.washingtonpost.com/news/wonk/wp/2017/09/29/gop-tax-plan-would-provide-major-gains-for-richest-1-percent-and-uneven-benefits-for-the-middle-class-report-says/?deferJs=true&outputType=default-article&utm_term=.dedf54b04213&wpisrc=al_alert-COMBO-econ%2Bpolitics%2Bnation&wpmk=1

Bozo | Sep 30, 2017 | 1,375 posts since 2011

Aaflygirl, this was, indeed, a horrid week for the tax plan's roll-out. First, Gary Cohn stepped on his foot at the press conference when he opined that an average middle-class family would see a $1000 tax break, with which they could pay for a kitchen remodel or a new car. When pressed with whether some middle-class folks might actually pay higher taxes, he replied "it depends"*. Second, the optics of the Tom Price fiasco. Third, Rep. John Faso (R-New York), signaling his opposition to any tax plan which abolished the state and local tax deduction.

We need tax reform, of that there is little dispute. Tossing out a half-baked, ill-advised, set of mathematically-challenged bullet points does not advance the cause of tax reform.

*Mind you, Gary Cohn is a Goldman, Sachs alum. He's a numbers guy, a detail man. Were I Mr. Cohn, I'd be looking out for the next bus; when this fiasco of a tax plan flops, he will most assuredly find himself under it.

Anon456 | Sep 30, 2017 | 249 posts since 2011

TRUMP claims it is for the middle class, but it very clear that the major winners are the upper end of the tax payers. AND he does not benefit. - - Yeah, right. If he eliminates the Estate Tax, it benefit those with Estate already greater than $5M. .... Is that you??

Kirkland | Sep 30, 2017 | 374 posts since 2014

yes your numbers are correct as i am pretty sure the plan gets rid of all exemptions (which in 2016 was $4050 per person). It seems like the new tax plan is meant to penalize those that have children :(

Bozo | Sep 30, 2017 | 1,375 posts since 2011

Kirkland, eliminating the personal exemption is clearly political. Mind you, I'm a Republican, but this is laughable. Winners: childless Republicans. Losers: Democrat Catholics, and Republican Mormons.. With many kids. Seriously, does this make sense?

Bozo | Sep 30, 2017 | 1,375 posts since 2011

The law clearly has unintended consequences, which is why it is doomed to failure.

Ginzy | Sep 30, 2017 | 24 posts since 2017

So my question becomes where do we start? Obviously all legislation gets tweaked as it goes through committee. Many times it may not even resemble the original. Remember when we were told during the Obamacare fiasco, "We have to pass it before we can read it," statement. If Congress would begin the process of working together maybe just maybe something good could come out of this.

As for personal exemptions Bozo, since when is it the Governments job of subsidizing taxpayers who have large families through such exemptions. Shouldn' t those having children take the responsibility upon themselves to bear the financial burden associated with having many children. If the tax burden placed on the citizenry was fair, and by that I don't mean the dollar figure quoted by ally6770, but perhaps more of a percentage of income across the board then all of these deductions, loopholes, exemptions might not be missed.

I truly am getting weary of the class warfare constantly being thrown out there as if this is a zero sum game. The greatest thing about this Country is that capitalism has allowed the creation of wealth. A dollar earned.by one man does not yank it out of the pocket of another, it allows anyone who wants to work hard to accumulate wealth in spite of where they started.out. We should celebrate this success. Would it be better to return to the caste system of bygone days? If my neighbor runs a business and employs many people and wants to drive a cadillac good for him. If I on the other hand, choose to live a simpler life and drive a Ford, why would I be envious of my neighbors hard work ethic. Many multi-millionaires start out with an idea and a few bucks, they took on the risk of failure or success,in the process usually giving others an opportunity for employment. Why all this bashing and class envy, another divisive ruse from the left. So tired of the rhetoric. This Country has strayed so far from what used to be the basic values it is hard to recognize. Sad state of affairs.

Bozo | Sep 30, 2017 | 1,375 posts since 2011

Ginzy, where we might start is with a discussion of a national "consumption" tax, on goods and services, much like a VAT, or Hawaii's combo sales and excise tax. Hard to dodge or game, easy to collect. Encourages saving. That said, the regressive nature of such a tax would probably doom it (even though a similar tax structure works in Hawaii, a deeply blue state).

Another wrinkle would be how such a tax could accommodate folks who are spending monies which have already been taxed. I'm not suggesting it's an easy lift. But perhaps a discussion is appropriate.

Ally6770 | Oct 1, 2017 | 4,293 posts since 2010

When I grew up in the 50's and worked in a grocery store at 15 we had overtime, health benefits, etc. Even our birthday was a holiday and if we worked it then it was treated like a holiday and we were paid triple time. Sundays are no longer double time for anyone. Who gets paid for not working on their birthday. Who even has healthcare benefits paid 100% by their company. When we were paid minimum wage a family of three could live at the poverty level and survive. No longer is any of this true. At 17 I had 35% of first down payment of our house that we purchased when I was 19. We were able to pay it off in 6 years. Rarely can people do that now. THAT IS HOW WE WERE ABLE TO GET AHEAD.

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