Tax Rates

[Ben]

This is the first I've seen regarding $$$ attached to the GOP tax rates.

Looks like for me, I will have to work on staying under $57K gross to eek under $45K AGI and get that 12% rate at the standard deduction. I haven't seen anything yet on limitations on itemizing. Itemizing might still work better for me than that $12K standard deduction. 

I already had plans in the works to stay under $48K AGI because of capital gains and dividends. Though I don't know if they are going to be mucking with those to "help pay" for their tax cuts. That would piss me off, because that's a good chunk of my retirement income.

I still don't know what I think of this plan overall. I have a bit of schadenfreude regarding the limiting of state and local deductions even though it will affect me. FU CA. Plus it has been fun watching Peter King whine like a baby about New York. 

http://www.foxbusiness.com/features/2017/11/02/gop-tax-bill-here-is-look-at-new-brackets.html

[charby]

If it happens my tax bill will go down to the feds. $24K joint deduction is a lot more than what I currently itemize.

Joys of living in a place with lower property taxes... etc.

[Ben]

Part of standard vs itemized for me will fall heavily on if they make any improvements to medical expenses deductions, which are crap right now. With the worthless Rs dropping the ball on health care, I'll  be paying nearly ten grand next year just on health insurance. If all that was deductible, along with other stuff I can deduct, I could do a lot better itemizing than taking the standard.

[Perd Hapley]

https://twitchy.com/samj-3930/2017/11/02/oopsie-wapo-gives-democrats-4-pinocchios-for-hasty-talking-point-about-gop-tax-plan/

[DittoHead]

Part of standard vs itemized for me will fall heavily on if they make any improvements to medical expenses deductions, which are crap right now.

Assuming this is accurate, this plan includes the elimination of student loan and medical expense deductions and the adoption tax credit.

[charby]

If this happens, may cause people to flee the higher property tax/housing/income tax states to ones that are lower.

[Ben]

Assuming this is accurate, this plan includes the elimination of student loan and medical expense deductions and the adoption tax credit.

Holy crap that will piss me off. The party of affordable health care are making health care more expensive, not less expensive. I'm pissed off as a healthy guy that sees the doctor once a year. I can't imagine how pissed that will make someone with cancer.

[RoadKingLarry]

On first pass this may drop me into the 25% bracket.
Maybe not so great for me.

[Scout26]

I was sooooo hoping the would kill the 10% income threshold to deduct medical expenses.  Those should deductible from the first dollar.  That would be another nail in the Obamacare coffin.


Overall it looks good.  It's definitely a step in the right direction, not great, but a step.

[Kingcreek]

Never underestimate the republicans potential to F it up
(with the democrats help of course).

[RevDisk]

My tax bracket is staying the same. Standard dedication goes up a bit, but it's not a huge win because I'm not married. But I lose the local/state tax deduction, but the property tax thing works for me. So mild win.

This was clearly written for donor class, rather than middle class. Thankfully they did not gut 401k's. Probably because it would have lost them the next election, plus the kickbacks from financial companies. Definitely kicking young voters with college debt and sick folks.

Oh, and of course, it's to be financed by incredibly stupid "borrow and spend" rather than the stupid but more financially responsible "tax and spend".

[slingshot]

If it happens my tax bill will go down to the feds. $24K joint deduction is a lot more than what I currently itemize.

Joys of living in a place with lower property taxes... etc.

Mine too.  It is not worth it for me to itemize now.  The biggie for me was sales tax deduction (actual if you save your receipts) and interest paid deductions and that ended years ago.  From what I know, I can't imagine how the rank and file (aka middle and lower income classes) won't support this.  I got a kick out of Schumer who said that the rich get a disprotionate reduction in federal tax relative to he lower income folks.  I had to laugh but the guy said it and I think he believes it. The dem's will find a way not to support this because it's what Trump wants.  Trump wanted a 3 tier rate system and the Republicans came up with four.

[grampster]

Apparently there is a little tidbit in there that imposes a 6% surtax in addition to the 39.6% on incomes over a million in income.  To be paid until the goobermint gets back all the revenue that it "lost" due to the other changes in the tax code.  I guess that's to pacify the Democrats and RINOs.  Not sure how they'll keep track of that.  Getting rid of the Alt Min Tax is a boon for those making a decent living on wages.

Since I retired from my job and also from the goobermint boards I served on for which I was paid per diems, I can short form our federal taxes.  We have no deductions other than property tax which in W. Michigan isn't too bad...$3000 a year.  So that gives us an additional 12 grand off and we're safely in the 12% bracket.  I paid around 14.5% last year, so I guess we will win if it actually becomes law as it will be 12% on a lower taxable income.  Anyone in our situation with an income below the 25% bracket should do well.

Here's the thing about retirees and taxes.  Most retirees are not accumulating wealth any more.  We are spending what we accumulated plus our pensions and SS.  Pure and simple keeping that wealth going directly into the economy without government skimming a good deal of it first.  At the moment the retired portion of the population is substantial...and will be for a few more years.  Thus the economy should be fired up and the government should get their mitts on all the money they think they'll lose.

[charby]

I'm concerned about the expiration of inheritance taxes. I can understand a no taxes on inheritances below $5M because that should cover most farms and small businesses. To expire the inheritance tax may lead to aristocratic class, maybe if the 1% had a less percentage of the wealth but why encourage more money to be in the hands of so few?

[TommyGunn]

I'm concerned about the expiration of inheritance taxes. I can understand a no taxes on inheritances below $5M because that should cover most farms and small businesses. To expire the inheritance tax may lead to aristocratic class, maybe if the 1% had a less percentage of the wealth but why encourage more money to be in the hands of so few?

Many small businesses ARE  being hurt due to the inheritance tax.
Why is it the government's  responsibility to socially engineer money  from those who have worked their butts off all their lives  to earn,  to give the $$$  to others'?  
If you're worried about a "aristocratic class,"  .... too late,  it's here.  

[charby]

Many small businesses ARE  being hurt due to the inheritance tax.
Why is it the government's  responsibility to socially engineer money  from those who have worked their butts off all their lives  to earn,  to give the $$$  to others'?  
If you're worried about a "aristocratic class,"  .... too late,  it's here.  

Then I guess prepare for a real class warfare then, be like the early 20th century all over again.

[slingshot]

I'm concerned about the expiration of inheritance taxes. I can understand a no taxes on inheritances below $5M because that should cover most farms and small businesses. To expire the inheritance tax may lead to aristocratic class, maybe if the 1% had a less percentage of the wealth but why encourage more money to be in the hands of so few?

From my point of view, the aristocratic class already exists.  I hear tales in my area of the rich essentially arranging money between "money families" to keep the wealth concentrated rather than being spread out with many children or heirs.

I have not been able to claim a medical deduction in years.  But if you are low income, 10% of a smaller amount is not a huge hurdle to reach.  I think they should have eliminated that 10% business years ago.  With the increase in the standard deduction, the trend is to essentially make the deduction for mortgage interest and state and local taxes to be mute.  The rich still enjoy the deduction.  I think second homes interest (mortgage interest) should not be deductible at all. It clearly favors the rich.

The simplification of the tax code will hurt the tax preparation industry.  I would like to see it even simpler. 

[charby]

From my point of view, the aristocratic class already exists.  I hear tales in my area of the rich essentially arranging money between "money families" to keep the wealth concentrated rather than being spread out with many children or heirs.

I have not been able to claim a medical deduction in years.  But if you are low income, 10% of a smaller amount is not a huge hurdle to reach.  I think they should have eliminated that 10% business years ago.  With the increase in the standard deduction, the trend is to essentially make the deduction for mortgage interest and state and local taxes to be mute.  The rich still enjoy the deduction.  I think second homes interest (mortgage interest) should not be deductible at all. It clearly favors the rich.

The simplification of the tax code will hurt the tax preparation industry.  I would like to see it even simpler. 

It's happening here with people buying up farm ground, whether is be a actual farmers (Family Farms Corps) buying more ground to keep from showing profit or people buying it to put in a trust and have perpetual income for them and heirs via trusts. It's a real bitch to buy land if you want to farm.

[Scout26]

From my point of view, the aristocratic class already exists.  I hear tales in my area of the rich essentially arranging money between "money families" to keep the wealth concentrated rather than being spread out with many children or heirs.

I have not been able to claim a medical deduction in years.  But if you are low income, 10% of a smaller amount is not a huge hurdle to reach.  I think they should have eliminated that 10% business years ago.  With the increase in the standard deduction, the trend is to essentially make the deduction for mortgage interest and state and local taxes to be mute.  The rich still enjoy the deduction.  I think second homes interest (mortgage interest) should not be deductible at all. It clearly favors the rich.

The simplification of the tax code will hurt the tax preparation industry.  I would like to see it even simpler. 

As someone who works in the tax preparation industry, kill us off.

Until Obamacare the medical deduction hurdle was 2.5% of income, the first year of O-care was 5% then 10% every year after that.  THANKS OBAMA !!

[Nick1911]

It's happening here with people buying up farm ground, whether is be a actual farmers (Family Farms Corps) buying more ground to keep from showing profit or people buying it to put in a trust and have perpetual income for them and heirs via trusts. It's a real bitch to buy land if you want to farm.

This is something I've pondered on myself - same kind of thing with residential real estate, where an influx of money by people using housing as an investment product causes values to be inflated.  Which sticks it to people who are buying houses to meet the basic necessity of shelter.

[charby]

This is something I've pondered on myself - same kind of thing with residential real estate, where an influx of money by people using housing as an investment product causes values to be inflated.  Which sticks it to people who are buying houses to meet the basic necessity of shelter.

History repeating itself.

[Scout26]

It's happening here with people buying up farm ground, whether is be a actual farmers (Family Farms Corps) buying more ground to keep from showing profit or people buying it to put in a trust and have perpetual income for them and heirs via trusts. It's a real bitch to buy land if you want to farm.

Yes, and the problem is at the beginning of your statement "..to keep from showing a profit..".  See it's government incentives/disincentives that drive that.  So since it's your ox being gored, you want the "rich" to be tax at their time of death to make their heirs sell land (usually at fire sale prices), so that you can buy some. 

This bill, if passed, will probably reduce the number of people needing pro tax services (my ox), yet I want them to go to a flat tax (the "You made X, multiply that times Y, then send that in) post card return, which would kill my industry and my job.  I WANT THEM TO DO THAT !!!

[charby]

Yes, and the problem is at the beginning of your statement "..to keep from showing a profit..".  See it's government incentives/disincentives that drive that.  So since it's your ox being gored, you want the "rich" to be tax at their time of death to make their heirs sell land (usually at fire sale prices), so that you can buy some. 

This bill, if passed, will probably reduce the number of people needing pro tax services (my ox), yet I want them to go to a flat tax (the "You made X, multiply that times Y, then send that in) post card return, which would kill my industry and my job.  I WANT THEM TO DO THAT !!!

I'd be totally cool with a flat tax % and no deductions other than a standard deduction for single and standard deduction for joint. Capital gains are taxed as normal income. Drop the income cap on SSN and double the quarters. Inheritance=income also.

[MillCreek]

This is something I've pondered on myself - same kind of thing with residential real estate, where an influx of money by people using housing as an investment product causes values to be inflated.  Which sticks it to people who are buying houses to meet the basic necessity of shelter.

Seattle real estate is the very definition of this these days: investors from the People's Republic of China buying up houses, primarily as investments, secondarily as a way to have a foot in the States in case of political upheaval in the PRC.  In some cases, they have a child or two stay in the house while going to college in the States.

[slingshot]

I favor the flat tax as well overall.  The progressive tax structure is too open for abuse or what I consider abuse.