Posted by Mike Sneller on Fri, Nov 3, 2017, at 11:59 AM:
At long last, the Republicans have introduced a bill "reforming" the tax code.
Individual taxes:
Increases standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
*I guess this is OK, not sure what the point is, but it will definitely help low-to-middle income taxpayers who don't itemize, so that's a good thing
Individual tax rate brackets:
25 percent rate starting at $90,000 for married couples, $45,000 for individuals (everyone below that pays a 12 percent rate).
35 percent rate starting at $260,000 for married couples, $200,000 for individuals.
39.6 percent rate starting at $1 million for married couples, $500,000 for individuals.
*That's a tax increase for people making less the about $19,000 and a tax cut for people making $19,000 to $90,000. No change for $90,000 to about $150,000. A tax cut from $150,000 to about $233,000 and then a HUGE cut from $233,000 to $260,000. $260,000 to $470,000 is the same, and then another cut for $470,000 to $1,000,000. People over $1,000,000 is the same. (I used estimates and married filing jointly).
I think there should be another bracket about $10,000,000 of 45% and I definitely don't like the increase for the poorest taxpayers. I like the tax cut for the middle class, but don't like the the $90-150,000 range is unchanged. I'd keep the 25% up to $150,000.
Expands the Child Tax Credit from $1,000 to $1,600 and provides a credit of $300 for each parent and non-child dependent.
*I don't see the point in this, but OK.
Makes no changes to deductions for charitable contributions.
*Good.
Elimination of student loan and medical expense deductions and the adoption tax credit.
*Here's the where the middle class will be most affected. Student loan debt is already a problem in our country. Not allowing a deduction for student loan interest is a big middle class tax increase.
Doesn't change contribution rules for 401(k)s.
*Good.
Repeals the state and local tax deduction, but people can write off the cost of state and local property taxes up to $10,000.
*Another middle class tax increase. While it will affect the rich, too, it will have a proportionately larger impact on the middle class, who do not as many other deductions.
Repeals the Alternative Minimum Tax.
*This is the big deal. This is the main reason why the plan could rightly be called a tax cut for the wealthy. The AMT is a large portion of the income tax the wealthy pay. That's the one thing we learned from the small part of the 2005 Trump tax return. 80% of the tax he paid was AMT. AMT brought his effective rate from 11% to about 25%.
Huge.
Doubles the estate tax exemption immediately and repeals the tax in six years.
*More tax cuts for the rich. I'd favor raising the exemption amount and creating a farm exemption as well, but getting rid of it entirely is pointless, except to further allow capital to stay in the hands of the very few.
Business taxes:
Lowers corporate tax rate to 20%
Too high; get rid of it entirely and increase the individual tax rate.
and lowers rate for pass-through entities (often small businesses that report taxes as individuals) to 25%.
And another tax cut for the wealthy, and one that will especially benefit the Trump family. A large part of the Trumps' business is set up as pass-through entities, meaning their partnership income over $1,000,000 won't be taxed at 39.6%, but at 25%. This will only benefit taxpayers (married couples) making more than $260,000. Anyone making less than that will see no change. I'm curious how the bill is worded, this summary makes it seem like ALL pass through income is 25%, which would be higher tax on people making less than $90,000 so I hope that's not the case.
Obviously, it's much more complex, but those are some of the highlights.
Other thoughts?
Replies (3)
* 17% for Corporate
* 57% for Middle
* 17% for infrastructure
* 7% for security
* 2% for education
* cut interest rate by 1%
* Leave all deductions as is for now
-- Posted by Rick Scaggs on Fri, Nov 3, 2017, at 2:25 PM
* 17% for Corporate
* 57% for Middle
* 17% for Healthcare
* 7% for Infrastructure
* 2% for Security
* cut interest rate by 1%
* Leave all deductions as is for now
* Cut spending
-- Posted by Rick Scaggs on Fri, Nov 3, 2017, at 5:23 PM
It's nice to see tax cuts but as most conservatives believe you have to cut the spending. REALLY cut it.
What I would like to see will never happen. Calculate how much revenue you need, set a flat rate and collect it off the top of income. You could have progressive rates to collect what you need but simplify it! Get rid of all deductions, etc. I know that would be tough for businesses though.
I have read several studies and the number that is bandied about is around $900 BILLION. That's how much we spend each year at every level collecting and paying taxes. Not the amount of taxes, just the process of collecting it due to all the complexities. Set a flat rate to get you $4 trillion in taxes and you'll likely save nearly $1 TRILLION just through simplification.
My two cents.
-- Posted by Doug Williams 4/24 on Sat, Nov 4, 2017, at 9:49 AM
Menu
At long last, the Republicans have introduced a bill "reforming" the tax code.
Individual taxes:
Increases standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
*I guess this is OK, not sure what the point is, but it will definitely help low-to-middle income taxpayers who don't itemize, so that's a good thing
Individual tax rate brackets:
25 percent rate starting at $90,000 for married couples, $45,000 for individuals (everyone below that pays a 12 percent rate).
35 percent rate starting at $260,000 for married couples, $200,000 for individuals.
39.6 percent rate starting at $1 million for married couples, $500,000 for individuals.
*That's a tax increase for people making less the about $19,000 and a tax cut for people making $19,000 to $90,000. No change for $90,000 to about $150,000. A tax cut from $150,000 to about $233,000 and then a HUGE cut from $233,000 to $260,000. $260,000 to $470,000 is the same, and then another cut for $470,000 to $1,000,000. People over $1,000,000 is the same. (I used estimates and married filing jointly).
I think there should be another bracket about $10,000,000 of 45% and I definitely don't like the increase for the poorest taxpayers. I like the tax cut for the middle class, but don't like the the $90-150,000 range is unchanged. I'd keep the 25% up to $150,000.
Expands the Child Tax Credit from $1,000 to $1,600 and provides a credit of $300 for each parent and non-child dependent.
*I don't see the point in this, but OK.
Makes no changes to deductions for charitable contributions.
*Good.
Elimination of student loan and medical expense deductions and the adoption tax credit.
*Here's the where the middle class will be most affected. Student loan debt is already a problem in our country. Not allowing a deduction for student loan interest is a big middle class tax increase.
Doesn't change contribution rules for 401(k)s.
*Good.
Repeals the state and local tax deduction, but people can write off the cost of state and local property taxes up to $10,000.
*Another middle class tax increase. While it will affect the rich, too, it will have a proportionately larger impact on the middle class, who do not as many other deductions.
Repeals the Alternative Minimum Tax.
*This is the big deal. This is the main reason why the plan could rightly be called a tax cut for the wealthy. The AMT is a large portion of the income tax the wealthy pay. That's the one thing we learned from the small part of the 2005 Trump tax return. 80% of the tax he paid was AMT. AMT brought his effective rate from 11% to about 25%.
Huge.
Doubles the estate tax exemption immediately and repeals the tax in six years.
*More tax cuts for the rich. I'd favor raising the exemption amount and creating a farm exemption as well, but getting rid of it entirely is pointless, except to further allow capital to stay in the hands of the very few.
Business taxes:
Lowers corporate tax rate to 20%
Too high; get rid of it entirely and increase the individual tax rate.
and lowers rate for pass-through entities (often small businesses that report taxes as individuals) to 25%.
And another tax cut for the wealthy, and one that will especially benefit the Trump family. A large part of the Trumps' business is set up as pass-through entities, meaning their partnership income over $1,000,000 won't be taxed at 39.6%, but at 25%. This will only benefit taxpayers (married couples) making more than $260,000. Anyone making less than that will see no change. I'm curious how the bill is worded, this summary makes it seem like ALL pass through income is 25%, which would be higher tax on people making less than $90,000 so I hope that's not the case.
Obviously, it's much more complex, but those are some of the highlights.
Other thoughts?
Replies (3)