Poll

Are you in favor of the standard deduction increasing to $24,000?

Yes
No
Maybe.  I own a home and donate a decent amount and now there is little tax incentive to do so.

Author Topic: Proposed increase of standard deduction to $24,000 - your thoughts?  (Read 4397 times)

JLee

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #50 on: October 02, 2017, 06:34:16 PM »
Generally speaking, the high COL states are already subsidizing the rest.

Let's not do this. The HCOL states have far more of the very rich, which disproportionately pay more in Federal income tax. In a system where 0.1% of the population pays more than the bottom 80% in raw numbers of course any state with a higher relative population of high income earners is going to pay more taxes than others!

A drawn out flawed analysis that ignores everything from low and high services states, Federal lands (which pay no state taxes and Federal money spent there is considered "welfare" in this "study"), the military, Native American reservations, the elderly (the "study" counted Social Security as welfare), Federal pensioners (the "study" counted Federal pensions as "welfare"), to how many miles of interstate vary per person from high to low population states (Montana is SOL in this one), and many many other over-sites for the sake of what is blatant political pandering is really not needed to state what is glaringly the obvious.

While that may be true, the claim that we should be using money that's had income taxes paid on it to pay other income taxes, otherwise it's a "subsidy," is a bit of a stretch, don't you think?

zolotiyeruki

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #51 on: October 02, 2017, 08:26:25 PM »
Generally speaking, the high COL states are already subsidizing the rest.

Let's not do this. The HCOL states have far more of the very rich, which disproportionately pay more in Federal income tax. In a system where 0.1% of the population pays more than the bottom 80% in raw numbers of course any state with a higher relative population of high income earners is going to pay more taxes than others!

A drawn out flawed analysis that ignores everything from low and high services states, Federal lands (which pay no state taxes and Federal money spent there is considered "welfare" in this "study"), the military, Native American reservations, the elderly (the "study" counted Social Security as welfare), Federal pensioners (the "study" counted Federal pensions as "welfare"), to how many miles of interstate vary per person from high to low population states (Montana is SOL in this one), and many many other over-sites for the sake of what is blatant political pandering is really not needed to state what is glaringly the obvious.

While that may be true, the claim that we should be using money that's had income taxes paid on it to pay other income taxes, otherwise it's a "subsidy," is a bit of a stretch, don't you think?
Semantics aside, the net effect is the same--the state income tax deduction reduces the penalty states would pay (in terms of competitiveness) for having a higher tax rate, therefore benefiting them over states with lower tax rates.

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #52 on: October 02, 2017, 10:20:36 PM »
I'd be more worried about what they are taking away, and not what they claim to be giving me.

I'd lose. I have losses that I would not be able to deduct if they make changes to the code.

acroy

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #53 on: October 03, 2017, 11:26:50 AM »
I'm in favor of any kind of tax cut.

That said, I'm more in favor of
1) ending convoluted tax schemes as 'incentives' to do what big Brother has decided is good for you (pretty sick when you think about it) 
2) ending incoming tax, because it is a tax on creation/productivity (again, sick and bass-ackwards)

You believe that a consumption tax would be better?

The problem with consumption taxes is that there needs to be a good distinction between needs and luxuries. It can get a little messy for the poor if you start doing that without reasonable distinctions. Right now those differences are a bit arbitrary.
Yes in favor of consumption tax.
No, not necessary to distinguish between needs and luxuries. This pre-supposes the poor should pay no tax. I do not make that assumption.
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RidetheRain

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #54 on: October 03, 2017, 11:35:08 AM »
I'm in favor of any kind of tax cut.

That said, I'm more in favor of
1) ending convoluted tax schemes as 'incentives' to do what big Brother has decided is good for you (pretty sick when you think about it) 
2) ending incoming tax, because it is a tax on creation/productivity (again, sick and bass-ackwards)

You believe that a consumption tax would be better?

The problem with consumption taxes is that there needs to be a good distinction between needs and luxuries. It can get a little messy for the poor if you start doing that without reasonable distinctions. Right now those differences are a bit arbitrary.
Yes in favor of consumption tax.
No, not necessary to distinguish between needs and luxuries. This pre-supposes the poor should pay no tax. I do not make that assumption.

It seems a little silly to tax people who will get those dollars back through welfare. Easier maybe, but tax levels already exist for luxuries vs needs. That's why my groceries don't have as much tax as McDonald's. It's not that they should pay no taxes. It's that maybe you should get taxed at a higher rate for your plasma TV vs your first X kWh of electricity.
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GuitarStv

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #55 on: October 03, 2017, 11:36:36 AM »
I'm in favor of any kind of tax cut.

That said, I'm more in favor of
1) ending convoluted tax schemes as 'incentives' to do what big Brother has decided is good for you (pretty sick when you think about it) 
2) ending incoming tax, because it is a tax on creation/productivity (again, sick and bass-ackwards)

You believe that a consumption tax would be better?

The problem with consumption taxes is that there needs to be a good distinction between needs and luxuries. It can get a little messy for the poor if you start doing that without reasonable distinctions. Right now those differences are a bit arbitrary.
Yes in favor of consumption tax.
No, not necessary to distinguish between needs and luxuries. This pre-supposes the poor should pay no tax. I do not make that assumption.
So you believe that the poor should pay a higher percentage of their income in taxes than the rich?  That is the effect of a consumption tax typically is it not?

zolotiyeruki

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #56 on: October 03, 2017, 12:04:29 PM »
I'm in favor of any kind of tax cut.

That said, I'm more in favor of
1) ending convoluted tax schemes as 'incentives' to do what big Brother has decided is good for you (pretty sick when you think about it) 
2) ending incoming tax, because it is a tax on creation/productivity (again, sick and bass-ackwards)

You believe that a consumption tax would be better?

The problem with consumption taxes is that there needs to be a good distinction between needs and luxuries. It can get a little messy for the poor if you start doing that without reasonable distinctions. Right now those differences are a bit arbitrary.
Yes in favor of consumption tax.
No, not necessary to distinguish between needs and luxuries. This pre-supposes the poor should pay no tax. I do not make that assumption.
So you believe that the poor should pay a higher percentage of their income in taxes than the rich?  That is the effect of a consumption tax typically is it not?
That's a common misunderstanding of the concept, for two reasons:
1) Consumption != income.  It doesn't matter what your income is, only what your spending is.  The poor pay 25% (or whatever the rate is) consumption tax on their necessities, the rich pay 25% on their necessities and on their yachts.  If you earn $1000 and spend it, you pay $250 in VAT.  If you invest it and it grows to $10,000 before you use it to buy a new car, you pay $2,500 on it.
2) Most proposals include an exemption for the first $x,000 of spending, or include some standard $X,000/year allowance, and thus are effectively progressive.

GuitarStv

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #57 on: October 03, 2017, 12:14:03 PM »
I'm in favor of any kind of tax cut.

That said, I'm more in favor of
1) ending convoluted tax schemes as 'incentives' to do what big Brother has decided is good for you (pretty sick when you think about it) 
2) ending incoming tax, because it is a tax on creation/productivity (again, sick and bass-ackwards)

You believe that a consumption tax would be better?

The problem with consumption taxes is that there needs to be a good distinction between needs and luxuries. It can get a little messy for the poor if you start doing that without reasonable distinctions. Right now those differences are a bit arbitrary.
Yes in favor of consumption tax.
No, not necessary to distinguish between needs and luxuries. This pre-supposes the poor should pay no tax. I do not make that assumption.
So you believe that the poor should pay a higher percentage of their income in taxes than the rich?  That is the effect of a consumption tax typically is it not?
That's a common misunderstanding of the concept, for two reasons:
1) Consumption != income.  It doesn't matter what your income is, only what your spending is.  The poor pay 25% (or whatever the rate is) consumption tax on their necessities, the rich pay 25% on their necessities and on their yachts.  If you earn $1000 and spend it, you pay $250 in VAT.  If you invest it and it grows to $10,000 before you use it to buy a new car, you pay $2,500 on it.
2) Most proposals include an exemption for the first $x,000 of spending, or include some standard $X,000/year allowance, and thus are effectively progressive.

1)
I didn't say that consumption equaled income.

I said that the poor pay a higher percentage of their income in taxes than the rich under a consumption tax.  We can take all frivolous spending out of the equation right away - there is a base amount of money that it costs to live . . . you need money for shelter, for food, for clothing.  A rich person needs as much of these as a poor person, so these costs are constant between the two.  Therefore, the poor always need to pay a higher percentage of tax when compared to income than the rich to live under this method of taxation.



2)
Sure, and this is a reasonable attempt to make up for the otherwise obvious unfairness of a consumption tax.  Acroy said that he doesn't believe in doing this though, so I was trying to gauge his reasoning for something that doesn't make much sense to me.

zolotiyeruki

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #58 on: October 03, 2017, 02:34:20 PM »
1) I didn't say that consumption equaled income.

I said that the poor pay a higher percentage of their income in taxes than the rich under a consumption tax.  We can take all frivolous spending out of the equation right away - there is a base amount of money that it costs to live . . . you need money for shelter, for food, for clothing.  A rich person needs as much of these as a poor person, so these costs are constant between the two.  Therefore, the poor always need to pay a higher percentage of tax when compared to income than the rich to live under this method of taxation.

2)Sure, and this is a reasonable attempt to make up for the otherwise obvious unfairness of a consumption tax.  Acroy said that he doesn't believe in doing this though, so I was trying to gauge his reasoning for something that doesn't make much sense to me.
I apologize if I didn't make my point clear enough.  A straight consumption tax is perfectly fair in itself, IMO.  The way I see it is this:  you can have all the money in the world, but it doesn't actually benefit you until you spend it, whether it be on food, rent, an iPhone or a yacht.  So a guy making $1MM/year and spending $50k is only taxed on the $50k he spends, just like a guy making $50k and spending every cent.  The $1MM guy isn't escaping taxes on the $950k by not spending, he's only deferring those taxes until he *does* spend it.  Comparing the tax paid to the taxpayer's income becomes completely irrelevant.


ixtap

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #59 on: October 03, 2017, 02:39:51 PM »
I call bullshit. There are numerous benefits to having money in the bank or brokerage account. Economically, it gives me leverage to make best choices.

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #60 on: October 03, 2017, 03:06:26 PM »
I agree with the increased standard deduction. The standard deduction should be equal to and reflect the median cost of living across the country. Example: if housing, transportation, and food cost the median maried couple 24k per year then this should be the standard deduction. This should be increased for each child for the median cost of childcare. The standard deduction should be updated each year based on inflation/deflation.

Get rid of all other tax writeoffs that are not business related. Example: no state tax deduction, no mortgage interest deduction, charitable contribution deduction etc.   

Individuals should be taxed on income. This whole VAT flat tax argument is regressive because someone earning 30k/yr is going to be spending a much higher proportion of their total income than someone making 300k. Exemptions on the first $X of spending would work but is difficult to track unless you want to go to a cashless system where all spending is monitored which is a little too big brother for my liking. Not to mention, the super rich will go to another country to buy their expensive toys VAT free.

This new tax plan with three tax brackets being sold as a tax cut for the middle class is a farse. Say the new top 35% tax bracket is for 200k+ in income. Why on earth do we put a successful lawyer and a CEO making 3M/yr in the same tax bracket? The 7 brackets we have now already stop far to early on the income continuum and tax those at the very top the same as successful professionals. A reduction to 3 brackets just cuts the taxes for those at the top even further.

gerardc

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #61 on: October 03, 2017, 05:10:32 PM »
Disadvantages of consumption tax:

- Logistics: how do you accurately track what each person spends every year (which is necessary for progressive taxation)? especially tricky with cash transactions. Can you ask your poor brother to buy something for you with your money?
- If you save money, then move to another country to spend it, you pay almost no tax.

In summary, consumption tax may make sense in theory, but is too impractical to implement robustly.

Finances_With_Purpose

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #62 on: October 03, 2017, 09:29:46 PM »
I'd like to see the details first, but from the reporting, it looks like I'm all for it.  I like plans that incentivize people to work by minimizing the taxes they pay on their initial income.

It also seems to eliminate some of the complication of taxes (AMT, anyone?). 

I'll have to wait and see how it affects me personally - I suspect it'll help now, then hurt later on, and probably end up close to neutral.  I'm pleased that they retained 401k exemptions, as it'll continue to incentivize saving.  All else equal, I'm in favor of incentives to save, especially for folks in the low/middle income brackets.  God knows we need more incentive to save in this country - the median retirement savings is around $3,000.

I also like the potential stimulating impact of dropping the corporate tax rate - there are billions of corporate dollars to be repatriated and deployed more effectively here - which could be massively beneficial to the economy. 

I've stated this elsewhere on here, but my guess is that Trump's team will go all-in on some version of this tax plan in hopes it'll stave off a recession (and stave off electoral defeats).  And if it does, by boosting the economy, then more power to them.

Some are skeptical because it drops the mortgage interest deduction, but all else equal, I would hope the government would quit subsidizing debt.  They could achieve the same goal by giving homebuyers a credit - whether or not the homebuyer took on debt.  (To be clear, it's very likely I'll have a mortgage personally very soon, so this would hurt me, all else equal.)  I'm all for removing indebtedness incentives. 

I'm more ambivalent about the estate tax. 

I'm neither a Trump fan (didn't support him) nor an anti-Trump person (didn't support her either), so it's clear, but on balance I like this plan.  I suspect his advisors had significant input.  Though I'll reserve judgment fully until the full details are available.

zolotiyeruki

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #63 on: October 04, 2017, 06:45:16 AM »
I've got lots of kids, so the elimination of personal exemptions would hurt, but the increase in the child tax credit may offset that.  Like if the CTC goes from $1,000 to $1,500, then it's a wash.  Elimination of the property tax deduction would hurt as well, but I'm actually ok with eliminating state tax deductions.

- Logistics: how do you accurately track what each person spends every year (which is necessary for progressive taxation)? especially tricky with cash transactions. Can you ask your poor brother to buy something for you with your money?
- If you save money, then move to another country to spend it, you pay almost no tax.
On point #1, that's easy to fix--just cut a check for (exemption amount * consumption tax rate).  For point #2, that's a valid concern, but I don't think it would be a big deal--despite the attraction of geographic arbitrage, there aren't many people who take advantage of it.  Sure, some people would pursue that path, but it'd be a marginal percentage.  Or, you could simply tax the money as it leaves the US.
« Last Edit: October 04, 2017, 06:50:33 AM by zolotiyeruki »

Acastus

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #64 on: October 04, 2017, 03:37:18 PM »
The tax plan, really scrawlings on a napkin, is classic bait and switch. 24k standard deduction sounds nice, but there will be no personal or dependent exemptions. Families with 2 children lose. Plus the starting tax bracket is higher. Lose again. The hurdle to itemize is now 24k, and state & local taxes don't count, so unless you have a giant mortgage you will never do this again. This only costs me about 3-4k in deductions, but it is still a loss.

Details will be sketchy for another month, anyway. I do not think there is a lot of concensus in Congress on what other deductions to cut, or where the tax brackets actually should reside. Step 1 is pass a budget. We will see if they can agree on even this.

v8rx7guy

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #65 on: October 04, 2017, 04:07:26 PM »
The tax plan, really scrawlings on a napkin, is classic bait and switch. 24k standard deduction sounds nice, but there will be no personal or dependent exemptions. Families with 2 children lose. Plus the starting tax bracket is higher. Lose again. The hurdle to itemize is now 24k, and state & local taxes don't count, so unless you have a giant mortgage you will never do this again. This only costs me about 3-4k in deductions, but it is still a loss.

Details will be sketchy for another month, anyway. I do not think there is a lot of concensus in Congress on what other deductions to cut, or where the tax brackets actually should reside. Step 1 is pass a budget. We will see if they can agree on even this.

Don't forget about the tax bracket and rate changes. Below is a graphic was the original proposal, so I'm making an assumption that this will be somewhat close to what the final proposal will be.

As you can see, for a Mustachian couple which is able to get their AGI down to $75,000 on the old tax plan they would owe $10,323 in taxes on that $75,000 ($1,855 for the first $18,550 and $8,468 for the next $56,450).  On the new proposal they would owe $9,000, which is $1,323 less than before  So let's not dismiss this proposal so soon... there is more to it than just increasing the standard deduction in lieu of the exemptions.


JLee

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #66 on: October 04, 2017, 04:27:50 PM »
That's about what I expected.  Those making $400k+ see huge cuts.

RidetheRain

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #67 on: October 04, 2017, 04:46:44 PM »
I would love to see a similar graphic based on average effective tax rates now and projections after the change. The marginal tax rate is a little misleading.
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RangerOne

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #68 on: October 04, 2017, 07:02:17 PM »
I think it is far less of a big deal since they also get rid of the personal exemptions.

I also think people making under $100k are going to see a modest tax cut unless they have several kids. Those making $100k to $300k are going to be the sacrificial lambs. And those $300k+ will get a big cut.


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This plan won't pass as is so I'm not going to get too worked up about it at this point. From everything I'v read so far, this is the correct take. Since I'm in that $100-300K group, as I suspect many here are, it sure looks like I'll be paying more in taxes under this plan. I would be fine with that, if it meant my taxes were going to support those in need or to pay for some new universal benefit. Instead, it sure seems like that increase will be used almost exclusively to decrease the tax burden of the already rich.

This is a fair point but it is kind of surprising they even put a plan out there like this. A fat tax cut for the rich is nothing new. Repubs always accomplish that. Any percentage cut to the top bracket has a far greater impact on high earners.

But the very fact that this proposal in many cases increases taxes, even if trivially, on people earning $100k-$300 (basically the upper middle class in most areas), is a direct slap in the face to a large voting block that tends to lean Republican.

In fairness in kind of echos the fact that Trump managed to win mostly on the backs of middle and lower middle class white folks. Its almost like they assume these people wont be able to figure out they are getting next to zero benefit from these changes and that the top 25% of earners can bitch but it wont matter because the base will still be with Trump...

RangerOne

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #69 on: October 04, 2017, 07:23:20 PM »
1) I didn't say that consumption equaled income.

I said that the poor pay a higher percentage of their income in taxes than the rich under a consumption tax.  We can take all frivolous spending out of the equation right away - there is a base amount of money that it costs to live . . . you need money for shelter, for food, for clothing.  A rich person needs as much of these as a poor person, so these costs are constant between the two.  Therefore, the poor always need to pay a higher percentage of tax when compared to income than the rich to live under this method of taxation.

2)Sure, and this is a reasonable attempt to make up for the otherwise obvious unfairness of a consumption tax.  Acroy said that he doesn't believe in doing this though, so I was trying to gauge his reasoning for something that doesn't make much sense to me.
I apologize if I didn't make my point clear enough.  A straight consumption tax is perfectly fair in itself, IMO.  The way I see it is this:  you can have all the money in the world, but it doesn't actually benefit you until you spend it, whether it be on food, rent, an iPhone or a yacht.  So a guy making $1MM/year and spending $50k is only taxed on the $50k he spends, just like a guy making $50k and spending every cent.  The $1MM guy isn't escaping taxes on the $950k by not spending, he's only deferring those taxes until he *does* spend it.  Comparing the tax paid to the taxpayer's income becomes completely irrelevant.

A straight consumption tax on all goods is incredibly regressive because the higher cost of goods is a disproportionate burden to people with less income. Which you noted and that is the basic reason why this is true.

There is some cut off where a financially sane person can cover all their basic needs. By adding a flat consumption tax you greatly raise that bar of how much it costs to cover those basic needs. Lets say that bar ends up being $30k for a single person.

All the people making around $30k and single will barely be able to save, live and pay their taxes. They wont get ahead. IF they lose their jobs or there is an emergency they are in trouble.

A person making double or triple that can chose to pay a similar amount of taxes by simple forgoing luxuries and pocket the rest. Beyond that they will probably start to invest. They will pay exactly the same taxes as the poorer people because they can and their investments will snowball because, surprise they are all tax free to. So are all their raises as people with better earning potential will likely get better raises too.

At this point every penny more you make above the standard cost of living becomes exponentially more valuable as it increase your ability to invest and create new income streams. Pretty soon you can chose to double or triple your living costs to bring in luxuries. But at that point your income advantage has given you a great advantage.

Take this out to its limit. A person with billions of dollars in investments literally is incapable of spending any amount of money that could even come close to their investment returns. Because they pay no taxes non of that money they accumulate will ever filter back into the system except in the form of investments in stocks.

It might be possible to create an income tax free system based on consumption but it is much harder to make the system not regressive.

Mr Mark

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #70 on: October 04, 2017, 10:28:59 PM »
Without the details it's impossible to answer. I'm more concerned about any changes to capital gains and qualified dividends. That 0% bracket is a huge loophole for FIREees

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JLee

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #71 on: October 04, 2017, 10:49:17 PM »
Without the details it's impossible to answer. I'm more concerned about any changes to capital gains and qualified dividends. That 0% bracket is a huge loophole for FIREees

I would be absolutely astonished if a Trump tax plan resulted in higher capital gains taxes.

Mr Mark

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #72 on: October 05, 2017, 04:48:50 AM »
Without the details it's impossible to answer. I'm more concerned about any changes to capital gains and qualified dividends. That 0% bracket is a huge loophole for FIREees

I would be absolutely astonished if a Trump tax plan resulted in higher capital gains taxes.

Depends on the new brackets.right? If they go for just 3 I could imagine only the lowest one coming with zero cap gains and they have not indicated income levels for the new brackets.
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Acastus

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #73 on: October 05, 2017, 07:04:58 AM »
v8rx7guy,

Winners and losers will be determined by where the breaks are between tax brackets, and nothing has been said about the bracket ranges. The sure winners are anyone in the 1% that pay 40% taxes. Those will drop to 25% when every rich person  incorporates into a pass through corp.

For the rest of us who make less than 700k, I will not sweat the details until I actually see some. It is all too vague. Plus, the factions within the Republican party all have different special interests to protect. I expect a brawl.

hoping2retire35

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #74 on: October 05, 2017, 11:43:33 AM »
Primary bread winner here. Kinda poorish. 3 kids, we get EITC and Child Tax credit so we pay FICA then get a ~$6000 check every spring from the gubmnt.

Yep.
Boom.

I am sure we will not pay anything in taxes but that last number will go down a lot... granted it roughly equals what I pay in FICA so seemed like a wash. But what I am really concerned about is loosing the potential change in employee health insurance plans no longer being deductible. I am not sure how they will look at that? I know our employer says that pay a lot of the 'premium' which is kinda ridiculous since they are self insured, so if they suddenly say we 'make' a lot more money and are therefore potentially taxed, that is what could screw us over.

Eliminating employee health insurance would be the best thing, especially long term, but he short term could really suck.

Wexler

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #75 on: October 05, 2017, 11:53:46 AM »
I think it is far less of a big deal since they also get rid of the personal exemptions.

I also think people making under $100k are going to see a modest tax cut unless they have several kids. Those making $100k to $300k are going to be the sacrificial lambs. And those $300k+ will get a big cut.


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I amazed it took this long for the Republicans to come up with this plan.  The Bush-era plan combined tax cuts that mostly went to the wealthy with scattered additional small tax cuts to everyone else.  That plan, cuts with no accompanying spending reduction or tax increases on anyone else, blew up the deficit. 

Here, the partially offsetting tax increases are aimed squarely at the sort of blue state assholes that no Trump voter will give a shit about.  It's hard to imagine them having much sympathy for a doctor making 300k/year who lives in an 800k house with high property taxes.  Plus, that doctor probably voted for Hillary anyway, so it's not like Trump lost a vote.  And, in that weird confluence of class pressures, the moderately rich person you see around you is a way bigger target of your rage and scorn than the absurdly rich person you never see. Like how you hate your direct manager way more than the CEO. Like how you hate your sister-in-law for bragging about her fancy trip to Europe and all those restaurants she eats in way more than you hate a Kardashian.   So, Trump voters won't be too burned up about CEOs raking it in even more as long as they can stick it to people they really hate.

As one of those blue state assholes, it's hard to argue that I can't afford a small tax increase.  I can.  I mean, it sucks that it's going to the 1% instead of, say, our crumbling infrastructure.  My only open question is whether the Trump voters on the lower end of that income scale and with a boatload of children will even realize that their taxes are going up.  I say probably not.  Just like Joe the Plumber was convinced that his under-the-table income of 30k was subject to tax increases that were only aimed at income over 250k, many people apply a partisan correction factor to any math that is in conflict with their world view.

I still say this plan blows up the deficit again, regardless of any offsetting tax increases.

hoping2retire35

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #76 on: October 05, 2017, 12:20:09 PM »
I think it is far less of a big deal since they also get rid of the personal exemptions.

I also think people making under $100k are going to see a modest tax cut unless they have several kids. Those making $100k to $300k are going to be the sacrificial lambs. And those $300k+ will get a big cut.


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I amazed it took this long for the Republicans to come up with this plan.  The Bush-era plan combined tax cuts that mostly went to the wealthy with scattered additional small tax cuts to everyone else.  That plan, cuts with no accompanying spending reduction or tax increases on anyone else, blew up the deficit. 

Here, the partially offsetting tax increases are aimed squarely at the sort of blue state assholes that no Trump voter will give a shit about.  It's hard to imagine them having much sympathy for a doctor making 300k/year who lives in an 800k house with high property taxes.  Plus, that doctor probably voted for Hillary anyway, so it's not like Trump lost a vote.  And, in that weird confluence of class pressures, the moderately rich person you see around you is a way bigger target of your rage and scorn than the absurdly rich person you never see. Like how you hate your direct manager way more than the CEO. Like how you hate your sister-in-law for bragging about her fancy trip to Europe and all those restaurants she eats in way more than you hate a Kardashian.   So, Trump voters won't be too burned up about CEOs raking it in even more as long as they can stick it to people they really hate.

As one of those blue state assholes, it's hard to argue that I can't afford a small tax increase.  I can.  I mean, it sucks that it's going to the 1% instead of, say, our crumbling infrastructure.  My only open question is whether the Trump voters on the lower end of that income scale and with a boatload of children will even realize that their taxes are going up.  I say probably not.  Just like Joe the Plumber was convinced that his under-the-table income of 30k was subject to tax increases that were only aimed at income over 250k, many people apply a partisan correction factor to any math that is in conflict with their world view.

I still say this plan blows up the deficit again, regardless of any offsetting tax increases.

Haha, every time I read something about this plan /\/\ this is always my thought. All those people in the HCOL, blue states will pay the most. People like myself could end up pay more (or just getting a smaller refundable check) though I doubt that is by design per se. Perhaps standard deduction with the child tax credits would basically even out, but if the employer insurance thing goes through, then who knows how that will be interpreted.

Acastus

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #77 on: October 09, 2017, 03:15:24 PM »
The big question for everyone should be, "if 99% of America gets a tax increase or no change, why should we enact this at all?" It serves only to increase debt and reward fat cats.

RidetheRain

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #78 on: October 09, 2017, 03:26:04 PM »
The big question for everyone should be, "if 99% of America gets a tax increase or no change, why should we enact this at all?" It serves only to increase debt and reward fat cats.

Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.
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Wexler

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #79 on: October 09, 2017, 03:55:31 PM »
The big question for everyone should be, "if 99% of America gets a tax increase or no change, why should we enact this at all?" It serves only to increase debt and reward fat cats.

Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.

I mean-if it's easier for people to pay taxes, then by all means let's blow up the debt and eliminate the estate tax while giving the 1% a giant tax cut on their income.  Me?  I use TurboTax, so it's exactly the same for me.  Also, what exactly makes this easier?  Are people doing their taxes on an abacus?


RidetheRain

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #80 on: October 09, 2017, 04:02:43 PM »
The big question for everyone should be, "if 99% of America gets a tax increase or no change, why should we enact this at all?" It serves only to increase debt and reward fat cats.

Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.

I mean-if it's easier for people to pay taxes, then by all means let's blow up the debt and eliminate the estate tax while giving the 1% a giant tax cut on their income.  Me?  I use TurboTax, so it's exactly the same for me.  Also, what exactly makes this easier?  Are people doing their taxes on an abacus?

Well, part of the intention of the change is to simplify (intention != actual results). Simplification in the tax code isn't something to hate. I had meant all else equal, but you can take it as you like. For difficulty, I just mean that I have no idea what my taxes will be until I actually sit down and calculate all my credits and deductions and such. It's not obvious which means that sneaky things can happen. I think we all agree that we should be aware of what taxes we pay. Besides, I have to file taxes in upwards of four states each year because of travel in my job. I would love for taxes to be easier.
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Acastus

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #81 on: October 10, 2017, 11:31:13 AM »
The big question for everyone should be, "if 99% of America gets a tax increase or no change, why should we enact this at all?" It serves only to increase debt and reward fat cats.

Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.
Would you prefer taxes so simple that you can do them yourself, or complicated taxes you need an accountant for, but are $1000 lower? I prefer the lower cost option.

Whether there are 3, 7, or 20 tax brackets is mostly irrelevant at this point. Tax software can handle as many look up tables as you need. The real reason taxes are complicated is that tax expenditures are a cheaper way to provide incentives than a bureaucracy that hands out money. Our tax code is full of special incentives for all kinds of things. I think this is the right way to go. It is better to have, for example, the EITC and let people figure out how to get this money, than to create a new welfare bureaucracy that provides low income households some kind of service. There are also many studies that indicate people spend their money more efficiently than do charities that buy them stuff. Given this reality, I actually like the tax complexity we have.
« Last Edit: October 10, 2017, 11:34:34 AM by Acastus »

sokoloff

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #82 on: October 10, 2017, 11:41:53 AM »
Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.
Would you prefer taxes so simple that you can do them yourself, or complicated taxes you need an accountant for, but are $1000 lower? I prefer the lower cost option.
Since I pay $1200-1500/yr for tax prep services, I'd prefer the simpler option (which would also be cheaper for me).

RidetheRain

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #83 on: October 10, 2017, 11:43:04 AM »
The big question for everyone should be, "if 99% of America gets a tax increase or no change, why should we enact this at all?" It serves only to increase debt and reward fat cats.

Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.
Would you prefer taxes so simple that you can do them yourself, or complicated taxes you need an accountant for, but are $1000 lower? I prefer the lower cost option.

Whether there are 3, 7, or 20 tax brackets is mostly irrelevant at this point. Tax software can handle as many look up tables as you need. The real reason taxes are complicated is that tax expenditures are a cheaper way to provide incentives than a bureaucracy that hands out money. Our tax code is full of special incentives for all kinds of things. I think this is the right way to go. It is better to have, for example, the EITC and let people figure out how to get this money, than to create a new welfare bureaucracy that provides low income households some kind of service. There are also many studies that indicate people spend their money more efficiently than do charities that buy them stuff. Given this reality, I actually like the tax complexity we have.

Fair enough, I can respect that belief. I work in welfare so I tend to see the world through the eyes of the poorest among us. It causes a world-view that assumes that people generally don't have time for the cost-saving things the middle class are capable of leveraging. While I don't think Trump's tax plan is very good (it's hard to say with so little information), I do support the idea of simpler taxes. The idea of a "tax refund" is so ingrained in our system that people expect one. When really, if taxes were simpler, the correct amount of tax could be calculated and withheld. No more interest-free loans to the government!
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gerardc

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #84 on: October 10, 2017, 08:31:15 PM »
When really, if taxes were simpler, the correct amount of tax could be calculated and withheld. No more interest-free loans to the government!

If we put an end to those interest-free loans to the government, they'll have to increase taxes to compensate. Is that what you want? At least they're investing your money, probably better than the general population is, so I'd say it's a win.

RidetheRain

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #85 on: October 10, 2017, 08:45:53 PM »
When really, if taxes were simpler, the correct amount of tax could be calculated and withheld. No more interest-free loans to the government!

If we put an end to those interest-free loans to the government, they'll have to increase taxes to compensate. Is that what you want? At least they're investing your money, probably better than the general population is, so I'd say it's a win.
That's exactly what I want. I don't think preying on people and hiding taxes is a good idea.
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Acastus

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Re: Proposed increase of standard deduction to $24,000 - your thoughts?
« Reply #86 on: October 11, 2017, 10:58:03 AM »
Some of this is to make it easier for people to do their taxes. I'd be pretty happy if it was easier to pay my taxes even if I pay roughly the same amount. Some people would even save money if they currently pay an accountant and find they no longer need to.
Would you prefer taxes so simple that you can do them yourself, or complicated taxes you need an accountant for, but are $1000 lower? I prefer the lower cost option.
Since I pay $1200-1500/yr for tax prep services, I'd prefer the simpler option (which would also be cheaper for me).
I am going to guess if you need to pay that much, you run a business or have very complex personal assets. I am sure business taxes will remain complex. If it is personal, you may fall into the category of incorporating to save 40%.