Author Topic: Republican Tax Plan 2017  (Read 167247 times)

protostache

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Re: Republican Tax Plan 2017
« Reply #1400 on: December 17, 2017, 12:18:05 PM »
What's the word on 457 limits remaining seperate from 401k/403b?

Saw this talked about earlier in senate bill, but not since they are merging the two.

Conference report leaves that out (no change from current law).

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #1401 on: December 17, 2017, 12:32:06 PM »
Sol, while I agree with you completely on your take on this bill, I think we need to stop prognosticating disasters that will happen because of this bill and instead start thinking about ways to live with the consequences.  I'm really disappointed that this thread disintegrated into a purely political discussion. 

I'm not even that upset about the financial implications of this bill, honestly.  My family will save money this year. 

I was just trying to highlight that it seems to be much more than a tax bill.  It's the only major piece of legislation that Congress is going to pass in the first year of the new administration, and they've really loaded it up with everything they can think of.  It repeals the individual mandate and consequently causes 13 million people to lose health insurance,
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.
Quote

 because their priority is undermining Obamacare.  It reduces medicaid and ss funding, because their priority is slashing the social safety net.  It raises taxes on the middle class to fund a tax break for the upper class, because their priority is increasing wealth inequality.  These things are sort of tax reform issues, but only in the sense that they serve larger ideological goals of the party.  I'm shocked they didn't include the personhood for fetuses amendment about 529 plans.
Sol, you're just starting to liberal dribble. You usually have good arguments. Regroup and get off the bandwagon.

If more healthy people opt out then costs go up, because there's a higher percentage of sick people buying insurance. It's how insurance works.

sol

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Re: Republican Tax Plan 2017
« Reply #1402 on: December 17, 2017, 12:48:57 PM »
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.

Did you not read the CBO report?

It spells out how any why the various millions of people lose insurance for different reasons.  Yes, some of them lose it because they will choose to be uninsured.  Of those, some will need healthcare they cannot afford, and so the rest of us will pay for it.  Others will lose coverage because of the medicaid changes, others because they can no longer afford the increased premiums that will result from repealing the mandate.

Quote
Sol, you're just starting to liberal dribble.

How do you figure?  They DID propose a personhood amendment for fetuses.  They DID create a bill that raises taxes on the poor and provides multiple tax cuts for the wealthy.  They DID change the tax rates on pass-through entities, in order to reduce funding for social programs through payroll taxes. 

These aren't really "dribble" (did you mean drivel?) they are the facts of the Republican bill about to be passed without any Democratic support, and which is opposed by roughly 70% of the country. 
« Last Edit: December 17, 2017, 01:05:51 PM by sol »

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #1403 on: December 17, 2017, 01:47:05 PM »
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.

Did you not read the CBO report?

It spells out how any why the various millions of people lose insurance for different reasons.  Yes, some of them lose it because they will choose to be uninsured.  Of those, some will need healthcare they cannot afford, and so the rest of us will pay for it.  Others will lose coverage because of the medicaid changes, others because they can no longer afford the increased premiums that will result from repealing the mandate.

Don't forget insurers dropping out, and some markets being without any plans at all. Because that's a thing that almost happened for 2018 without the new tax law.

Exflyboy

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Re: Republican Tax Plan 2017
« Reply #1404 on: December 17, 2017, 02:00:10 PM »
Yeah funny how these liberals in other developed countries have FAR cheaper and just as good healthcare.

Maybe they have "death panels" over there....

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #1405 on: December 17, 2017, 02:12:09 PM »
When can I expect changes in payroll tax withholdings?  Seems like the biggest holdup at this point is administrative changes in payroll depts?

sol

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Re: Republican Tax Plan 2017
« Reply #1406 on: December 17, 2017, 02:29:37 PM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #1407 on: December 17, 2017, 02:52:02 PM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

Huh.  Guess I will need to up my allowances, depending on what happens this week.

BuildingFrugalHabits

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Re: Republican Tax Plan 2017
« Reply #1408 on: December 17, 2017, 03:31:49 PM »

Did you not read the CBO report?

It spells out how any why the various millions of people lose insurance for different reasons.  Yes, some of them lose it because they will choose to be uninsured.  Of those, some will need healthcare they cannot afford, and so the rest of us will pay for it.  Others will lose coverage because of the medicaid changes, others because they can no longer afford the increased premiums that will result from repealing the mandate.


Do you think that at least some individual states will still enact their own mandates and stabilize the insurance markets in those states?  Another thing too, hopefully the motivation by Republicans to continue to dismantle the ACA will cease with the passage of this bill and repeal of the mandate.  That would leave subsidies intact, at least for states with stable insurance markets like, California for instance. 
« Last Edit: December 17, 2017, 04:18:54 PM by BuildingFrugalHabits »

secondcor521

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Re: Republican Tax Plan 2017
« Reply #1409 on: December 17, 2017, 04:45:25 PM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

I don't believe sol's comments in his last two paragraphs are accurate.

Today I heard Treasury Secretary Mnuchin say in a radio interview that the IRS is already preparing new withholding tables for employers to determine how much to withhold from paychecks based on the new lowered tax brackets.  He indicated that people could see lower withholding from their paychecks in February.

I have to believe the W-4 will have to change as well, but he didn't mention that form specifically.

If I were still working I'd probably make a note to check my withholding in March and make sure it was still appropriate.

protostache

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Re: Republican Tax Plan 2017
« Reply #1410 on: December 17, 2017, 04:54:44 PM »
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.

A very large portion of that 13 million is people not getting into Medicaid. The lack of a mandate means they have no incentive to visit healthcare.gov which is where they would be notified of their eligability for Medicaid. No mandate or outreach = no signups = no coverage for people who would be eligible for the program.

The individual market is a relatively small number of people compared to Medicaid. Smaller still, vanishingly so, is the number of people who refuse to buy insurance and have paid the penalty on principal. The only significant effect of mandate repeal on the individual is that people will buy short term junk insurance in higher numbers.

Bateaux

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Re: Republican Tax Plan 2017
« Reply #1411 on: December 17, 2017, 05:49:27 PM »
So let's accept the new tax code as it is, and see about legally making it work for us.


I agree, but not just working the tax code to one's advantage, need to protect one's self from the rigged system.

I'm really not that old, but I've seen the debt go from hundreds of millions to billions then trillions which worried me over the years, but honestly it doesn't bother me at all now.  The national debt was just one of many concerns over the years, there's consumer debt, pension fund under funding, bond debt and student debt from coast to coast which to me is Puerto Rico in the making, but I have learned not to care as it will never be resolved.  Being a fiscal conservative, I've long worried about the next generation, but while worrying I witnessed both parties spending on their usual pet projects to stay in power.

I've seen Democrats come to power promising to spend more over the years while ignoring the debt.  I've seen Republicans come to power promising not to spend more, but they too ponied up every time.  It's a battle of sorts, while Democrats are in power, typical Republican pet projects aren't funded so when Republicans gain power, there's an effort to fund what hasn't been funded for a certain number of years, then the Democrats do the same when they get power so an endless cycle of each party aching to fund their pet projects.

I find all involved when speaking about the debt, including Mustache millionaires, hypocrites in one way or another. 

At the end of the day, it is best to plan in whatever way one can for the next financial crisis and the one after that.  It seems these crisis are a means to redistribute wealth - how many that lost their home have recovered with a home and the savings they had, how many are still under water and broke while the mega rich, rich Democrats and Republicans are doing just fine, better than ever.  How many went to jail as a result of the last crisis, one, two?  I see a rigged system by all of those in power which isn't limited to politicians considering super PACs are in power even without holding the office. 

So with the system rigged by both parties, I feel I need to protect myself from the next crisis that will yet again destroy wealth at the bottom and in the middle.  They really don't want the masses to gain for very long, to a point, then take it away so one has to be aware to avoid the next crisis, whatever it is.

Very good words.  If the unwashed masses actually had a clue to how the system is stacked against them there would be a revolt.  As a Mustacian Millionaire I practice stealth wealth.   There may be a time in the future where the working poor come for the heads of the elite class.  I snottedly made comments recently on this forum stating that being +500k in wealth is chicken feed.  That's how far removed I am from my humble days where I labored with a shovel for little more than minimum wage.  Keep your heads and your noses low.

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #1412 on: December 17, 2017, 05:54:17 PM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

I don't believe sol's comments in his last two paragraphs are accurate.

Today I heard Treasury Secretary Mnuchin say in a radio interview that the IRS is already preparing new withholding tables for employers to determine how much to withhold from paychecks based on the new lowered tax brackets.  He indicated that people could see lower withholding from their paychecks in February.

I have to believe the W-4 will have to change as well, but he didn't mention that form specifically.

If I were still working I'd probably make a note to check my withholding in March and make sure it was still appropriate.

Yeah, Mnuchin said the same thing on Face the Nation this AM (same interview on the radio?) so that was why I was asking.

pecunia

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Re: Republican Tax Plan 2017
« Reply #1413 on: December 17, 2017, 07:12:04 PM »
I have a concern:

Previous entry:
Quote
I'm really not that old, but I've seen the debt go from hundreds of millions to billions then trillions which worried me over the years, but honestly it doesn't bother me at all now.  The national debt was just one of many concerns over the years, there's consumer debt, pension fund under funding, bond debt and student debt from coast to coast which to me is Puerto Rico in the making, but I have learned not to care as it will never be resolved.

Ok - Money is like any other commodity.  It follows the rules of supply and demand.  By spending money that isn't honestly there, it is like getting stuff at a reduced value.  It is increasing the supply of money.  Increasing the supply with the same number of folks out there using it, will diminish its value.  As you diminish the the value, it means that it takes more money to buy goods.

This is inflation.

They say that inflation is low.  Have you not seen prices rising?

How will that help future Mustachians?  Well, golly, if you are retired for 40 years, you may be facing money problems.  You may be finding yourself back to work in your old age, Bucko.  If you were a software engineer or some such you will be hopelessly rusty and out of date. 

Is there enough protection using index funds and the 4 percent rule?  Will stocks rise as fast as the inflation?

Quote
Very good words.  If the unwashed masses actually had a clue to how the system is stacked against them there would be a revolt.

I'm not sure whether myself and the rest of the unwashed masses just won't have that revolt.  Events of this time remind me of the description of the gilded age I've read about in the history books.

MDM

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Re: Republican Tax Plan 2017
« Reply #1414 on: December 17, 2017, 07:17:01 PM »
Is there enough protection using index funds and the 4 percent rule?
Short answers are
- if the future is no worse than the worst of the past, then yes.
- if the future is      worse than the worst of the past, then  no.

See Stop worrying about the 4% rule for over 1000 posts debating this.

dragoncar

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Re: Republican Tax Plan 2017
« Reply #1415 on: December 17, 2017, 11:30:03 PM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

I don't believe sol's comments in his last two paragraphs are accurate.

Today I heard Treasury Secretary Mnuchin say in a radio interview that the IRS is already preparing new withholding tables for employers to determine how much to withhold from paychecks based on the new lowered tax brackets.  He indicated that people could see lower withholding from their paychecks in February.

I have to believe the W-4 will have to change as well, but he didn't mention that form specifically.

If I were still working I'd probably make a note to check my withholding in March and make sure it was still appropriate.

Yeah, Mnuchin said the same thing on Face the Nation this AM (same interview on the radio?) so that was why I was asking.

ugh... I hope they revise the W-4 to be something more simple like "withhold x%, x$, or my expected MAGI is $X"

my wife is taking 5 mo unpaid leave next year and I just did all the work to figure out she needs 27 allowances or something absurd like that

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #1416 on: December 18, 2017, 07:54:53 AM »
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.

A very large portion of that 13 million is people not getting into Medicaid. The lack of a mandate means they have no incentive to visit healthcare.gov which is where they would be notified of their eligability for Medicaid. No mandate or outreach = no signups = no coverage for people who would be eligible for the program.

The individual market is a relatively small number of people compared to Medicaid. Smaller still, vanishingly so, is the number of people who refuse to buy insurance and have paid the penalty on principal. The only significant effect of mandate repeal on the individual is that people will buy short term junk insurance in higher numbers.

One tiny little bright sliver: Medicaid eligibility is often retroactive without a defined enrollment period. So if you have a catastrophic problem, the hospital will likely help you sign up (because they like being paid something instead of nothing). It won't do crap for preventive care, but some people will get covered this way.

Fomerly known as something

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Re: Republican Tax Plan 2017
« Reply #1417 on: December 18, 2017, 07:58:05 AM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

I don't believe sol's comments in his last two paragraphs are accurate.

Today I heard Treasury Secretary Mnuchin say in a radio interview that the IRS is already preparing new withholding tables for employers to determine how much to withhold from paychecks based on the new lowered tax brackets.  He indicated that people could see lower withholding from their paychecks in February.

I have to believe the W-4 will have to change as well, but he didn't mention that form specifically.

If I were still working I'd probably make a note to check my withholding in March and make sure it was still appropriate.

I recall from the Bush temporary cuts, I didn't need to do anything.  Payroll adjusted based on who knows what.  I think I had changes in base take home pay again without doing anything but that was a long, time ago in a galaxy far away.

ixtap

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Re: Republican Tax Plan 2017
« Reply #1418 on: December 18, 2017, 08:30:01 AM »
When can I expect changes in payroll tax withholdings?

Whenever you submit a change request?

I don't think anything will necessarily change in corporate payroll deparments.  The current withholdings and exemptions system was already a holdover from previous tax systems, and I don't think it needs to change for 2018.  They certainly could change it, I just don't think it's mandatory.

All that will change is how you file your taxes at the end of the year.  The form will be different in 2019, for the 2018 tax year under the new system.

I don't believe sol's comments in his last two paragraphs are accurate.

Today I heard Treasury Secretary Mnuchin say in a radio interview that the IRS is already preparing new withholding tables for employers to determine how much to withhold from paychecks based on the new lowered tax brackets.  He indicated that people could see lower withholding from their paychecks in February.

I have to believe the W-4 will have to change as well, but he didn't mention that form specifically.

If I were still working I'd probably make a note to check my withholding in March and make sure it was still appropriate.

I recall from the Bush temporary cuts, I didn't need to do anything.  Payroll adjusted based on who knows what.  I think I had changes in base take home pay again without doing anything but that was a long, time ago in a galaxy far away.

And they sent us all a check in the mail back then.

starguru

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Re: Republican Tax Plan 2017
« Reply #1419 on: December 18, 2017, 08:55:49 AM »
This is interesting

https://www.bloomberg.com/news/articles/2017-12-18/finance-gurus-devise-funky-workarounds-to-loss-of-salt-deduction

TL;DR -- If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

sol

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Re: Republican Tax Plan 2017
« Reply #1420 on: December 18, 2017, 08:59:59 AM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

djadziadax

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Re: Republican Tax Plan 2017
« Reply #1421 on: December 18, 2017, 09:01:23 AM »

Quote

Do you think that at least some individual states will still enact their own mandates and stabilize the insurance markets in those states?  Another thing too, hopefully the motivation by Republicans to continue to dismantle the ACA will cease with the passage of this bill and repeal of the mandate.  That would leave subsidies intact, at least for states with stable insurance markets like, California for instance.

Yes...California's proposal for Single Payer in CA  - http://www.latimes.com/politics/essential/la-pol-ca-essential-politics-updates-first-fiscal-analysis-of-single-payer-1495475434-htmlstory.html
« Last Edit: December 18, 2017, 09:03:16 AM by djadziadax »

fattest_foot

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Re: Republican Tax Plan 2017
« Reply #1422 on: December 18, 2017, 09:01:38 AM »
I'm really not that old, but I've seen the debt go from hundreds of millions to billions then trillions which worried me over the years, but honestly it doesn't bother me at all now.  The national debt was just one of many concerns over the years, there's consumer debt, pension fund under funding, bond debt and student debt from coast to coast which to me is Puerto Rico in the making, but I have learned not to care as it will never be resolved.  Being a fiscal conservative, I've long worried about the next generation, but while worrying I witnessed both parties spending on their usual pet projects to stay in power.

I can't find this post anymore, but it made me laugh and I saw two people quote it.

I had to go back to 1862 when the debt was in the hundreds of millions (incidentally, that was the only year it was hundreds of millions; it went from 10's of millions prior, to $1B in 1863).

The last time the national debt was in the 100's of billions was 1981 ($997B).

protostache

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Re: Republican Tax Plan 2017
« Reply #1423 on: December 18, 2017, 09:03:09 AM »
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.

A very large portion of that 13 million is people not getting into Medicaid. The lack of a mandate means they have no incentive to visit healthcare.gov which is where they would be notified of their eligability for Medicaid. No mandate or outreach = no signups = no coverage for people who would be eligible for the program.

The individual market is a relatively small number of people compared to Medicaid. Smaller still, vanishingly so, is the number of people who refuse to buy insurance and have paid the penalty on principal. The only significant effect of mandate repeal on the individual is that people will buy short term junk insurance in higher numbers.

One tiny little bright sliver: Medicaid eligibility is often retroactive without a defined enrollment period. So if you have a catastrophic problem, the hospital will likely help you sign up (because they like being paid something instead of nothing). It won't do crap for preventive care, but some people will get covered this way.

Maybe, but if you have a problem that is bad but you think isn't catastrophic, and you don't have insurance, and you don't know that you're eligible for Medicaid solely because of your income level, how likely is it you're going to go to the hospital at all?

djadziadax

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Re: Republican Tax Plan 2017
« Reply #1424 on: December 18, 2017, 09:05:04 AM »

Quote

Do you think that at least some individual states will still enact their own mandates and stabilize the insurance markets in those states?  Another thing too, hopefully the motivation by Republicans to continue to dismantle the ACA will cease with the passage of this bill and repeal of the mandate.  That would leave subsidies intact, at least for states with stable insurance markets like, California for instance.

Yes...California's proposal for Single Payer in CA  - http://www.latimes.com/politics/essential/la-pol-ca-essential-politics-updates-first-fiscal-analysis-of-single-payer-1495475434-htmlstory.html

And this more recent - http://www.sacbee.com/opinion/california-forum/article189661334.html

djadziadax

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Re: Republican Tax Plan 2017
« Reply #1425 on: December 18, 2017, 09:07:54 AM »
Does anyone know if Capital Gain Loss will still be available as a deduction? Could not find it in the conference bill, so assume no change?

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #1426 on: December 18, 2017, 09:14:32 AM »
Do they lose it because they decide, since I don't get a penalty I'm not buying insurance? I don't get how a lack of mandate means they lose health insurance.

A very large portion of that 13 million is people not getting into Medicaid. The lack of a mandate means they have no incentive to visit healthcare.gov which is where they would be notified of their eligability for Medicaid. No mandate or outreach = no signups = no coverage for people who would be eligible for the program.

The individual market is a relatively small number of people compared to Medicaid. Smaller still, vanishingly so, is the number of people who refuse to buy insurance and have paid the penalty on principal. The only significant effect of mandate repeal on the individual is that people will buy short term junk insurance in higher numbers.

One tiny little bright sliver: Medicaid eligibility is often retroactive without a defined enrollment period. So if you have a catastrophic problem, the hospital will likely help you sign up (because they like being paid something instead of nothing). It won't do crap for preventive care, but some people will get covered this way.

Maybe, but if you have a problem that is bad but you think isn't catastrophic, and you don't have insurance, and you don't know that you're eligible for Medicaid solely because of your income level, how likely is it you're going to go to the hospital at all?

I didn't say it was awesome. :-\

starguru

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Republican Tax Plan 2017
« Reply #1427 on: December 18, 2017, 09:20:38 AM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

For you or in general?   It will certainly help those who pay high state income taxes.  I know for myself I’ll pay 30k in state taxes and 15k in property taxes next year.  It’s the difference between being able to deduct 40k vs 10k.


Sent from my iPhone using Tapatalk

jim555

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Re: Republican Tax Plan 2017
« Reply #1428 on: December 18, 2017, 09:21:08 AM »
One tiny little bright sliver: Medicaid eligibility is often retroactive without a defined enrollment period. So if you have a catastrophic problem, the hospital will likely help you sign up (because they like being paid something instead of nothing). It won't do crap for preventive care, but some people will get covered this way.
The person would need to be under the income limits for those retroactive months (up to 3) to qualify.

boarder42

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Re: Republican Tax Plan 2017
« Reply #1429 on: December 18, 2017, 09:23:19 AM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

how do you not see the advantage of it - a state would allow you to donate money to them - and refund you dollar for dollar on what your income tax would have been

for example i have 10k in income tax in my state - not able to itemize on my federal return.  flip side i donate 10k to my state who gives me 10k back on my income taxes- 10k is fully deductible.  now i'd still need property taxes and mortgage interest and other donation to get to the 24k MFJ standard deduction but. i dont quite get what it offsetting property tax would do unless you live in a no income tax state with higher than 10k in property tax then the local Muni's could possibly implement something similar.

I was more intrigued by the payroll tax section than others b/c that really helps mustachians.  If states go to employer paid payroll tax vs income tax. that would greatly help more states become income tax free states and be more inviting to the retiree

'If employers pay the payroll tax and reduce employeesí salaries by the same amount, workers wouldnít have to deduct anything and would wind up being paid the same amount. That would allow states to collect the same revenue while preserving individualsí deductions on federal returns.'
« Last Edit: December 18, 2017, 09:32:08 AM by boarder42 »

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #1430 on: December 18, 2017, 09:43:36 AM »
One tiny little bright sliver: Medicaid eligibility is often retroactive without a defined enrollment period. So if you have a catastrophic problem, the hospital will likely help you sign up (because they like being paid something instead of nothing). It won't do crap for preventive care, but some people will get covered this way.
The person would need to be under the income limits for those retroactive months (up to 3) to qualify.

Well yeah, but we're talking about people who aren't aware they're eligible, so that's going to be the majority of the people in that particular situation. Presumably, a portion people with a life event that triggers eligibility will apply at that time to maintain coverage. It's far from ideal.

sol

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Re: Republican Tax Plan 2017
« Reply #1431 on: December 18, 2017, 10:04:30 AM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

how do you not see the advantage of it - a state would allow you to donate money to them - and refund you dollar for dollar on what your income tax would have been

Right, it's the dollar for dollar refund that is key to making this advantageous for people.  It doesn't make sense to donate money to the state unless it also offsets your property taxes. 

It does seem legally questionable to me, if they try it.  By what authority can a state selectively forgive property tax bills for some residents but not others, based on their charitable giving? Property tax rates are set by statute.  You can't just change them to zero on a whim.  How would they verify the contributions in a way that was not transparently identical to just paying property taxes?  I would expect lawsuits from conservative political activists.

boarder42

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Re: Republican Tax Plan 2017
« Reply #1432 on: December 18, 2017, 10:20:12 AM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

how do you not see the advantage of it - a state would allow you to donate money to them - and refund you dollar for dollar on what your income tax would have been

Right, it's the dollar for dollar refund that is key to making this advantageous for people.  It doesn't make sense to donate money to the state unless it also offsets your property taxes. 

It does seem legally questionable to me, if they try it.  By what authority can a state selectively forgive property tax bills for some residents but not others, based on their charitable giving? Property tax rates are set by statute.  You can't just change them to zero on a whim.  How would they verify the contributions in a way that was not transparently identical to just paying property taxes?  I would expect lawsuits from conservative political activists.

i dont understand why you keep targetting property taxes here.

if i owe a state income taxes of 10k - not federally deductible
and the state lets me donate 10k to them and gives me a state income tax refund of 10k - i deduct my donation of 10k from my federal taxes now

property taxes do not matter at all.

sol

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Re: Republican Tax Plan 2017
« Reply #1433 on: December 18, 2017, 10:33:07 AM »
i dont understand why you keep targetting property taxes here.

I didn't mean to target property taxes.  Property, income, it's all the same for this purpose.

I'm just not seeing how a state can legally forgive taxes due based on a charitable donation, which by definition cannot be for your own benefit. 

I'm not philosophically opposed to the idea, I just don't see how it could possibly be legal.

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #1434 on: December 18, 2017, 10:48:17 AM »
i dont understand why you keep targetting property taxes here.

I didn't mean to target property taxes.  Property, income, it's all the same for this purpose.

I'm just not seeing how a state can legally forgive taxes due based on a charitable donation, which by definition cannot be for your own benefit. 

I'm not philosophically opposed to the idea, I just don't see how it could possibly be legal.

Same way my zoo membership is tax-deductible? (translation: I have no idea, but it is)

dude

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Re: Republican Tax Plan 2017
« Reply #1435 on: December 18, 2017, 10:53:52 AM »
Sol, while I agree with you completely on your take on this bill, I think we need to stop prognosticating disasters that will happen because of this bill and instead start thinking about ways to live with the consequences.  I'm really disappointed that this thread disintegrated into a purely political discussion. 

I'm not even that upset about the financial implications of this bill, honestly.  My family will save money this year.  We're already rich, and this bill is pretty nice to rich people.

I was just trying to highlight that it seems to be much more than a tax bill.  It's the only major piece of legislation that Congress is going to pass in the first year of the new administration, and they've really loaded it up with everything they can think of.  It repeals the individual mandate and consequently causes 13 million people to lose health insurance, because their priority is undermining Obamacare.  It reduces medicaid and ss funding, because their priority is slashing the social safety net.  It raises taxes on the middle class to fund a tax break for the upper class, because their priority is increasing wealth inequality.  These things are sort of tax reform issues, but only in the sense that they serve larger ideological goals of the party.  I'm shocked they didn't include the personhood for fetuses amendment about 529 plans.

If I read correctly, 529s can now be used by rich people to send their kids to private K-12 schools and home schooling. Unreal. So now rich families get a tax break for their kids' educations, while public school families get a tax increase (since their SALT deductions are capped at 10k).

All deductions, exemptions and credits now adjusted for inflation in accordance with "chained CPI," which means their value will diminish over time as they lose out to real inflation.

I went line by line and compared what my taxes in 2016 would have been under the new plan. I would have paid $65 more in federal taxes under this GOP plan. No big deal to me personally, but this whole bill is still a monumental ass-raping of the American people as a whole.

WoodSpinner

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Re: Republican Tax Plan 2017
« Reply #1436 on: December 18, 2017, 11:07:50 AM »
All,

Suggest a review of the Kitces analysis on the tax plan along with recommended 2017 actions.

Itís a well done analysis which skips the debate about the reasoning behind the changes.

WoodSpinner

tralfamadorian

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Re: Republican Tax Plan 2017
« Reply #1437 on: December 18, 2017, 11:14:54 AM »
Does anyone know if Capital Gain Loss will still be available as a deduction? Could not find it in the conference bill, so assume no change?

I don't know if this was the change you are referring to but there is a change to carry forward loss limitations for non-corporations (p.579). Excess business losses are to be rolled into net operating loss and written off (with limitations) in the current tax year as opposed to being held until the taxpayer sells their interest in that passive activity. This change (I believe) would be a boon to those who invest passive in fun, hobby businesses that lose money on the regular basis. 

If you are referring to mandating FIFO as the only option for selling securities, no, that did not make it.

wenchsenior

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Re: Republican Tax Plan 2017
« Reply #1438 on: December 18, 2017, 11:28:07 AM »
Didn't we establish in this thread that we cannot deduct any 2018 property taxes that we might prepay in 2017?

Because yahoo front page just ran an article encouraging people do this to get a bigger itemizing boost in 2017...

sol

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Re: Republican Tax Plan 2017
« Reply #1439 on: December 18, 2017, 11:33:02 AM »
Didn't we establish in this thread that we cannot deduct any 2018 property taxes that we might prepay in 2017?

Because yahoo front page just ran an article encouraging people do this to get a bigger itemizing boost in 2017...

You're probably better off taking your financial advice from the forum instead of from Yahoo. 

I am consistently shocked by the mindless and ill informed drivel that passes for journalism these days.  If you can't hire an editor, then maybe don't employ college kids to write front page stories without supervision.
« Last Edit: December 18, 2017, 01:01:52 PM by sol »

RangerOne

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Re: Republican Tax Plan 2017
« Reply #1440 on: December 18, 2017, 11:43:42 AM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

For you or in general?   It will certainly help those who pay high state income taxes.  I know for myself Iíll pay 30k in state taxes and 15k in property taxes next year.  Itís the difference between being able to deduct 40k vs 10k.


Sent from my iPhone using Tapatalk

If you are paying $30k in state taxes you are making a lot of money. Do you get any break from them bumping up the AMT threshold? Fed tax in your bracket. In other words clearly you get fucked on SALT, but does it balance out?

brooklynguy

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Re: Republican Tax Plan 2017
« Reply #1441 on: December 18, 2017, 12:01:02 PM »
Didn't we establish in this thread that we cannot deduct any 2018 property taxes that we might prepay in 2017?

I'm not sure if any consensus was reached on this point among the participants in this thread, but, in my view, the limitation imposed on deducting prepaid 2018 taxes (which refers to amounts "paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017" (emphasis added); see the amendment to ß64(b) of the tax code implemented by ß11042 of the bill), based on the plain meaning of its words, applies only to prepaid income taxes, and not prepaid property taxes.

This post, like all of my posts in the forum, does not constitute tax or legal advice.

PathtoFIRE

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Re: Republican Tax Plan 2017
« Reply #1442 on: December 18, 2017, 12:02:08 PM »
Didn't we establish in this thread that we cannot deduct any 2018 property taxes that we might prepay in 2017?

Because yahoo front page just ran an article encouraging people do this to get a bigger itemizing boost in 2017...

https://www.congress.gov/congressional-report/115th-congress/house-report/466/1?overview=closed

SEC. 11042. LIMITATION ON DEDUCTION FOR STATE AND LOCAL, ETC. TAXES.

    (a) In General.--Subsection (b) of section 164 is amended by adding at the end the following new paragraph:
            (6) Limitation on individual deductions for taxable years 2018 through 2025.--In the case of an individual and a taxable year beginning after December 31, 2017, and before January 1, 2026--
                    (A) foreign real property taxes shall not be taken into account under subsection (a)(1), and
                    (B) the aggregate amount of taxes taken into account under paragraphs (1), (2), and (3) of subsection (a) and paragraph (5) of this subsection for any taxable year shall not exceed $10,000 ($5,000 in the case of a married individual filing a separate return).
The preceding sentence shall not apply to any foreign taxes described in subsection (a)(3) or to any taxes described in paragraph (1) and (2) of subsection (a) which are paid or accrued in carrying on a trade or business or an activity described in section 212. For purposes of subparagraph (B), an amount paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017, shall be treated as paid on the last day of the taxable year for which such tax is so imposed.''.
    (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2016.


What some of us are pointing out is that the conference report specifically only mentions State or local income tax with regards to taxes that can only be deducted in the year in which they are imposed. Property tax and sales tax are left out.

starguru

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Re: Republican Tax Plan 2017
« Reply #1443 on: December 18, 2017, 12:13:38 PM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

For you or in general?   It will certainly help those who pay high state income taxes.  I know for myself Iíll pay 30k in state taxes and 15k in property taxes next year.  Itís the difference between being able to deduct 40k vs 10k.


Sent from my iPhone using Tapatalk

If you are paying $30k in state taxes you are making a lot of money. Do you get any break from them bumping up the AMT threshold? Fed tax in your bracket. In other words clearly you get fucked on SALT, but does it balance out?

I don't know who the current plan would affect me.  The one calculator I plugged my info into indicated I would save 3% initially and then lose at as the rates revert back but the deductions don't.  I don't know how the AMT changes will affect me.  I have a feeling it'll basically be the same. 


RangerOne

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Re: Republican Tax Plan 2017
« Reply #1444 on: December 18, 2017, 12:19:08 PM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

For you or in general?   It will certainly help those who pay high state income taxes.  I know for myself Iíll pay 30k in state taxes and 15k in property taxes next year.  Itís the difference between being able to deduct 40k vs 10k.


Sent from my iPhone using Tapatalk

If you are paying $30k in state taxes you are making a lot of money. Do you get any break from them bumping up the AMT threshold? Fed tax in your bracket. In other words clearly you get fucked on SALT, but does it balance out?

I don't know who the current plan would affect me.  The one calculator I plugged my info into indicated I would save 3% initially and then lose at as the rates revert back but the deductions don't.  I don't know how the AMT changes will affect me.  I have a feeling it'll basically be the same.

Again its temporary like all other individual deductions but:

"Proposed: Increase the exemption to $70,300 for singles and $109,400 for joint filers. Increase the phase-out threshold to $500,000 for singles and $1 million for joint filers. The higher limits would expire on Jan. 1, 2026"

Probably not enough info to go on, but you may see a healthy cut if you were paying AMT anyway.

starguru

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Re: Republican Tax Plan 2017
« Reply #1445 on: December 18, 2017, 12:26:51 PM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

For you or in general?   It will certainly help those who pay high state income taxes.  I know for myself Iíll pay 30k in state taxes and 15k in property taxes next year.  Itís the difference between being able to deduct 40k vs 10k.


Sent from my iPhone using Tapatalk

If you are paying $30k in state taxes you are making a lot of money. Do you get any break from them bumping up the AMT threshold? Fed tax in your bracket. In other words clearly you get fucked on SALT, but does it balance out?

I don't know who the current plan would affect me.  The one calculator I plugged my info into indicated I would save 3% initially and then lose at as the rates revert back but the deductions don't.  I don't know how the AMT changes will affect me.  I have a feeling it'll basically be the same.

Again its temporary like all other individual deductions but:

"Proposed: Increase the exemption to $70,300 for singles and $109,400 for joint filers. Increase the phase-out threshold to $500,000 for singles and $1 million for joint filers. The higher limits would expire on Jan. 1, 2026"

Probably not enough info to go on, but you may see a healthy cut if you were paying AMT anyway.

If that means no AMT unless income for joint filers is > $1M then that's good for me.  I do pay some AMT now, and we don't make more than $1M, so....

I know this has been discussed but it irks me that there is still ways to be very wealthy and not pay tax similar to what a high wage earner would pay.  They could fix this so easily be taxing all income the same (maybe giving an adjustment based on inflation for investment income).  They could probably lower rates further if they did this.  Then they would have a truly progressive tax system that wasn't overbearing.  That's what real reform would look like. 

RangerOne

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Re: Republican Tax Plan 2017
« Reply #1446 on: December 18, 2017, 12:34:27 PM »
I am fairly bad at estimating AMT tax because the rules are always stated in a convoluted way. But I think that means that up to $1 million dollars for joint filers your AMT calculation will get the full AMT deduction which will now be bumped to $109k. Where as for every dollar past $1 million you start to lose the $109k exemption. Compared to today's phase out of $160k this is a drastic shift.

This combine with the 3% cut to all brackets could mean your tax bill still gets a break. Also if your mortgage deduction if its over $750k will get grandfathered in. I would still bet if people complain enough California will do something to ease the pain of the new SALT rules.

seattlecyclone

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Re: Republican Tax Plan 2017
« Reply #1447 on: December 18, 2017, 12:53:25 PM »
I am fairly bad at estimating AMT tax because the rules are always stated in a convoluted way. But I think that means that up to $1 million dollars for joint filers your AMT calculation will get the full AMT deduction which will now be bumped to $109k. Where as for every dollar past $1 million you start to lose the $109k exemption. Compared to today's phase out of $160k this is a drastic shift.

This combine with the 3% cut to all brackets could mean your tax bill still gets a break. Also if your mortgage deduction if its over $750k will get grandfathered in. I would still bet if people complain enough California will do something to ease the pain of the new SALT rules.

Wow, that could be a huge benefit for me personally. I paid a bunch of AMT a few years ago from exercising stock options with my previous employer. This AMT is refundable in future years to the extent that our tax in the regular system exceeds our tax in the AMT system. We've been getting a little bit of it back each year because we aren't subject to AMT anymore, but the difference between the two systems isn't that huge for us, given our income and deductions. Increasing the exemption amount should help us get our money back sooner.

Hadilly

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Re: Republican Tax Plan 2017
« Reply #1448 on: December 18, 2017, 01:37:27 PM »
Woodspinner,  thank you so much for that recommendation. What a clear summary of the tax legislation in its current form.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #1449 on: December 18, 2017, 01:37:55 PM »
If you make a charitable contribution to a state, you get a dollar for dollar credit on your state income taxes.  How many states will move to such a system....Charitable deductions are fully deductible on federal taxes.

Unless the charitable donation offsets your property taxes, I don't see the advantage in it.

For you or in general?   It will certainly help those who pay high state income taxes.  I know for myself Iíll pay 30k in state taxes and 15k in property taxes next year.  Itís the difference between being able to deduct 40k vs 10k.


Sent from my iPhone using Tapatalk

If you are paying $30k in state taxes you are making a lot of money. Do you get any break from them bumping up the AMT threshold? Fed tax in your bracket. In other words clearly you get fucked on SALT, but does it balance out?

I don't know who the current plan would affect me.  The one calculator I plugged my info into indicated I would save 3% initially and then lose at as the rates revert back but the deductions don't.  I don't know how the AMT changes will affect me.  I have a feeling it'll basically be the same.

Again its temporary like all other individual deductions but:

"Proposed: Increase the exemption to $70,300 for singles and $109,400 for joint filers. Increase the phase-out threshold to $500,000 for singles and $1 million for joint filers. The higher limits would expire on Jan. 1, 2026"

Probably not enough info to go on, but you may see a healthy cut if you were paying AMT anyway.

For comparison, the current AMT exemption amounts are:
Married taxpayers filing jointly‎: ‎$84,500   Single taxpayers‎: ‎$54,300

So I don't think that this is a significant increase.