Author Topic: Republican Tax Plan 2017  (Read 72140 times)

Undecided

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Re: Republican Tax Plan 2017
« Reply #400 on: November 14, 2017, 09:13:37 PM »
I don't know if people have noticed but AMT is getting repealed as well. 

You really have to be making some pretty decent cash to get hit with AMT. 


Really when we're talking about these cuts there a few bread crumbs for the peasants but the upper middle class is going to get majorly effed. 

The wealthy and uber wealthy will dance their way to trickle down.

Married filing jointly, AMT starts at around $84,000, and the higher tax rate at around $150k.  I'm not sure how you define "decent cash" though for a 2-income couple.  I know when I was discussing the AMT with one of our directors (single income family) he said "be careful about your stock, if you don't exercise correctly you'll get hit with AMT."  And I said "dude, we have paid the AMT every year for a long long time."

But as he's never been a 2-income couple - even though he has a high income - he didn't realize that it takes effect so early (esp. in a high tax state like CA).

So, I haven't run the numbers, but I'm guessing with the tax increase + AMT, it's gonna be a bit of a wash for us.  Most likely we'll be paying more because we live in CA.

Interesting.  We're above that threshold and have never paid AMT.  The complexities of tax...

Well, I don't know if it's complex---it just means that you paid more than would have been due under the AMT.

Undecided

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Re: Republican Tax Plan 2017
« Reply #401 on: November 14, 2017, 09:31:37 PM »
Married filing jointly, AMT starts at around $84,000, and the higher tax rate at around $150k.

Did you mean $150k after mortgage interest and property taxes and state and local taxes and personal and dependent exemptions and HSA contributions and FSA contributions and charitable giving and maxing out 401k and 457b accounts? 

It is all such a hodge podge. I'm just looking at your list above, thinking "allowed under AMT, disallowed, disallowed, may be phased out, comes off the top, comes off the top, allowed under AMT, and comes off the top," and thinking the hacked-together nature of it is all so silly. I paid AMT in plenty of years where I had no itemized deductions other than state income taxes and charitable contributions (which are "allowed" for the AMT anyway, so it was really attributable to the state taxes). I think up to 10% of my federal income tax bill has come from the AMT addition in some years; this year it will be about 0.7%, so maybe I'm getting to the end of my AMT years regardless of whether it's killed off.

dragoncar

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Re: Republican Tax Plan 2017
« Reply #402 on: November 15, 2017, 12:25:38 AM »
Married filing jointly, AMT starts at around $84,000, and the higher tax rate at around $150k.

We make more than that and have never even come close to paying the AMT.  Did you mean $150k after mortgage interest and property taxes and state and local taxes and personal and dependent exemptions and HSA contributions and FSA contributions and charitable giving and maxing out 401k and 457b accounts?  Yea, if you're banking $150k in take-home pay after all of that, you probably need to be paying AMT because you're making approximately double that much.

AMT is a sort of phase-in, so "starting" around $84k doesn't mean that much unless you have a LOT of deductions

mm1970

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Re: Republican Tax Plan 2017
« Reply #403 on: November 15, 2017, 08:20:52 AM »
My coworker said "I never click that box", so I guess maybe there's an out??
Uh, no.

Or, perhaps your coworker is secretly hoping for the ultimate retirement plan: all food, clothing, and shelter paid for by the government.  The interior decor is a bit spartan, though, unless one likes iron bars.

More to the point, there are so many moving parts to the AMT that making generic "if you make X you will (or won't) have to pay AMT" statements is a fool's errand.
I was joking.  I think it's interesting that you have to actively "check" a box to calculation if you should pay the AMT.

It's good that Turbo tax does it for you because there are so many rules as to what's allowed and what's not allowed as a deduction under the AMT.

We don't pay "much" I don't think.  A couple of thousand extra.

SpareChange

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Re: Republican Tax Plan 2017
« Reply #404 on: November 15, 2017, 08:26:56 AM »
Whoa, didn't realize that deferred compensation was also being axed. I take part in a 409a plan with my company, and while it's less than 10% of my income, the taxes on that income alone pushes my family back into the "this new plan increases my taxes" group. Is it just me, or as this plan begins to get carefully dissected, does it not seem like the number of constituencies that will be against it continue to pile up?

http://www.napa-net.org/news/technical-competence/legislation/could-tax-reform-destroy-deferred-compensation/

The 457(b) goes away.


SAD!

Well that sucks.   I was about to participate in this for the first time, so this will definitely screw me on my tax planning.

Same. This Friday's check will be the first deduction lol. 

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Re: Republican Tax Plan 2017
« Reply #405 on: November 15, 2017, 08:44:13 AM »
Whoa, didn't realize that deferred compensation was also being axed. I take part in a 409a plan with my company, and while it's less than 10% of my income, the taxes on that income alone pushes my family back into the "this new plan increases my taxes" group. Is it just me, or as this plan begins to get carefully dissected, does it not seem like the number of constituencies that will be against it continue to pile up?

http://www.napa-net.org/news/technical-competence/legislation/could-tax-reform-destroy-deferred-compensation/

The 457(b) goes away.


SAD!

Well that sucks.   I was about to participate in this for the first time, so this will definitely screw me on my tax planning.

Same. This Friday's check will be the first deduction lol.

Okay, I am confused. First I read that the 457 will be treated like a 401k or 403b, meaning that any withdrawals before age 59.5 will be subjected to a 10% penalty in addition to taxes. Now I'm seeing that the 457 may be done away with altogether after 2017. Which is it?

I have a small (<$10k) 457(b) from my previous employer. Should I cash it out before the end of the year, just in case?

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #406 on: November 15, 2017, 09:18:31 AM »
https://twitter.com/TopherSpiro/status/930522616980484097

Quote
Tax bill will repeal the individual mandate:
- 13 million more uninsured
- $1,990 premium tax
- Insurer exodus from markets
ALL TO PAY FOR TAX CUTS FOR CORPORATIONS AND MILLIONAIRES
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boarder42

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Re: Republican Tax Plan 2017
« Reply #407 on: November 15, 2017, 10:42:18 AM »
https://twitter.com/TopherSpiro/status/930522616980484097

Quote
Tax bill will repeal the individual mandate:
- 13 million more uninsured
- $1,990 premium tax
- Insurer exodus from markets
ALL TO PAY FOR TAX CUTS FOR CORPORATIONS AND MILLIONAIRES

i dont get the constant quote about how many will be uninsured. of course there will be more uninsured b/c people will choose no insurance.  why is the number of people covered even part of this conversation.
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PopMegaphone

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Re: Republican Tax Plan 2017
« Reply #408 on: November 15, 2017, 10:57:42 AM »
Tuesday night the Senate GOP quietly added language to sunset individual tax cuts, but keep the corp tax cuts permanent:

Quote
Senate Republicans released a massive heap of changes to their tax bill Tuesday night, including tweaks to proposed individual tax cuts and to the way startup employees get paid.

Sen. Orrin Hatch, the Republican chair of the Senate Finance Committee, released a new version of the legislation that, significantly, would sunset individual tax cuts after 2025. That means the proposed tax cuts for Americans would end in 2026, after which the tax brackets would revert to today's levels absent new legislation from Congress.

Other changes to the individual side of taxes, like the repeal of the alternative minimum tax and the increased standard deduction, would also expire after 2025.

While the individual changes would be temporary, cuts to the corporate tax rate would be permanent in the bill. Hatch said in a statement accompanying the updated bill that the bill aimed to provide certainty for American businesses.

Full Story


Details in the link.  As noted earlier, they'd also repeal the individual mandate.

sherr

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Re: Republican Tax Plan 2017
« Reply #409 on: November 15, 2017, 11:18:33 AM »
https://twitter.com/TopherSpiro/status/930522616980484097

Quote
Tax bill will repeal the individual mandate:
- 13 million more uninsured
- $1,990 premium tax
- Insurer exodus from markets
ALL TO PAY FOR TAX CUTS FOR CORPORATIONS AND MILLIONAIRES

i dont get the constant quote about how many will be uninsured. of course there will be more uninsured b/c people will choose no insurance.  why is the number of people covered even part of this conversation.

Well, it's people who think they don't need insurance. But they could be wrong; car accidents can happen to anyone. So having them insured is better for society than not. Ideally everyone would be covered by something. Going 13 Million people in the wrong direction is a big deal in its own right, never mind the secondary effects like the intentional sabotage / collapse of the insurance marketplaces.

boarder42

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Re: Republican Tax Plan 2017
« Reply #410 on: November 15, 2017, 11:24:12 AM »
https://twitter.com/TopherSpiro/status/930522616980484097

Quote
Tax bill will repeal the individual mandate:
- 13 million more uninsured
- $1,990 premium tax
- Insurer exodus from markets
ALL TO PAY FOR TAX CUTS FOR CORPORATIONS AND MILLIONAIRES

i dont get the constant quote about how many will be uninsured. of course there will be more uninsured b/c people will choose no insurance.  why is the number of people covered even part of this conversation.

Well, it's people who think they don't need insurance. But they could be wrong; car accidents can happen to anyone. So having them insured is better for society than not. Ideally everyone would be covered by something. Going 13 Million people in the wrong direction is a big deal in its own right, never mind the secondary effects like the intentional sabotage / collapse of the insurance marketplaces.

No just no. Counting those insured is just looking at the wrong Target but then again this entire debate on who pays for it is the wrong Target. Cost cost cost. Then it won't be a burden.
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sherr

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Re: Republican Tax Plan 2017
« Reply #411 on: November 15, 2017, 11:48:52 AM »
https://twitter.com/TopherSpiro/status/930522616980484097

Quote
Tax bill will repeal the individual mandate:
- 13 million more uninsured
- $1,990 premium tax
- Insurer exodus from markets
ALL TO PAY FOR TAX CUTS FOR CORPORATIONS AND MILLIONAIRES

i dont get the constant quote about how many will be uninsured. of course there will be more uninsured b/c people will choose no insurance.  why is the number of people covered even part of this conversation.

Well, it's people who think they don't need insurance. But they could be wrong; car accidents can happen to anyone. So having them insured is better for society than not. Ideally everyone would be covered by something. Going 13 Million people in the wrong direction is a big deal in its own right, never mind the secondary effects like the intentional sabotage / collapse of the insurance marketplaces.

No just no. Counting those insured is just looking at the wrong Target but then again this entire debate on who pays for it is the wrong Target. Cost cost cost. Then it won't be a burden.

That's fine, then Republicans should use their majority-everywhere to work on the cost problem instead of sabotaging the existing system, no?

But of course a practical examination of human nature tells us that there will always be some people who think they don't need insurance, regardless of the cost. Young people tend to assume they'll live forever and all that. And regardless of where the best solution is, "number of uninsured" is still a useful metric to track.

So, yes just yes?

PopMegaphone

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Re: Republican Tax Plan 2017
« Reply #412 on: November 15, 2017, 11:49:24 AM »
https://twitter.com/TopherSpiro/status/930522616980484097

Quote
Tax bill will repeal the individual mandate:
- 13 million more uninsured
- $1,990 premium tax
- Insurer exodus from markets
ALL TO PAY FOR TAX CUTS FOR CORPORATIONS AND MILLIONAIRES

i dont get the constant quote about how many will be uninsured. of course there will be more uninsured b/c people will choose no insurance.  why is the number of people covered even part of this conversation.


Removing the mandate would likely wreck the market which would make insurance unaffordable for millions and the reason why the number is so big.  You can call that "a choice", but it's a crappy one.
« Last Edit: November 15, 2017, 12:01:22 PM by PopMegaphone »

jean

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Re: Republican Tax Plan 2017
« Reply #413 on: November 15, 2017, 11:52:11 AM »

Okay, I am confused. First I read that the 457 will be treated like a 401k or 403b, meaning that any withdrawals before age 59.5 will be subjected to a 10% penalty in addition to taxes. Now I'm seeing that the 457 may be done away with altogether after 2017. Which is it?

I have a small (<$10k) 457(b) from my previous employer. Should I cash it out before the end of the year, just in case?

My understanding:
House bill - eliminates non-governmental (i.e. those held by non-profits for highly compensated employees) 457(b)s, but no changes to governmental 457bs
Senate bill - basically as you state, treated like a 403b/401k and if you have access to both, you can contribute 18,500 total combined (rather than current law, allowing 18,500 to each account type)

Final bill - ???? No one knows

If you cash out the 457b, you'll need to pay taxes.  If you planned on using that money for something other than retirement, you could cash it out (if one of these bills passes).  But I would just leave it there for retirement and treat it as a 401k.  You can get the money out through Roth conversions / SEPP.
« Last Edit: November 15, 2017, 11:53:55 AM by jean »

desertadapted

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Re: Republican Tax Plan 2017
« Reply #414 on: November 15, 2017, 01:14:18 PM »
According to Forbes, the Senate bill destroys 457(b)'s by imposing an $18,000 aggregate cap on 401(a)/457(b) (now it's $18,000 in each), and by imposing the 10% early withdrawal penalty (at 59 1/2) on 457(b)'s.  Yet another way that the current tax plan is going to substantially increase my tax liability and jack up my FIRE plans in order to pay for tax cuts for corporations.  So stoked about that.
https://www.forbes.com/sites/ashleaebeling/2017/11/10/the-senate-401k-grab/#78bb03136360

OurTown

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Re: Republican Tax Plan 2017
« Reply #415 on: November 15, 2017, 02:10:41 PM »
Shorter version of the Republican Tax Plan:  it's a big middle finger to the millionaire next door types. 

PopMegaphone

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Re: Republican Tax Plan 2017
« Reply #416 on: November 15, 2017, 02:33:13 PM »
Shorter version of the Republican Tax Plan:  it's a big middle finger to the millionaire next door types.

In the last 40 years the top %0.01 have milked the lower and middle class in this country dry.   It's the upper middle class's turn.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #417 on: November 15, 2017, 02:55:50 PM »


This looks like a pile of shit.
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jean

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Re: Republican Tax Plan 2017
« Reply #418 on: November 15, 2017, 04:25:09 PM »
If nothing is passed before the end of 2017, what happens?  Can they pass in early 2018 and have it go into effect for all of 2018, even though the year already started? 

I wish they would have taken more time if they wanted to make such huge overhauls to the tax code.  I'm a bit concerned whether I should change anything with my spouse's 457b contributions (takes ~2 months for a change to run through payroll).  I'm not changing anything, but I'm curious. 

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #419 on: November 15, 2017, 04:27:36 PM »


This looks like a pile of shit.

Not sure where you found that, but it is more a pile of extreme opinions based upon emotion than any kind of factual analysis. 
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

boarder42

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Re: Republican Tax Plan 2017
« Reply #420 on: November 15, 2017, 04:42:02 PM »
If nothing is passed before the end of 2017, what happens?  Can they pass in early 2018 and have it go into effect for all of 2018, even though the year already started? 

I wish they would have taken more time if they wanted to make such huge overhauls to the tax code.  I'm a bit concerned whether I should change anything with my spouse's 457b contributions (takes ~2 months for a change to run through payroll).  I'm not changing anything, but I'm curious.

Yes they can
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frugalecon

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Re: Republican Tax Plan 2017
« Reply #421 on: November 15, 2017, 05:29:26 PM »
If nothing is passed before the end of 2017, what happens?  Can they pass in early 2018 and have it go into effect for all of 2018, even though the year already started? 

I wish they would have taken more time if they wanted to make such huge overhauls to the tax code.  I'm a bit concerned whether I should change anything with my spouse's 457b contributions (takes ~2 months for a change to run through payroll).  I'm not changing anything, but I'm curious.

Yes they can

Even if nothing passes in 2017, I am considering accelerating planned charitable contributions into 2017 for exactly this reason. I worry that elimination of SALT deductibility will effectively negate the tax deductibility of charitable contributions for me, and I have committed to a multi-year gift for a charity.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #422 on: November 15, 2017, 05:32:51 PM »


This looks like a pile of shit.

Not sure where you found that, but it is more a pile of extreme opinions based upon emotion than any kind of factual analysis.

What's opinion? It's pulled from the CBO.
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FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #423 on: November 15, 2017, 05:54:33 PM »


This looks like a pile of shit.

Not sure where you found that, but it is more a pile of extreme opinions based upon emotion than any kind of factual analysis.

What's opinion? It's pulled from the CBO.

LOL.  Link??  Just because that mentioned CBO and JCT it doesn't mean that the bullets presented are accurate.  Have you read the draft bills for the House and Senate and ran the new brackets through any projections?  I have, and can assure you that while I'm not a big fan of a lot of what is in the bills, those "facts" are mostly hyperbole, exaggerations and just plain mis-information.  Where on earth did you find that?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

inline five

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Re: Republican Tax Plan 2017
« Reply #424 on: November 15, 2017, 05:57:38 PM »
I think if they dropped the estate tax part they could get it. I don't know why they are so focused on it. Maybe because Trump is pushing for it (hmmm?!?).

Our healthcare system is unaffordable for even minor things, we still haven't actually addressed that issue.

I am saddened that they are anti-SALT but allow you to deduct property tax. That seems counter intuitive. I know why they are doing it (blue states have higher local taxes), but again I'd think they'd have more votes if they do both.

I would personally prefer tax simplification over a tax reduction for starters.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #425 on: November 15, 2017, 07:50:05 PM »

I would personally prefer tax simplification over a tax reduction for starters.

You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

dragoncar

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Re: Republican Tax Plan 2017
« Reply #426 on: November 15, 2017, 08:15:49 PM »

I would personally prefer tax simplification over a tax reduction for starters.

You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?

I'd rather be rich than stupid

jean

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Re: Republican Tax Plan 2017
« Reply #427 on: November 15, 2017, 09:37:23 PM »
Even if nothing passes in 2017, I am considering accelerating planned charitable contributions into 2017 for exactly this reason. I worry that elimination of SALT deductibility will effectively negate the tax deductibility of charitable contributions for me, and I have committed to a multi-year gift for a charity.

I'm looking into Donor Advised Fund for 2017.  I won't be surprised if they are very popular this year.

inline five

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Re: Republican Tax Plan 2017
« Reply #428 on: November 15, 2017, 10:09:03 PM »

I would personally prefer tax simplification over a tax reduction for starters.

You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?

I spend countless hours putting my taxes together. I have significant write offs due to traveling and taking an M&IE rate vs what the company pays me. It's quite tedious and the record keeping is immense.

So yes, I would much rather take a standard deduction and just be done with it. It's a great place to start for 95% of US households.

Let's revisit the whole tax cuts when we're running deficits later.

sokoloff

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Re: Republican Tax Plan 2017
« Reply #429 on: November 15, 2017, 11:07:09 PM »
You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?
I spend countless hours putting my taxes together. I have significant write offs due to traveling and taking an M&IE rate vs what the company pays me. It's quite tedious and the record keeping is immense.

So yes, I would much rather take a standard deduction and just be done with it. It's a great place to start for 95% of US households.
You're allowed to do that now if you'd "much rather" do it.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #430 on: November 15, 2017, 11:23:59 PM »

I would personally prefer tax simplification over a tax reduction for starters.

You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?

I spend countless hours putting my taxes together. I have significant write offs due to traveling and taking an M&IE rate vs what the company pays me. It's quite tedious and the record keeping is immense.

So yes, I would much rather take a standard deduction and just be done with it. It's a great place to start for 95% of US households.

Let's revisit the whole tax cuts when we're running deficits later.

We're running deficits right now!  We'll run them in 2018.  Pretty sure we'll run them forever.  So, when exactly do you want to revisit??
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dresden

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Re: Republican Tax Plan 2017
« Reply #431 on: November 16, 2017, 05:14:50 AM »
This article is interesting and confirms something almost all of us already knew:

https://www.cnbc.com/2017/11/15/ceos-raise-doubts-about-gary-cohns-top-argument-for-cutting-the-corporate-tax-rate-right-in-front-of-him.html

We all know how it works - CEOs will either pass the tax savings on immediately to shareholders via a dividend or buy-back or they will invest the money to raise profits in the future- maybe robotics technology investment.   A small percentage of that will actually generate US jobs.

As for tax cut, I would get a tax cut under the house plan and an increase under the senate plan.

"Getting rid of loopholes for special interest" = tax the hell out of the middle class and upper middle class living in high cost areas.

Considering the size of our deficit and growing wealth disparity, upper middle class probably should get a tax increase and the wealthy an even bigger increase.   The changes to Inheritance tax, pass through rate and to a lesser extent AMT primarily benefit the super wealthy.



« Last Edit: November 16, 2017, 05:23:42 AM by dresden »

EscapeVelocity2020

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Re: Republican Tax Plan 2017
« Reply #432 on: November 16, 2017, 07:03:57 AM »
Considering the size of our deficit and growing wealth disparity, upper middle class probably should get a tax increase and the wealthy an even bigger increase.   The changes to Inheritance tax, pass through rate and to a lesser extent AMT primarily benefit the super wealthy.

This is all so obvious, and yet the majority does nothing about it.  http://fortune.com/2017/11/14/credit-suisse-millionaires-millennials-inequality/

Quote
The richest 1% now owns more than half of all the world’s household wealth, according to analysts at Credit Suisse. And they say inequality is only going to get worse over the coming years, with millennials having a particularly tough time.
Transitioning to FIRE'd albeit somewhat cautiously...

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #433 on: November 16, 2017, 08:08:54 AM »
LOL.  Link??  Just because that mentioned CBO and JCT it doesn't mean that the bullets presented are accurate.  Have you read the draft bills for the House and Senate and ran the new brackets through any projections?  I have, and can assure you that while I'm not a big fan of a lot of what is in the bills, those "facts" are mostly hyperbole, exaggerations and just plain mis-information.  Where on earth did you find that?

https://finance.yahoo.com/news/cbo-house-gop-tax-plan-triggers-25-billion-medicare-cuts-195501778.html

Quote
The effects of this sequestration order would trigger automatic cuts to various programs, including Medicare. According to the CBO, this could be as much as 4% for Medicare, which amounts to $25 billion in 2018.

A bunch of sources cite "4% reduction in Medicare."

https://docs.google.com/spreadsheets/d/1h8m6juta8WvGN384htGIFMDsg0wjXlQaSN9ASye4G2I/edit#gid=0

Ernie Tedeschi, former US Treasury economist, pulled this together.



^This is 2027.

Quote
But last night, Orrin Hatch took a hatchet to his party’s tax legislation, and ended up achieving the seemingly impossible: The Utah senator found a way to keep the plan’s giant corporate tax cuts permanent, make its middle-class tax cuts more generous (in the near term), and cut the overall cost of tax package to $0 in 2028.

Hatch’s trick: Phase out (virtually) every tax cut that doesn’t benefit corporations in 2026, while also throwing 13 million people off of health insurance. The upshot of this is that, next year, almost no middle-income families lose out from the bill, and most upper-middle-class households come out ahead.

http://nymag.com/daily/intelligencer/2017/11/new-gop-tax-cut-plan-raises-taxes-on-almost-everyone-by-2027.html

http://www.cnn.com/2017/11/15/politics/individual-mandate-tax-reform/index.html

Quote
Roughly 4 million fewer people would be covered in the first year the repeal would take effect, the Congressional Budget Office said last week, rising to 13 million by 2027, as compared to current law.
Premiums would also rise by about 10% in most years of the decade, CBO said.



Tedeschi is using the model from @PolicyBrains.

Quote
The provision that will have the most catastrophic effect on disabled people is the removal of the deduction for out-of-pocket medical expenses. Currently, if your out-of-pocket medical expenses exceed 10 percent of your adjusted gross income, you can deduct that from your tax bill. In the Jobs and Tax Cuts Bill, that provision is excised completely.

Quote
Another provision that specifically affects disabled people is the elimination of a tax credit granted to businesses to comply with the Americans with Disabilities Act, or ADA. Businesses that, for example, wish to build a ramp, hire a sign language interpreter, or make their website more accessible can no longer claim this exemption.

Quote
Tax credits for adoption and for disabled and retired people would be eliminated.

https://www.thedailybeast.com/the-gops-tax-bill-is-a-war-on-disabled-people

https://www.brookings.edu/blog/up-front/2017/11/03/9-things-to-know-about-the-house-gop-tax-plan/

Quote
Former students won’t be able to deduct student loan interest.

Quote
The House tax bill eliminates the $2,500 tax deduction for student-loan interest, the $2,000 Lifetime Learning Credit, and an income exemption from paying income taxes on employer-provided funds for post-secondary education. Several of the provisions will even raise tuition costs.

https://www.thenation.com/article/the-gop-tax-bill-is-bad-for-students/

http://money.cnn.com/2017/11/02/pf/taxes/alimony-gop-tax-plan-deduction/index.html

Quote
One tax break on the chopping block in the House Republicans' tax reform bill -- alimony payments.

Quote
The cuts in individual tax rates, the bump in the standard deduction and the larger child tax credit, among other things — all these would end at the end of 2025, as would proposed tax cuts for "pass-through" entities — businesses that pay taxes through the individual income tax code. However, many changes on the corporate side, which are centered on a rate cut from 35 to 20 percent, would remain permanent, as would the proposed elimination of the individual mandate penalty.

https://www.npr.org/2017/11/15/564323858/senate-plan-now-makes-individual-tax-cuts-temporary-keeps-corporate-cuts-permane

Quote
The Tax Policy Center (TPC) estimates of the Trump and congressional Republican framework show that in 2027 (when key features of the plan are in full effect):

-The top 1 percent of households (those with incomes above $912,100) would get 80 percent of the framework’s net tax cuts (see Figure 1), or more than $200,000 annually (an 8.7 percent boost in after-tax income), on average.

-The top 0.1 percent of households (those with incomes above $5.1 million) would get 40 percent of the framework’s net tax cuts, or more than $1 million annually (a 9.7 percent boost in after-tax income), on average.

-Meanwhile, the bottom 80 percent of the population would get less just 13 percent of the tax cuts and see a less than 0.5 percent increase in after-tax income, on average.

https://www.cbpp.org/research/federal-tax/big-six-tax-framework-provides-windfall-to-high-income-households-with-working

Quote
The House GOP plan would eliminate the estate tax, under which people who give money or assets such as real estate or stocks to their children or other heir when they die have to pay a 40% tax. Currently, the tax only applies to estates larger than $5.49 million, but the House plan would double that threshold to over $10 million. Then, the plan would phase out the tax completely after six years.

Trump has touted the repeal as a perk for farmers and small businesses owners. An analysis by The Washington Post, however, found that only 5,500 estates out of about 3 million will pay any estate tax in 2017. And within that 5,500, only about 80 are farms or small businesses.

http://www.businessinsider.com/trump-tax-plan-rich-people-benefits-2017-11/#higher-income-taxpayers-will-get-the-largest-tax-cuts-1

Quote
Hidden among massive corporate tax breaks and the other items on their long standing wish list is a curious provision allowing families to open 529 educational savings accounts for "unborn children" – essentially college plans for fetuses.

https://www.cnbc.com/2017/11/14/gop-tax-bill-is-no-place-to-address-rights-of-the-unborn-commentary.html

Enough sources for you?

Just because you don't like the facts doesn't mean they aren't facts.

This tax plan is a pile of shit designed solely to help the top 0.1% of this country.  Period.
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desertadapted

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Re: Republican Tax Plan 2017
« Reply #434 on: November 16, 2017, 10:04:39 AM »
@darkandstormy
And this one:
https://www.washingtonpost.com/news/wonk/wp/2017/11/16/senate-tax-bill-cuts-taxes-of-wealthy-and-hikes-taxes-of-families-earning-under-75000-over-a-decade/?hpid=hp_hp-top-table-main_senatetax-1125a%3Ahomepage%2Fstory&utm_term=.2625337459ea

The tax bill Senate Republicans are championing would give large tax cuts to millionaires while raising taxes on American families earning $10,000 to $75,000 over the next decade, according to a report released Thursday by the Joint Committee on Taxation, Congress' official nonpartisan analysts.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #435 on: November 16, 2017, 11:33:58 AM »
Enough sources for you?

Just because you don't like the facts doesn't mean they aren't facts.

This tax plan is a pile of shit designed solely to help the top 0.1% of this country.  Period.

Yep, that's much more than expected.  Thanks for the most thorough response.  Do you know where the "elimination of capital gains taxes for rich kids" comes from?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

RangerOne

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Re: Republican Tax Plan 2017
« Reply #436 on: November 16, 2017, 11:37:16 AM »
For a family of with 1 or more child in California the amount we are getting fucked by either bill is easy to calculate. And it all comes down to the complete elimination of a tax break for home owners.

Currently even dwelling entirely in the 15% tax bracket, a median priced home purchase at $500k in a place like San Diego roughly results in:

First Year Deductions:
$20k mortgage interest
$6k property taxes
$4k cali income tax: Assuming around $120k income

That is on top of personal exemptions for a family of 4 so add:
$16k

So a family of 4 buying a new home gets to write off $46k. By today's calculation that is a rough $17k advantage over taking a standard deduction. Even if all the extra 17k break is in the 15% bracket that is still $2500 dollars back in my pocket or about $212 dollars a month. That is a really big break off the cost to carry a home. Its nearly $350 dollars off a month if you are saving all the money form the 25% bracket...

Get ride of personal exemptions and SALT and I am basically left with roughly $30k in standard deduction with kids, assuming I don't get phased out of the child tax credit. So they are effectively asking me to pay an extra $200 a month and lose my home buying subsidy, to fund tax breaks for business that wont bump my pay just because of the tax break, and to multi-millionaires.

The notation that everyone will get more pay because business pay less tax is utter bullshit. No business is going to simply raise pay because they got a tax break. That decision is based entirely on other factors. The tax break will just send stocks further up as earnings get a nice bump. Who will most fortune 500 pay? Their workers or their investors? I don't think this question is hard to answer.

...

RangerOne

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Re: Republican Tax Plan 2017
« Reply #437 on: November 16, 2017, 11:43:01 AM »

I would personally prefer tax simplification over a tax reduction for starters.

You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?

I spend countless hours putting my taxes together. I have significant write offs due to traveling and taking an M&IE rate vs what the company pays me. It's quite tedious and the record keeping is immense.

So yes, I would much rather take a standard deduction and just be done with it. It's a great place to start for 95% of US households.

Let's revisit the whole tax cuts when we're running deficits later.

No one wants to do weeks worth of tax work. But if the alternative is a $5k a year tax increase, I don't want simplification...

There is a value proposition here. I am willing to suffer complex taxes if it offers me more money in my pocket. If you are not losing anything to move to a simple standard then of course that less tax BS will sound like the best option.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #438 on: November 16, 2017, 11:51:01 AM »
We're one step closer: The House passed it.



Kevin

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Re: Republican Tax Plan 2017
« Reply #439 on: November 16, 2017, 11:52:23 AM »
For a family of with 1 or more child in California the amount we are getting fucked by either bill is easy to calculate. And it all comes down to the complete elimination of a tax break for home owners.

Currently even dwelling entirely in the 15% tax bracket, a median priced home purchase at $500k in a place like San Diego roughly results in:

First Year Deductions:
$20k mortgage interest
$6k property taxes
$4k cali income tax: Assuming around $120k income

That is on top of personal exemptions for a family of 4 so add:
$16k

So a family of 4 buying a new home gets to write off $46k. By today's calculation that is a rough $17k advantage over taking a standard deduction. Even if all the extra 17k break is in the 15% bracket that is still $2500 dollars back in my pocket or about $212 dollars a month. That is a really big break off the cost to carry a home. Its nearly $350 dollars off a month if you are saving all the money form the 25% bracket...

Get ride of personal exemptions and SALT and I am basically left with roughly $30k in standard deduction with kids, assuming I don't get phased out of the child tax credit. So they are effectively asking me to pay an extra $200 a month and lose my home buying subsidy, to fund tax breaks for business that wont bump my pay just because of the tax break, and to multi-millionaires.

The notation that everyone will get more pay because business pay less tax is utter bullshit. No business is going to simply raise pay because they got a tax break. That decision is based entirely on other factors. The tax break will just send stocks further up as earnings get a nice bump. Who will most fortune 500 pay? Their workers or their investors? I don't think this question is hard to answer.

...

Its way worse than that. They have now successfully removed a majority of buyers who can purchase $500k houses. Housing prices will drop everywhere as a result. Will leave lots underwater.

Kevin

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Re: Republican Tax Plan 2017
« Reply #440 on: November 16, 2017, 11:55:20 AM »
Also FUCK the GOP, in particular fuck section 1402 of the proposed tax code. How does changing the tax free sale of a house after 2 years to 5 years help the middle class? News flash, it doesn't. I am one of those middle class families who purchased a house that needed a lot of TLC. My wife and I slow flipped the house while living in it and are now getting ready to sell. Unfortunately, if this goes into law, we will either have to wait 3 more years or sell and pay taxes on the ~$50k in profits we are forecast to make. That would be around $8k in taxes, all so we can fund the 0.01% and repeal the estate tax.

Fuck that and fuck the GOP.

Quote
SEC. 1402. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL RESIDENCE.
(a) Requirement That Residence Be Principal Residence For 5 Years During 8-Year Period.—Subsection (a) of section 121 is amended—
(1) by striking “5-year period” and inserting “8-year period”, and
(2) by striking “2 years” and inserting “5 years”.

https://www.congress.gov/bill/115th-congress/house-bill/1/text#toc-H7A8ADDE279B541D890C20C759B82ABD3
« Last Edit: November 16, 2017, 11:58:39 AM by Kevin »

protostache

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Re: Republican Tax Plan 2017
« Reply #441 on: November 16, 2017, 12:00:46 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #442 on: November 16, 2017, 12:01:01 PM »
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Undecided

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Re: Republican Tax Plan 2017
« Reply #443 on: November 16, 2017, 12:15:29 PM »
Enough sources for you?

Just because you don't like the facts doesn't mean they aren't facts.

This tax plan is a pile of shit designed solely to help the top 0.1% of this country.  Period.

Yep, that's much more than expected.  Thanks for the most thorough response.  Do you know where the "elimination of capital gains taxes for rich kids" comes from?

I think "elimination' is the wrong word, assuming this means preservation of the stepped-up basis at death, but repealing the estate tax is sort of like repealing the current tax that takes the place of (or more than takes the place of) capital gains taxes for those stepped-up basis assets that are included in a taxable estate.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #444 on: November 16, 2017, 12:19:57 PM »
I see a reasonable chance that the Senate passes their bill with only 50 votes and the house winds up just having to approve the Senate bill (instead of developing a combined bill in committee).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #445 on: November 16, 2017, 12:20:43 PM »
Enough sources for you?

Just because you don't like the facts doesn't mean they aren't facts.

This tax plan is a pile of shit designed solely to help the top 0.1% of this country.  Period.

Yep, that's much more than expected.  Thanks for the most thorough response.  Do you know where the "elimination of capital gains taxes for rich kids" comes from?

I think "elimination' is the wrong word, assuming this means preservation of the stepped-up basis at death, but repealing the estate tax is sort of like repealing the current tax that takes the place of (or more than takes the place of) capital gains taxes for those stepped-up basis assets that are included in a taxable estate.

Thanks.  That makes perfect sense.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

BFGirl

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Re: Republican Tax Plan 2017
« Reply #446 on: November 16, 2017, 12:21:33 PM »
Whoa, didn't realize that deferred compensation was also being axed. I take part in a 409a plan with my company, and while it's less than 10% of my income, the taxes on that income alone pushes my family back into the "this new plan increases my taxes" group. Is it just me, or as this plan begins to get carefully dissected, does it not seem like the number of constituencies that will be against it continue to pile up?

Are the 457b changes applicable to governmental entities?  I'm having a hard time figuring this out.
http://www.napa-net.org/news/technical-competence/legislation/could-tax-reform-destroy-deferred-compensation/

The 457(b) goes away.


SAD!

Well that sucks.   I was about to participate in this for the first time, so this will definitely screw me on my tax planning.

Same. This Friday's check will be the first deduction lol.

Okay, I am confused. First I read that the 457 will be treated like a 401k or 403b, meaning that any withdrawals before age 59.5 will be subjected to a 10% penalty in addition to taxes. Now I'm seeing that the 457 may be done away with altogether after 2017. Which is it?

I have a small (<$10k) 457(b) from my previous employer. Should I cash it out before the end of the year, just in case?

Do the 457b changes apply to governmental entities?  I'm having a hard time figuring it out
« Last Edit: November 16, 2017, 12:24:54 PM by BFGirl »

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #447 on: November 16, 2017, 12:22:53 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

So, will the $1.5T over ten years actually increase the debt; or will it just force sequestration of an additional $1.5T in expenditures?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #448 on: November 16, 2017, 12:24:38 PM »
Enough sources for you?

Just because you don't like the facts doesn't mean they aren't facts.

This tax plan is a pile of shit designed solely to help the top 0.1% of this country.  Period.

Yep, that's much more than expected.  Thanks for the most thorough response.  Do you know where the "elimination of capital gains taxes for rich kids" comes from?

Quote
House Republicans will maintain the "step-up" in basis, which allows heirs to receive assets at the market value on the day the original owner died.

Beneficiaries save on capital gains taxes if they were to sell the asset immediately after inheriting it.

https://www.cnbc.com/2017/11/03/the-good-the-bad-and-the-money-what-the-gop-tax-plan-means-for-you.html

So your parent is a rich billionaire who dies and passes along to you $1 billion in invested assets.  You could sell immediately upon inheriting it and pay no tax on it.
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PopMegaphone

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Re: Republican Tax Plan 2017
« Reply #449 on: November 16, 2017, 12:25:42 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

So, will the $1.5T over ten years actually increase the debt; or will it just force sequestration of an additional $1.5T in expenditures?

That 1.5T is roughly $4,600 in debt for every man woman and child in the USA.