Author Topic: Republican Tax Plan 2017  (Read 72129 times)

RangerOne

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Re: Republican Tax Plan 2017
« Reply #550 on: November 18, 2017, 08:32:53 AM »

Now, are we even sure he new tax plan won't allow deductions on rental property? Typically that would be viewed as a business expense. The current plan mentions only personal property IIRC.

Hm you may be right about that. I believe commercial property tax breaks are intact. And even second homes used as rentals are subject to different taxes.... So maybe they do still get breaks.

jean

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Re: Republican Tax Plan 2017
« Reply #551 on: November 18, 2017, 09:29:54 AM »
I pay a bit under $20k in mortgage interest, $11k in property taxes, about $9k in state taxes, no kids.   

That is just WOW to me jean. Those totals are what I spent in TOTALITY in 2016. 1200 square foot house, 1 1/2 acres. No mortgage.

I just can not comprehend these numbers. Do you live on a coast? I live in WI, about 70 miles from Chicago.
Yes, a coast and an extremely expensive area. I grew up in a low cost area, so I understand where you are coming from. Besides the fact we like it here, the jobs we have are not portable to low cost areas.  If FIRE (rather than FI) were our prime goal, we'd cash out and retire to a lower cost area when we were ready to RE. That's not really the plan, but an option. I'm a fan of RE in states with strong social programs (generally higher tax states), but could choose a different specific city.

Jantoven

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Re: Republican Tax Plan 2017
« Reply #552 on: November 18, 2017, 02:55:42 PM »

Yes, a coast and an extremely expensive area. I grew up in a low cost area, so I understand where you are coming from. Besides the fact we like it here, the jobs we have are not portable to low cost areas.  If FIRE (rather than FI) were our prime goal, we'd cash out and retire to a lower cost area when we were ready to RE. That's not really the plan, but an option. I'm a fan of RE in states with strong social programs (generally higher tax states), but could choose a different specific city.

I feel you.  We are in a similar situation - live in a coastal city with a modestly sized yet very expensive home.  Just like you, I don't know if FIRE is our ultimate goal at this point, but we are at least trending towards FI.  If FIRE ever becomes the goal, then we could always sell and move to a LCOL area.  But both of our entire families and friend network are out here, and we have to admit we really do love the ideal weather as well. 

This bill will hurt, but I have come to accept that it'll cost us.  If we ever decide it's no longer worthwhile, then I suppose we can always uproot, as I mentioned.

Livewell

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Re: Republican Tax Plan 2017
« Reply #553 on: November 19, 2017, 09:10:49 AM »
I live in CA, and will get hurt by the SALT exclusion, although lower rates will take some sting out.  Still likely to pay more from what Iíve seen.

This bill is such a naked gift to Republican big donors that they will never get a democratic senator to vote for it.  Including taking out the individual mandate of the ACA is likely IMO to make a couple of senators defect (at least).   Deficit chickens may grow some balls as the numbers come in.  Flake and Corker have nothing to lose.  Can McConnell and team find concessions to bring everyone around? There is no guarantee this thing passes. 


RangerOne

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Re: Republican Tax Plan 2017
« Reply #554 on: November 19, 2017, 10:59:12 AM »
It faced less oppositio in the house and passed in one shot. The outcry against it is more mixed than the ACA repeal. Thought pills show 60%ish disapprove almost all independents and Dems. It doesn't really hurt the republian base.

I think they will argue and modify but it's pretty clear the agree on the parts I dislike most... So the mods may not help. All we can hope is they hedge their bet and add a few more kick backs for the middle class which may smooth over the lose of itimization for some families.

But I think the pressure to pass something in the Senate to pass something is ultra high. I don't think it will be hard to get unity to pass somethibg very close to what we have.

Jantoven

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Re: Republican Tax Plan 2017
« Reply #555 on: November 19, 2017, 11:06:35 AM »
It faced less oppositio in the house and passed in one shot. The outcry against it is more mixed than the ACA repeal. Thought pills show 60%ish disapprove almost all independents and Dems. It doesn't really hurt the republian base.

I think they will argue and modify but it's pretty clear the agree on the parts I dislike most... So the mods may not help. All we can hope is they hedge their bet and add a few more kick backs for the middle class which may smooth over the lose of itimization for some families.

But I think the pressure to pass something in the Senate to pass something is ultra high. I don't think it will be hard to get unity to pass somethibg very close to what we have.

I agree.  I think the final bill will look different than what we see now, but it does seem that SALT is probably going to be severely curbed, which will ultimately impact CA/NY/NJ.  I can't imagine the GOP will want to carry the burden of saying they failed at both ACA reform AND tax reform, so I am basically resigned to the fact that tax reform will be passed and will carry a lot of the same elements we currently see.

starguru

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Re: Republican Tax Plan 2017
« Reply #556 on: November 19, 2017, 11:44:54 AM »
I have a feeling we are going to be hit pretty hard.   We have:

30k state taxes
8k mortgage interest
8k property tax
And various other minor deductions that sound like they will all go away. 

I could stomach all that if I knew that the romneys and kochs and trumps of the world were paying the same rate as me, but it seems like we are not there yet....


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Jantoven

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Re: Republican Tax Plan 2017
« Reply #557 on: November 19, 2017, 02:58:37 PM »
I have a feeling we are going to be hit pretty hard.   We have:

30k state taxes
8k mortgage interest
8k property tax
And various other minor deductions that sound like they will all go away. 

I could stomach all that if I knew that the romneys and kochs and trumps of the world were paying the same rate as me, but it seems like we are not there yet....


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Yeah, that's the kicker.  I'm okay paying more taxes if I felt it was going towards helping the unfortunate, the sick, etc.  But the proposed elimination of student loan interest and medical deductions pretty much says it all. 

Bucksandreds

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Re: Republican Tax Plan 2017
« Reply #558 on: November 19, 2017, 03:05:19 PM »
I have a feeling we are going to be hit pretty hard.   We have:

30k state taxes
8k mortgage interest
8k property tax
And various other minor deductions that sound like they will all go away. 

I could stomach all that if I knew that the romneys and kochs and trumps of the world were paying the same rate as me, but it seems like we are not there yet....


Sent from my iPhone using Tapatalk

Yeah, that's the kicker.  I'm okay paying more taxes if I felt it was going towards helping the unfortunate, the sick, etc.  But the proposed elimination of student loan interest and medical deductions pretty much says it all.


But, but, but. Trickle down. Fake news. Didnít Orin Hatch let us all know that since he grew up lower middle class that it proves this bill isnít for the rich?

sol

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Re: Republican Tax Plan 2017
« Reply #559 on: November 19, 2017, 04:12:39 PM »
I would even be okay with paying more taxes if it DIDN'T help the poor and unfortunate, if it was at least going to reduce the deficit.  Instead, this bill makes the deficit even worse.  Trillions of dollars worse, once you account for the interest on the new debt it will create.

That's really the primary motivation of the GOP tax platform.  It basically only does one thing: it permanently cuts the corporate tax rate from 35 to 20%, and it drives the country into debt to do it.  Everything else is a sideshow.  The individual bracket changes, the loopholes and deductions, the individual mandate repeal, they're basically all trivial details when compared to the multitrillion dollar impact of going into debt to pay for corporate tax cuts. 

Whether or not you or I pay a little more or a little less almost doesn't matter, in that context.  This bill isn't about US citizens, it's about US corporations and how much debt they can offload to US taxpayers in their pursuit of higher profits.
« Last Edit: November 20, 2017, 10:51:44 PM by sol »

Peter Parker

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Re: Republican Tax Plan 2017
« Reply #560 on: November 19, 2017, 05:35:16 PM »
This whole Republican Tax Plan is yet another example of people voting against their own interests.  For the life of me, I don't get it....

sol

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Re: Republican Tax Plan 2017
« Reply #561 on: November 19, 2017, 05:38:45 PM »
This whole Republican Tax Plan is yet another example of people voting against their own interests.  For the life of me, I don't get it....

What's not to get?  As soon as you realize whose interests they are serving, it all makes perfect sense.

Hint: not the interests of their voters.

RhodyUNC

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Re: Republican Tax Plan 2017
« Reply #562 on: November 19, 2017, 06:20:05 PM »
I make a nice living. A little into the six figure category, family of 4. Certainly not poor, likely top 10% of family income. Not necesarily middle class, likely upper middle class, but certainly not wealthy/rich/ultra high earner by most standards.

I just ran all the numbers for my scenario based on everything I read. Best case scenario, my taxes would go up by about $800. Taxable income will increase $19k but the lower rates keep the increase reasonable. It's still an increase. Most people who itemize will end up paying more due to the loss of exemptions.

It doesn't really impact my FIRE plans, but it sure pisses me off knowing I'm paying more for this proposed "middle class tax cut" while people much more well off than me will pay substantially less.

Even worse for me.  With my giving to charitable causes, mortgage interest deduction, and property taxes kick me way the new standard deduction.  I make to much to get the tax credit for my four kids so I lose their deduction power.  I also lose the dependent care tax credit.  And yet my tax rate stays the same.  By my count I'm staring at a ~$6,000 increase in taxes. 

Not a tax cut for many of us. 

SwordGuy

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Re: Republican Tax Plan 2017
« Reply #563 on: November 19, 2017, 06:46:25 PM »
If the state and local income tax deduction on federal taxes is repealed, I'm suggesting to my state assembly members that they repeal our state income tax and institute a new property tax.

The property tax will only be on newly acquired property.   The only property of interest will be property acquired as salary, capital gains, etc.

Because, as we all know, "dollars" are property too.

Said "dollar property" will be calculated in the exact same way the old income tax was calculated.  :)

Don't know whether it would get thru the GOP-controlled state assembly.

If it did, we would all save a bunch in taxes and it would be a big FU to the national GOP by the state GOP.

If it didn't, we would all pay a bunch in taxes and it would be the state and national GOP's fault, but not the state and national Democrat's fault.

It's worth a try.

sol

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Re: Republican Tax Plan 2017
« Reply #564 on: November 19, 2017, 06:50:40 PM »
Not a tax cut for many of us.

If your estate is more than $11,000,000 when you die, then your kids get a 100% tax cut on their inheritance!

That's how we're going to MAGA.  Nevermind crumbling infrastructure, skyrocketing deficits, and eroding freedoms.  Billionaire inheritors like Donald Trump will get those tax breaks they so desperately need.

cairnstone

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Re: Republican Tax Plan 2017
« Reply #565 on: November 19, 2017, 07:16:32 PM »
I make a nice living. A little into the six figure category, family of 4. Certainly not poor, likely top 10% of family income. Not necesarily middle class, likely upper middle class, but certainly not wealthy/rich/ultra high earner by most standards.

I just ran all the numbers for my scenario based on everything I read. Best case scenario, my taxes would go up by about $800. Taxable income will increase $19k but the lower rates keep the increase reasonable. It's still an increase. Most people who itemize will end up paying more due to the loss of exemptions.

It doesn't really impact my FIRE plans, but it sure pisses me off knowing I'm paying more for this proposed "middle class tax cut" while people much more well off than me will pay substantially less.

Even worse for me.  With my giving to charitable causes, mortgage interest deduction, and property taxes kick me way the new standard deduction.  I make to much to get the tax credit for my four kids so I lose their deduction power.  I also lose the dependent care tax credit.  And yet my tax rate stays the same.  By my count I'm staring at a ~$6,000 increase in taxes. 

Not a tax cut for many of us. 

Did you take into account the increase in the maximum income to qualify for the child tax credit? That will probably be enough to make this new tax law about equivalent for me if it passes as-is (5 kids in high tax state).

Jantoven

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Re: Republican Tax Plan 2017
« Reply #566 on: November 19, 2017, 08:00:24 PM »

I would even be okay with paying more taxes if it DIDN'T help the poor and unfortunate, if it was at least going to reduce the deficit.  Instead, this bill makes the deficit even worse.  Trillions of dollars worse, once you account for the interest on the new debt it will create.

That's really the primary motivation of the GOP tax platform.  It basically only does one thing: it permanently cuts the corporate tax rate from 35 to 20%, and it drives the country into debt to do it.  Everything else is a sideshow.  The individual bracket changes, the loopholes and deductions, the individual mandate repeal, they're basically all trivial details when compared to the multitrillion dollar impact of going into debt to pay for corporate tax cuts. 

Whether or not you or I pay a little more or a little less almost doesn't matter, in that context.  This bill isn't about US citizens, it's about US corporations and how much debt they can offload to US taxpayers in their pursuit of higher profits.

I fully agree.  I work for a large Health Care organization that has been recording "record profits" quarterly for many years now.  Have we, the workers, seen any significant kind of pay increase as a result of record breaking profits?  No.  It appears the trickle down economics is.. not trickling down.  Shocker, eh?

And that's the thing with this proposed bill.  The corporations will pocket more money.  Will the workers see significant raises and windfalls as a result?    LOL.

RhodyUNC

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Re: Republican Tax Plan 2017
« Reply #567 on: November 19, 2017, 08:03:03 PM »
I did not see this.  Thanks for pointing out that it's changing.  Not sure what the new phase out rate would be but helpful to know it's higher.

This calculator was helpful in understanding the differences between the house and senate plans for us. 

https://www.marketwatch.com/story/the-new-trump-tax-calculator-what-do-you-owe-2017-10-26

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #568 on: November 19, 2017, 08:23:18 PM »
I wonder what the sentiment will be when most people find that their first paycheck in the new year is a little fatter.

MMMarbleheader

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Re: Republican Tax Plan 2017
« Reply #569 on: November 19, 2017, 08:30:52 PM »
Did the language about changing the capital gains exemption on home sales from 2 years to 5 stay in the bill? I am in year 1 of a live in flip and not sure I want to stay here for 5 years

Jantoven

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Re: Republican Tax Plan 2017
« Reply #570 on: November 19, 2017, 08:32:57 PM »
Did the language about changing the capital gains exemption on home sales from 2 years to 5 stay in the bill? I am in year 1 of a live in flip and not sure I want to stay here for 5 years

So far, it appears that both bills have that feature in it, I believe. 

sol

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Re: Republican Tax Plan 2017
« Reply #571 on: November 19, 2017, 08:41:19 PM »
I wonder what the sentiment will be when most people find that their first paycheck in the new year is a little fatter.

I suspect the news coverage will highlight that this little pay bump is a temporary measure and their taxes will go back up even higher than they were before, and that the GOP only gifted you that temporary bump to garner votes for passage for those corporations.  Will people care?  Hey man, $50 is $50 and if some multinational gets to bank an extra billion at the same time who am I to turn down $50? 

Besides, the huge increase in the national debt that would result from this plan (for so many reasons that I need a whole separate post) will be a problem for my kids and grandkids, not for me, and hey I still go this $50 extra burning a hole in my pocket.

Kenbo

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Re: Republican Tax Plan 2017
« Reply #572 on: November 19, 2017, 08:44:45 PM »

I would even be okay with paying more taxes if it DIDN'T help the poor and unfortunate, if it was at least going to reduce the deficit.  Instead, this bill makes the deficit even worse.  Trillions of dollars worse, once you account for the interest on the new debt it will create.

That's really the primary motivation of the GOP tax platform.  It basically only does one thing: it permanently cuts the corporate tax rate from 35 to 20%, and it drives the country into debt to do it.  Everything else is a sideshow.  The individual bracket changes, the loopholes and deductions, the individual mandate repeal, they're basically all trivial details when compared to the multitrillion dollar impact of going into debt to pay for corporate tax cuts. 

Whether or not you or I pay a little more or a little less almost doesn't matter, in that context.  This bill isn't about US citizens, it's about US corporations and how much debt they can offload to US taxpayers in their pursuit of higher profits.

I fully agree.  I work for a large Health Care organization that has been recording "record profits" quarterly for many years now.  Have we, the workers, seen any significant kind of pay increase as a result of record breaking profits?  No.  It appears the trickle down economics is.. not trickling down.  Shocker, eh?

And that's the thing with this proposed bill.  The corporations will pocket more money.  Will the workers see significant raises and windfalls as a result?    LOL.

One thing that scares me as a health care worker is I expect my employer to benefit from the tax reduction but how hard will the medicare reduction hit that. 

I think the whole trickle down is just one more excuse to use in order to serve their pockets.  Everything about this bill is just absurd.  Economy is running just fine, deficit continues to grow and this will just exacerbate that, the only real winners are corporations and the super wealthy.  Just let that income inequality grow, baby. 

As a Kansan I know how this story goes and will be interested in 3-7 years for the next tax bill to come along.  The only real question is how much damage they can cause between now and then.

sol

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Re: Republican Tax Plan 2017
« Reply #573 on: November 19, 2017, 08:53:21 PM »
Everything about this bill is just absurd.  Economy is running just fine, deficit continues to grow and this will just exacerbate that, the only real winners are corporations and the super wealthy.  Just let that income inequality grow, baby. 

Right, the basic tenant of Keynesian economics is that government needs to smooth out the business cycle, not only by stimulating the economy in bad times (lowering taxes and increase government spending in times of recession ala George Bush Jr in 2008/9), but also by putting the brakes on in the really great bubble times (raising taxes and cutting government subsidies).  For some reason, Republicans are fully wedded to tax cuts for the wealthy completely independently of whatever the economy is doing.  Tax cuts can totally help, sometimes, but now is clearly not one of those times.  The economy is frothy bubble terrific!  Now is the time to raise taxes so we can pay down the deficits we incurred during the last recession.

Quote
As a Kansan I know how this story goes and will be interested in 3-7 years for the next tax bill to come along.  The only real question is how much damage they can cause between now and then.

In a few years, when the economy is suffering as a result of this tax plan, if republicans are in power they will claim they need to cut medicaid and medicare and social security to make up for the losses incurred by their corporate cut.  If democrats are in power, republicans will blame democrats for their "irresponsible spending".   So from the GOP perspective, they can't really lose.  They either get to eviscerate the Great Society, or return to their favorite position of outspoken minority violently criticizing the adults in charge of the economy.

Mr Mark

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Re: Republican Tax Plan 2017
« Reply #574 on: November 19, 2017, 08:59:44 PM »
Anyone know what the impact might be on capital gains tax rates for qualified div & LTCG?

Is there a big impact on post-FIRE income calculations and Roth ladders?
Mr. Mark

Jantoven

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Re: Republican Tax Plan 2017
« Reply #575 on: November 19, 2017, 09:00:16 PM »

One thing that scares me as a health care worker is I expect my employer to benefit from the tax reduction but how hard will the medicare reduction hit that. 

I think the whole trickle down is just one more excuse to use in order to serve their pockets.  Everything about this bill is just absurd.  Economy is running just fine, deficit continues to grow and this will just exacerbate that, the only real winners are corporations and the super wealthy.  Just let that income inequality grow, baby. 

As a Kansan I know how this story goes and will be interested in 3-7 years for the next tax bill to come along.  The only real question is how much damage they can cause between now and then.

Right.  The cuts to Medicare will come, which will lead to an eventual decrease in "entitlement" programs.  Reductions in social security, medicare and health care coverage, etc.  It's very concerning...

dragoncar

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Re: Republican Tax Plan 2017
« Reply #576 on: November 20, 2017, 12:02:51 AM »
If the state and local income tax deduction on federal taxes is repealed, I'm suggesting to my state assembly members that they repeal our state income tax and institute a new property tax.

The property tax will only be on newly acquired property.   The only property of interest will be property acquired as salary, capital gains, etc.

Because, as we all know, "dollars" are property too.

Said "dollar property" will be calculated in the exact same way the old income tax was calculated.  :)

Don't know whether it would get thru the GOP-controlled state assembly.

If it did, we would all save a bunch in taxes and it would be a big FU to the national GOP by the state GOP.

If it didn't, we would all pay a bunch in taxes and it would be the state and national GOP's fault, but not the state and national Democrat's fault.

It's worth a try.

Thatís cute but Iím sure it says ďreal property.Ē  Remember, this isnít a new deduction, itís existed Forbes a longer time and has a bunch of guidance and rulings on it.  They are just removing the other deductions

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #577 on: November 20, 2017, 01:05:27 AM »
Not a tax cut for many of us.

If your estate is more than $11,000,000 when you die, then your kids get a 100% tax cut on their inheritance!

That's how we're going to MAGA.  Nevermind crumbling infrastructure, skyrocketing deficits, and eroding freedoms.  Billionaire inheritors like Donald Trump will get those tax breaks they so desperately need.

Okay, here's the ironic part about that.  Those kids will do one of two things with that money.  They will spend it (which will generate economic activity, which generates fed revenue), or they will invest it (which will theoretically be good for capitalism).  If the former, the money quickly winds up with others.  If the later, the rich kids still have it (likely even more through growth); which means our congress a generation from now can tax them for even higher revenues.  Nothing lasts forever.  The wealthy can hoard to their heart's content, but today's "permanent changes" offer little assurance that the gov won't take it at some point later.
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teen persuasion

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Re: Republican Tax Plan 2017
« Reply #578 on: November 20, 2017, 06:19:29 AM »
I did not see this.  Thanks for pointing out that it's changing.  Not sure what the new phase out rate would be but helpful to know it's higher.

This calculator was helpful in understanding the differences between the house and senate plans for us. 

https://www.marketwatch.com/story/the-new-trump-tax-calculator-what-do-you-owe-2017-10-26
Thanks for the link.
Unfortunately, it's really rudimentary and not accurate.  It asked how many child dependents we have - 2, one under 17, one over.  It treated both as under 17 and eligible for CTC.  It then said we are not eligible for refundable credits.  So $0 tax owed, but no refund!  Totally ignored EITC. No mention of AOTC.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #579 on: November 20, 2017, 07:17:18 AM »
I wonder what the sentiment will be when most people find that their first paycheck in the new year is a little fatter.

The real question is if people will have long enough attention spans to recognize their taxes increasing on the back end of this deal and when their tax cuts expire but the corporations don't.
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Wexler

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Re: Republican Tax Plan 2017
« Reply #580 on: November 20, 2017, 08:42:12 AM »
I'm okay paying more taxes if I felt it was going towards helping the unfortunate, the sick, etc. 

I would even be okay with paying more taxes if it DIDN'T help the poor and unfortunate, if it was at least going to reduce the deficit.  Instead, this bill makes the deficit even worse.  Trillions of dollars worse, once you account for the interest on the new debt it will create.

That's really the primary motivation of the GOP tax platform.  It basically only does one thing: it permanently cuts the corporate tax rate from 35 to 20%, and it drives the country into debt to do it.  Everything else is a sideshow.  The individual bracket changes, the loopholes and deductions, the individual mandate repeal, they're basically all trivial details when compared to the multitrillion dollar impact of going into debt to pay for corporate tax cuts. 

Whether or not you or I pay a little more or a little less almost doesn't matter, in that context.  This bill isn't about US citizens, it's about US corporations and how much debt they can offload to US taxpayers in their pursuit of higher profits.

This is interesting:
https://www.washingtonpost.com/news/posteverything/wp/2017/09/28/i-helped-create-the-gop-tax-myth-trump-is-wrong-tax-cuts-dont-equal-growth/?utm_term=.25867e4bb25e

According to the engineer of Reagan's tax plan, they saw that tax cuts led to wage cuts, not the reverse.  Putting more money in corporate pockets doesn't even lead to trickle down.

There's plenty of data out there about various Republican tax cutting schemes and how they affect the economy.  Not only in Oklahoma and Kansas (seriously-why would you keep voting for Republicans when your state can't even afford a 5 day school week because of lost revenues?  Have some dignity, people), but also after the W tax cuts.  The W tax cuts led to several years of decreased federal revenues.  The Obama stock market boom?  The Clinton boom?  All in the context of increased taxes.  We don't have to armchair it-there's evidence to examine.


Livewell

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Re: Republican Tax Plan 2017
« Reply #581 on: November 20, 2017, 09:16:03 AM »
A thought Iíve taken action on if you live in a high tax state (CA, NY, NJ), and know what your upcoming spring 2018 property tax will be:  pay it in 2017.

If this plan goes through, and SALT deduction goes away, weíll no longer be able to itemize.  Even though we would be able to take advantage of the property tax deduction in one of the plans, it wonít matter because we wonít be itemizing.

However that is not the case this year!

Worse case we paid four months early, go back to the regular schedule next year and for us, get a nice return on that early payment.

Scortius

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Re: Republican Tax Plan 2017
« Reply #582 on: November 20, 2017, 09:49:09 AM »
Not a tax cut for many of us.

If your estate is more than $11,000,000 when you die, then your kids get a 100% tax cut on their inheritance!

That's how we're going to MAGA.  Nevermind crumbling infrastructure, skyrocketing deficits, and eroding freedoms.  Billionaire inheritors like Donald Trump will get those tax breaks they so desperately need.

Okay, here's the ironic part about that.  Those kids will do one of two things with that money.  They will spend it (which will generate economic activity, which generates fed revenue), or they will invest it (which will theoretically be good for capitalism).  If the former, the money quickly winds up with others.  If the later, the rich kids still have it (likely even more through growth); which means our congress a generation from now can tax them for even higher revenues.  Nothing lasts forever.  The wealthy can hoard to their heart's content, but today's "permanent changes" offer little assurance that the gov won't take it at some point later.

Do you know what the rich kids would do with the money if any amount beyond $11 million were taxed? They would either spend it, or they would invest it. But, instead that extra amount that was taxed could be applied by the government to pay for crucial services to the general public, like medicaid or eduction, or it could be used to lower the deficit, or it could instead be used to maintain tax breaks for the lower and middle class to give those people more money in their pockets, that they would either 1) spend, or 2) invest (but probably spend because they're the ones living paycheck to paycheck).

Kevin

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Re: Republican Tax Plan 2017
« Reply #583 on: November 20, 2017, 10:30:36 AM »
Did the language about changing the capital gains exemption on home sales from 2 years to 5 stay in the bill? I am in year 1 of a live in flip and not sure I want to stay here for 5 years

It's still there. I am in the same position, except we are 2 years into our flip. This bill could not have been written to fuck us over more. We stand to personally lose $8k all so we can give corporations a tax break and repeal the estate tax for those inheriting multi-million dollar sums of money.

https://forum.mrmoneymustache.com/welcome-to-the-forum/republican-tax-plan-2017/msg1775000/#msg1775000

boarder42

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Re: Republican Tax Plan 2017
« Reply #584 on: November 20, 2017, 10:34:17 AM »
A thought Iíve taken action on if you live in a high tax state (CA, NY, NJ), and know what your upcoming spring 2018 property tax will be:  pay it in 2017.

If this plan goes through, and SALT deduction goes away, weíll no longer be able to itemize.  Even though we would be able to take advantage of the property tax deduction in one of the plans, it wonít matter because we wonít be itemizing.

However that is not the case this year!

Worse case we paid four months early, go back to the regular schedule next year and for us, get a nice return on that early payment.

even if its not a high tax state this makes sense to do if you itemize.  i'll itemize this year and an instant 25%+6% ROI is nothing to frown at for me to prepay 6k in taxes.

now is there any way to prepay 2018 state income taxes.  does anyone know?
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SaucyAussie

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Re: Republican Tax Plan 2017
« Reply #585 on: November 20, 2017, 10:52:30 AM »
Some tweaks to the Senate plan later in the week definitely helped out the middle to upper middle. Tax rates were reduced (my marginal rate would go from 25 to 24) plus the brackets were expanded (for me, marginal rate kicks in at 70K instead of 60K). The child credit was increased to $2000 per child which should make up for losing the exemption. The current law prices me out of the child credit so that alone is a big win for me.

But yeah, the really big winners here are still the super rich...

teen persuasion

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Re: Republican Tax Plan 2017
« Reply #586 on: November 20, 2017, 11:34:07 AM »
A thought Iíve taken action on if you live in a high tax state (CA, NY, NJ), and know what your upcoming spring 2018 property tax will be:  pay it in 2017.

If this plan goes through, and SALT deduction goes away, weíll no longer be able to itemize.  Even though we would be able to take advantage of the property tax deduction in one of the plans, it wonít matter because we wonít be itemizing.

However that is not the case this year!

Worse case we paid four months early, go back to the regular schedule next year and for us, get a nice return on that early payment.
WNYer here - property tax bills don't come out before Jan 1, no way to pre-pay.  Same for school tax bills out after Sept 1, due by Oct 1.  No way to shift to another year, without paying seriously late and the fines would wipe out any advantage.

RangerOne

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Re: Republican Tax Plan 2017
« Reply #587 on: November 20, 2017, 12:02:45 PM »
Okay I reran some numbers with the current senate tax brackets and it looks like I really underestimated the adjustment due to the bracket tax cuts and child tax credit.

It looks like at least for my starter home/condo, the senate bill would net me about the same $3k positive cash back in my pocket per year that ownership would. The delta roughly appears to be $100-$500........

I suspect people earning even a bit more than me would start to see that gap widen due to drifting well into the 25%/22% bracket but at least for me it looks like I was being unfair to the size of the other adjustments they are making.

I would be force to take the standard, but I am not against renters getting the same break I would get with the home.

If I max out my 401k the new plan actually saves me money even taking into account. California would also like dial back its income tax a bit which could close the gap.


Michael in ABQ

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Re: Republican Tax Plan 2017
« Reply #588 on: November 20, 2017, 12:16:06 PM »
With 5 kids I can make up to about $90k under the house plan and $105k under the senate plan and have zero income tax burden. Sounds like a pretty good deal for me. Of course under the current system the exemptions and child tax credits basically wipe out my income taxes anyways but I used to get some back from the refundable child tax credits when my income was lower
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DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #589 on: November 20, 2017, 12:25:04 PM »
I wonder what the sentiment will be when most people find that their first paycheck in the new year is a little fatter.

The real question is if people will have long enough attention spans to recognize their taxes increasing on the back end of this deal and when their tax cuts expire but the corporations don't.
That's a rhetorical question right?

Yes.  Virtually everyone sees a slightly lower number for '17/'18 comparisons and thinks "YAY! What's wrong with this plan?"  Very few are talking about how bad this plan is over the next decade+ for almost all people except the top 0.1%.
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RangerOne

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Re: Republican Tax Plan 2017
« Reply #590 on: November 20, 2017, 01:56:06 PM »
If you are talking about the tax rates expiring this isn't a problem. The problem is the fiscal irresponsibility of an unfunded tax cut, and the eventual need to cut programs. The assumption that no sane Congress would allow middle class tax breaks to expire is sound at least historically.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #591 on: November 20, 2017, 02:32:57 PM »
If you are talking about the tax rates expiring this isn't a problem. The problem is the fiscal irresponsibility of an unfunded tax cut, and the eventual need to cut programs. The assumption that no sane Congress would allow middle class tax breaks to expire is sound at least historically.

The GOP sure had their panties in a bunch under Obama about deficits.  Now they're in charge and they're excited about adding $1.5 trillion to the debt.

But yes, it's all about paving the way of cutting programs like Medicare and Medicaid

Sherrod Brown was calling out the Senate on their BS and Orrin Hatch was feigning taking offense, saying no real proposals brought by Democrats, etc. etc.  So Brown says, "OK, let's start with CHIP."  And Hatch is like, "No, we're not starting with CHIP."  LOL wtf dude?
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Just Joe

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Re: Republican Tax Plan 2017
« Reply #592 on: November 20, 2017, 02:54:52 PM »
So what does the GOP expect America to look like when the poor have little or no safety nets?

ixtap

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Re: Republican Tax Plan 2017
« Reply #593 on: November 20, 2017, 06:02:41 PM »
So what does the GOP expect America to look like when the poor have little or no safety nets?

All those poor people will suddenly have an incentive to be productive members of society. They will go out and get jobs with sustainable incomes.

Barring that, they will suffer the wrath that God rains down on the lazy.

Everyone knows that welfare is what traps people in poverty.

sol

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Re: Republican Tax Plan 2017
« Reply #594 on: November 20, 2017, 06:13:08 PM »
So what does the GOP expect America to look like when the poor have little or no safety nets?

All those poor people will suddenly have an incentive to be productive members of society. They will go out and get jobs with sustainable incomes.

Barring that, they will suffer the wrath that God rains down on the lazy.

Everyone knows that welfare is what traps people in poverty.

Can't... tell... if sarcasm... or not.

ixtap

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Re: Republican Tax Plan 2017
« Reply #595 on: November 20, 2017, 06:16:48 PM »
So what does the GOP expect America to look like when the poor have little or no safety nets?

All those poor people will suddenly have an incentive to be productive members of society. They will go out and get jobs with sustainable incomes.

Barring that, they will suffer the wrath that God rains down on the lazy.

Everyone knows that welfare is what traps people in poverty.

Can't... tell... if sarcasm... or not.

Pretty much word for word what I have been told. The satire writes itself.

Glenstache

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Re: Republican Tax Plan 2017
« Reply #596 on: November 20, 2017, 06:38:49 PM »
So what does the GOP expect America to look like when the poor have little or no safety nets?
I think the short answer is that they simply don't care.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #597 on: November 20, 2017, 08:34:00 PM »
One of the commentators I heard recently said something that I think is a very accurate description of the bill.  He said the only goal is to get the corporate rate down to 20%, the rest is just window dressing.  BTW, does anyone know if either of the bills closes even one corporate tax loophole??



sol

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Re: Republican Tax Plan 2017
« Reply #598 on: November 20, 2017, 10:50:33 PM »
One of the commentators I heard recently said something that I think is a very accurate description of the bill.  He said the only goal is to get the corporate rate down to 20%, the rest is just window dressing.

Was that commentator me, in this very thread?  When I said...

Quote from: me
That's really the primary motivation of the GOP tax platform.  It basically only does one thing: it permanently cuts the corporate tax rate from 35 to 20%, and it drives the country into debt to do it.  Everything else is a sideshow.  The individual bracket changes, the loopholes and deductions, the individual mandate repeal, they're basically all trivial details when compared to the multitrillion dollar impact of going into debt to pay for corporate tax cuts. 

Whether or not you or I pay a little more or a little less almost doesn't matter, in that context.  This bill isn't about US citizens, it's about US corporations and how much debt they can offload to US taxpayers in their pursuit of higher profits.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #599 on: November 21, 2017, 04:25:23 AM »
One of the commentators I heard recently said something that I think is a very accurate description of the bill.  He said the only goal is to get the corporate rate down to 20%, the rest is just window dressing.

Was that commentator me, in this very thread?  When I said...

Quote from: me
That's really the primary motivation of the GOP tax platform.  It basically only does one thing: it permanently cuts the corporate tax rate from 35 to 20%, and it drives the country into debt to do it.  Everything else is a sideshow.  The individual bracket changes, the loopholes and deductions, the individual mandate repeal, they're basically all trivial details when compared to the multitrillion dollar impact of going into debt to pay for corporate tax cuts. 

Whether or not you or I pay a little more or a little less almost doesn't matter, in that context.  This bill isn't about US citizens, it's about US corporations and how much debt they can offload to US taxpayers in their pursuit of higher profits.
Haha, it was someone else but stating your exact sentiment. 

So what about those corporate loopholes?  Have any been closed?