Author Topic: Republican Tax Plan 2017  (Read 72121 times)

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #650 on: November 22, 2017, 04:02:12 PM »
Has anyone actually digested the proposed Senate bill?  The full text got published on Tuesday but there definitely wasn't as much written about it as it was about the House version.  Has anyone seen any good summaries?



FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #651 on: November 22, 2017, 05:12:51 PM »
Has anyone actually digested the proposed Senate bill?  The full text got published on Tuesday but there definitely wasn't as much written about it as it was about the House version.  Has anyone seen any good summaries?

Don't waste your time with the summaries.  If you really want to understand the bill, get the full text and read the sections that apply to your situation.
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 #652 on: November 22, 2017, 05:28:39 PM »
I'd just wish folks would remember a fundamental rule of tax policy: corporations don't pay taxes, people pay taxes. 

A corporate rate cut will benefit individuals in one of three ways:

1. Increased returns to shareholders
2. Increased wages for workers
3. Reduced prices for consumers.

The incidence of corporate taxes is a matter of dispute in the economic literature.  My own personal thought is that the incidence is going to fall on different groups of people differently depending on the industry.

I think it is naive to expect 2 or 3. The opposite might be true when taxes go up, but why would the give up the increased profits of taxes going down?

It's mostly #1, and those shareholder earnings will also be taxed at a lower rate (qualified dividends and capital gains).  This will lower tax revenues.  It will only boost the economy if there are people out there who see a bigger dividend and go out and spend it.  Fat chance.

protostache

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Re: Republican Tax Plan 2017
« Reply #653 on: November 22, 2017, 08:28:17 PM »
I'd just wish folks would remember a fundamental rule of tax policy: corporations don't pay taxes, people pay taxes. 

A corporate rate cut will benefit individuals in one of three ways:

1. Increased returns to shareholders
2. Increased wages for workers
3. Reduced prices for consumers.

The incidence of corporate taxes is a matter of dispute in the economic literature.  My own personal thought is that the incidence is going to fall on different groups of people differently depending on the industry.

I think it is naive to expect 2 or 3. The opposite might be true when taxes go up, but why would the give up the increased profits of taxes going down?

It's mostly #1, and those shareholder earnings will also be taxed at a lower rate (qualified dividends and capital gains).  This will lower tax revenues.  It will only boost the economy if there are people out there who see a bigger dividend and go out and spend it.  Fat chance.

Don't forget #4: stock buybacks at absurdly high valuations that help executives meet their quarterly PE targets so they can get their bonus options.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #654 on: November 22, 2017, 08:45:13 PM »
Has anyone actually digested the proposed Senate bill?  The full text got published on Tuesday but there definitely wasn't as much written about it as it was about the House version.  Has anyone seen any good summaries?

Don't waste your time with the summaries.  If you really want to understand the bill, get the full text and read the sections that apply to your situation.
Haha, have you tried it?  That was the first thing I did, but the thing is something like 600 pages long and doesn’t even have a table of contents...  I got through several pages and gave up.  A summary would be useful to see which sections I should be reading.  That’s what I did with the house bill.



FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #655 on: November 22, 2017, 09:28:14 PM »
Has anyone actually digested the proposed Senate bill?  The full text got published on Tuesday but there definitely wasn't as much written about it as it was about the House version.  Has anyone seen any good summaries?

Don't waste your time with the summaries.  If you really want to understand the bill, get the full text and read the sections that apply to your situation.
Haha, have you tried it?  That was the first thing I did, but the thing is something like 600 pages long and doesn’t even have a table of contents...  I got through several pages and gave up.  A summary would be useful to see which sections I should be reading.  That’s what I did with the house bill.

Yes, I did "try it."  I did it for both House and Senate bills.  The Senate bill has 253 pages and a thorough table of contents.  The major amendment is 103 pages.  I've read both house and senate bills for impacts on individual income taxes.  Not sure what you're doing wrong?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #656 on: November 23, 2017, 04:29:44 AM »
Has anyone actually digested the proposed Senate bill?  The full text got published on Tuesday but there definitely wasn't as much written about it as it was about the House version.  Has anyone seen any good summaries?

Don't waste your time with the summaries.  If you really want to understand the bill, get the full text and read the sections that apply to your situation.
Haha, have you tried it?  That was the first thing I did, but the thing is something like 600 pages long and doesn’t even have a table of contents...  I got through several pages and gave up.  A summary would be useful to see which sections I should be reading.  That’s what I did with the house bill.

Yes, I did "try it."  I did it for both House and Senate bills.  The Senate bill has 253 pages and a thorough table of contents.  The major amendment is 103 pages.  I've read both house and senate bills for impacts on individual income taxes.  Not sure what you're doing wrong?

Do you mind posting a link?  The full text I attempted to read was a link from Bloomberg.  It has 515 pages and no table of contents https://www.finance.senate.gov/imo/media/doc/11.20.17%20Tax%20Cuts%20and%20Jobs%20Act.pdf



sokoloff

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Re: Republican Tax Plan 2017
« Reply #657 on: November 23, 2017, 06:02:00 AM »
Education spending tends to favor well-off Americans. This is why Obama tried (unsuccessfully) to eliminate the tax loophole that allows wealthy families to save for their children's college education.
I believe that education is one of the fastest and surest routes for people to lift themselves and their progeny out of the lower strata of economic (and social) class and into the upper-middle.

Education alone won't get you beyond that, but there are countless examples, including my own, of lower class to upper middle class in two generations driven in large part by prioritizing education. The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.

pecunia

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Re: Republican Tax Plan 2017
« Reply #658 on: November 23, 2017, 08:50:23 AM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.

How about just plain dirt poor?  Shouldn't they have the opportunity too?  Seems like there are less opportunities than there were a generation ago when I went to school.  Carter gave us the BEOG (Basic Education Opportunity Grant), CETA for college students (Comprehensive Education and Training Act), there were low interest loans (NDSL) and state scholarships.

Well - Mr Reagan and company took the first two away.  I don't know what happened to the National Direct Student Loans.  State scholarships have dried up somewhat.  Mr. Clinton and company gave us these marvelous trade deals that sent many good jobs abroad (jobs were also lost by increased automation).  So less tax revenue was there to pay for state scholarships.

It also used to be a fact that you could get an industrial job over the Summer and defray much of your school costs.  Now you can get a minimum wage job and defray about zero costs.  Or take a loan out and be a slave to a bank for many years.

I didn't read through the multiplicity of posts that preceded my Thanksgiving typing, but I'll bet you the right wing boys in power haven't done jack to help poor folk go to higher ed.  However, I have read elsewhere that these potential tax bills are going to raise the average Joe's taxes.  Can somebody who has read the 250 to 600 pages confirm this?

Am I just getting old or is the country actually going backward?

sokoloff

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Re: Republican Tax Plan 2017
« Reply #659 on: November 23, 2017, 10:46:38 AM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

doggyfizzle

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Re: Republican Tax Plan 2017
« Reply #660 on: November 23, 2017, 11:00:43 AM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

pecunia

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Re: Republican Tax Plan 2017
« Reply #661 on: November 23, 2017, 02:59:53 PM »
Yes - good response.  I would like your opinion on the other point I brought up.  The country seems to be going backwards.  I do not recall that enormous debt was incurred a generation ago.  I had an NDSL loan with an interest rate of 1.5 or 3 percent.  I've been told there is certainly no low interest loans for the students of today.

Is it harder to go to school today?  Shouldn't student support be an obvious investment to by made by the country?  Shouldn't the short term profit motive be waived for the good of us all?  Are our current politicians doing anything to help with this long term investment in our future?

sokoloff

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Re: Republican Tax Plan 2017
« Reply #662 on: November 23, 2017, 04:12:55 PM »
(I'm declining to respond to your other point out of substantial and acknowledged ignorance.)

I do know that tuition growth has been wildly greater than general inflation for a couple decades now. That's been driven in large part by plentiful cheap money and strong loan guarantees for school loans. I can't say that I object to loans being available nor to loans being non-dischargeable in bankruptcy. But those two facts combine to let private college costs grow wildly out of connection to general inflation (because the willingness to pay grows faster than inflation). I just don't have a good answer, nor a lot of expertise in the area.

I funded my college largely with ROTC scholarship, gluing together some other small merit-based private scholarships, working summers and a side job during school, and taking a few loans. That was 26-29 years ago. I don't expect for my kids to get any need-based aid, so I haven't kept close tabs on the current status of it.

bdylan

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Re: Republican Tax Plan 2017
« Reply #663 on: November 24, 2017, 08:44:32 AM »
I'd just wish folks would remember a fundamental rule of tax policy: corporations don't pay taxes, people pay taxes. 

A corporate rate cut will benefit individuals in one of three ways:

1. Increased returns to shareholders
2. Increased wages for workers
3. Reduced prices for consumers.

The incidence of corporate taxes is a matter of dispute in the economic literature.  My own personal thought is that the incidence is going to fall on different groups of people differently depending on the industry.

I think it is naive to expect 2 or 3. The opposite might be true when taxes go up, but why would the give up the increased profits of taxes going down?

Well, say you're in a highly competitive industry (say fast food).  McDonalds can now go back to the dollar menu and maintain the exact same profit margins, plus, steal business away from Burger King and Wendy's.  How do you think Burger King and Wendy's will react?

Probably by taking tax savings, investing in automation, firing all the workers ,and serve their crappy product to those lucky few who still have jobs...

The point is, as Scortius points out, this will not increase wages as the Republicans like to pretend.  Did you not see all the CEOs at the round table say they would not invest in their workers?

This isn't a 'point' this is an empirical question.  CBO has an interesting report going through the literature which finds that "the majority of studies find that labor bears a substantial burden" of the corporate income tax.  Of course, they mention the huge uncertainties surrounding this question as well.

If there is a 'point' to be made, its that a corporate rate cut is almost an unalloyed good for mustachian types.  You either have higher returns to capital (which mustachians own), you have lower prices for goods, or you have higher wages.

(https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/122xx/doc12239/06-14-2011-corporatetaxincidence.pdf)

sol

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Re: Republican Tax Plan 2017
« Reply #664 on: November 24, 2017, 08:59:16 AM »
If there is a 'point' to be made, its that a corporate rate cut is almost an unalloyed good for mustachian types.  You either have higher returns to capital (which mustachians own), you have lower prices for goods, or you have higher wages.

The Republican tax plan is designed to add trillions to the deficit, triggering automatic cuts to medicaid and medicare.  How is that good for mustachians, again?

Milizard

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Re: Republican Tax Plan 2017
« Reply #665 on: November 24, 2017, 12:32:19 PM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

I took a class at the local CC a year or 2 ago.  About $1000 between tuition, fees and book for just the one class. I don't consider that next to nothing.

Peter Parker

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Re: Republican Tax Plan 2017
« Reply #666 on: November 24, 2017, 12:43:37 PM »
I'd just wish folks would remember a fundamental rule of tax policy: corporations don't pay taxes, people pay taxes. 

A corporate rate cut will benefit individuals in one of three ways:

1. Increased returns to shareholders
2. Increased wages for workers
3. Reduced prices for consumers.

The incidence of corporate taxes is a matter of dispute in the economic literature.  My own personal thought is that the incidence is going to fall on different groups of people differently depending on the industry.

I think it is naive to expect 2 or 3. The opposite might be true when taxes go up, but why would the give up the increased profits of taxes going down?

Well, say you're in a highly competitive industry (say fast food).  McDonalds can now go back to the dollar menu and maintain the exact same profit margins, plus, steal business away from Burger King and Wendy's.  How do you think Burger King and Wendy's will react?

Probably by taking tax savings, investing in automation, firing all the workers ,and serve their crappy product to those lucky few who still have jobs...

The point is, as Scortius points out, this will not increase wages as the Republicans like to pretend.  Did you not see all the CEOs at the round table say they would not invest in their workers?

This isn't a 'point' this is an empirical question.  CBO has an interesting report going through the literature which finds that "the majority of studies find that labor bears a substantial burden" of the corporate income tax.  Of course, they mention the huge uncertainties surrounding this question as well.

If there is a 'point' to be made, its that a corporate rate cut is almost an unalloyed good for mustachian types.  You either have higher returns to capital (which mustachians own), you have lower prices for goods, or you have higher wages.

(https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/122xx/doc12239/06-14-2011-corporatetaxincidence.pdf)

Here's what I know....

1.  My Wages will NOT increase with this tax plan.

2.  My Taxes WILL go UP with this tax plan (No SALT deduction, I get hit with reduced mortgage deduction, and MOST IMPORTANTLY, I will not be able to take advantage of multiple deferred comp contributions)

3.  I doubt very seriously, my expenses will be reduced...

All of this to to give corporations a permanent tax break, and to allow Billionaires to pass on tax-free inheritances to their children....

sol

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Re: Republican Tax Plan 2017
« Reply #667 on: November 24, 2017, 02:10:28 PM »
All of this to to give corporations a permanent tax break, and to allow Billionaires to pass on tax-free inheritances to their children....

This has always been the Republican approach taxes.  It is essentially just another form of wealth redistribution, from the middle class to the very rich.  Democrats have also favored redistribution, but usually in the other direction. 

Which is why I find it so galling that they've pitched this plan as a tax "cut" when it instead raises taxes on most people. 

Peter Parker

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Re: Republican Tax Plan 2017
« Reply #668 on: November 24, 2017, 02:39:52 PM »
All of this to to give corporations a permanent tax break, and to allow Billionaires to pass on tax-free inheritances to their children....

This has always been the Republican approach taxes.  It is essentially just another form of wealth redistribution, from the middle class to the very rich.  Democrats have also favored redistribution, but usually in the other direction. 

Which is why I find it so galling that they've pitched this plan as a tax "cut" when it instead raises taxes on most people.

i've been following your responses Sol, and you have been so right on the money...

doggyfizzle

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Re: Republican Tax Plan 2017
« Reply #669 on: November 24, 2017, 04:46:17 PM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

I took a class at the local CC a year or 2 ago.  About $1000 between tuition, fees and book for just the one class. I don't consider that next to nothing.

I guess I should have qualified that as "California Community College" fees; at roughly $46/unit, a student can take 12 units per semester for $600, which in an extremely inexpensive AA/AS degree for roughly $3k.  That still seems pretty reasonable to me, especially compared to the CSU/UC cost for the same lower division coursework per year ($10-$15k).  Throw in a couple vo-tec classes while you're at it, and you can end up with a decent skill set and make above minimum wage while then attending college/university and graduate with little to no debt burden.  It stands to reason that someone who is "dirt poor" with an appetite for education has a pretty decent opportunity to get an education (at least in CA).

pecunia

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Re: Republican Tax Plan 2017
« Reply #670 on: November 25, 2017, 12:40:27 PM »
 
Quote
It stands to reason that someone who is "dirt poor" with an appetite for education has a pretty decent opportunity to get an education (at least in CA).

When I was a kid I remember my older brother telling me the he wished we lived in California as one could go to school for next to nothing.  Looks like this is a benefit that they haven't totally eliminated.  I guess they missed it.

Heck - I even took a class in Contra Costa when I lived there.  I guess with all that brain power in Silicon Valley, it's not too hard to find someone willing to teach a class and make a few bucks.


RangerOne

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Re: Republican Tax Plan 2017
« Reply #671 on: November 25, 2017, 01:02:28 PM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

I took a class at the local CC a year or 2 ago.  About $1000 between tuition, fees and book for just the one class. I don't consider that next to nothing.

I guess I should have qualified that as "California Community College" fees; at roughly $46/unit, a student can take 12 units per semester for $600, which in an extremely inexpensive AA/AS degree for roughly $3k.  That still seems pretty reasonable to me, especially compared to the CSU/UC cost for the same lower division coursework per year ($10-$15k).  Throw in a couple vo-tec classes while you're at it, and you can end up with a decent skill set and make above minimum wage while then attending college/university and graduate with little to no debt burden.  It stands to reason that someone who is "dirt poor" with an appetite for education has a pretty decent opportunity to get an education (at least in CA).

Without help community college is to expensive. A lower income person geenrally can't afford to buy something even in the $500 range above and beyond their basic cost of living.

I'm not sure if CC offer breaks for low income students now but CC in general can be an excellent stepping stone to a 4 year degree. I had a number of friends and my brother do 2 years at the community college to get guranteed entry into UCSD, where they only had to deal with 2 years at the higher cost. And most came in and did better than me and my friends who did all 4 years there. Work ethic matters.

The ballooning cost of the UC system and many other public schools is definitely in part the fault of the upper middle class thinking it's a good idea to take out any size loan to get any and every degree....

doggyfizzle

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Re: Republican Tax Plan 2017
« Reply #672 on: November 25, 2017, 01:53:27 PM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

I took a class at the local CC a year or 2 ago.  About $1000 between tuition, fees and book for just the one class. I don't consider that next to nothing.

I guess I should have qualified that as "California Community College" fees; at roughly $46/unit, a student can take 12 units per semester for $600, which in an extremely inexpensive AA/AS degree for roughly $3k.  That still seems pretty reasonable to me, especially compared to the CSU/UC cost for the same lower division coursework per year ($10-$15k).  Throw in a couple vo-tec classes while you're at it, and you can end up with a decent skill set and make above minimum wage while then attending college/university and graduate with little to no debt burden.  It stands to reason that someone who is "dirt poor" with an appetite for education has a pretty decent opportunity to get an education (at least in CA).

Without help community college is to expensive. A lower income person geenrally can't afford to buy something even in the $500 range above and beyond their basic cost of living.

I'm not sure if CC offer breaks for low income students now but CC in general can be an excellent stepping stone to a 4 year degree. I had a number of friends and my brother do 2 years at the community college to get guranteed entry into UCSD, where they only had to deal with 2 years at the higher cost. And most came in and did better than me and my friends who did all 4 years there. Work ethic matters.

The ballooning cost of the UC system and many other public schools is definitely in part the fault of the upper middle class thinking it's a good idea to take out any size loan to get any and every degree....
California CCs do offer tuition assistance; if you take CC classes while in high school (as I did), tuition is waived entirely and you don’t have to worry about taking the silly AP tests to get college credit.  Based on CCC stats, CC tuition is about 1/3 the average rate nationwide, and only about 2% of students need to take out loans for tuition at CCCs.

The rise in cost of tuition at the UC system is more tied to the dramatic drop-off in state funding for the UC system rather than easy access to student loans.  Tuition increased dramatically in the years following the 2007 recession, mostly because of cratering housing prices resulting in lower property tax assessments and less money for California State to put towards the UC and CSU systems.  In fact, state contributions dropped from about $6 billion to $4 billion between 2007-2103.  The difference has to be made up somewhere, which unfortunately meant higher costs shouldered by students.

The CSUs, while note all “Tier 1” schools (not that that really matters for an undergrad degree anyways), still are reasonably affordable for 4 year schools compared to the nationwide average for public 4-year colleges, while the UCs tend to be more expensive.

RangerOne

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Re: Republican Tax Plan 2017
« Reply #673 on: November 27, 2017, 06:08:16 AM »
Yeah state funding loss could be the larger factor there. But much like any other major expenditure schools can only charge a fortune if working people can get loans generally.

Maybe UC is not a great example since it's initial lower cost was tied to state funds. But I would bet statistics bear out that many people at both public and private institutions pay for their education with loans.

If that number is high enough, then dialing back the amount people could borrow would force some institutions to lower prices since students with the ability to pay more would dry up.

Of course if a school isn't over priced and they need that money. Such a move would be a disaster....

Metta

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Re: Republican Tax Plan 2017
« Reply #674 on: November 27, 2017, 06:55:30 AM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

I took a class at the local CC a year or 2 ago.  About $1000 between tuition, fees and book for just the one class. I don't consider that next to nothing.

I guess I should have qualified that as "California Community College" fees; at roughly $46/unit, a student can take 12 units per semester for $600, which in an extremely inexpensive AA/AS degree for roughly $3k.  That still seems pretty reasonable to me, especially compared to the CSU/UC cost for the same lower division coursework per year ($10-$15k).  Throw in a couple vo-tec classes while you're at it, and you can end up with a decent skill set and make above minimum wage while then attending college/university and graduate with little to no debt burden.  It stands to reason that someone who is "dirt poor" with an appetite for education has a pretty decent opportunity to get an education (at least in CA).

That seems unusually low. Here in Memphis a VLCOL city, community college costs $160 per credit hour plus various fees. For a 12 credit hour semester it is $2,077.50. For out of state students it costs about 4 times as much. By comparison, one 12 credit hour semester at the state college equivalent here, University of Memphis would cost about $4700 (depending on individual course fees it could be more).

mizzourah2006

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Re: Republican Tax Plan 2017
« Reply #675 on: November 27, 2017, 08:52:15 AM »
Quote
The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.
How about just plain dirt poor?  Shouldn't they have the opportunity too?
Of course they should have the opportunity as well.

I didn't include the dirt-poor in my list only because when discussing tax advantages for saving substantial sums in 529 accounts, it obviously doesn't make sense to talk about them.

Most of the top schools are need-blind anyway, so the very poor are already covered there (at least for tuition financing/grants).

The middle class gets pinched on the "how do I afford college?" deal, especially when multiple kids are college-bound. The very rich cover themselves; the very poor are comped by the schools; the middle often have an expected family contribution well in excess of what the middle class can cover.

sokoloff, your post two posts above is great.  And one more thing to add about education, the “dirt poor” can start off at a local JC (just like my two “dirt poor” parents did) and get most lower division coursework out of the way for nearly nothing in cost, just like any middle class or rich kid.

I took a class at the local CC a year or 2 ago.  About $1000 between tuition, fees and book for just the one class. I don't consider that next to nothing.

I guess I should have qualified that as "California Community College" fees; at roughly $46/unit, a student can take 12 units per semester for $600, which in an extremely inexpensive AA/AS degree for roughly $3k.  That still seems pretty reasonable to me, especially compared to the CSU/UC cost for the same lower division coursework per year ($10-$15k).  Throw in a couple vo-tec classes while you're at it, and you can end up with a decent skill set and make above minimum wage while then attending college/university and graduate with little to no debt burden.  It stands to reason that someone who is "dirt poor" with an appetite for education has a pretty decent opportunity to get an education (at least in CA).

That seems unusually low. Here in Memphis a VLCOL city, community college costs $160 per credit hour plus various fees. For a 12 credit hour semester it is $2,077.50. For out of state students it costs about 4 times as much. By comparison, one 12 credit hour semester at the state college equivalent here, University of Memphis would cost about $4700 (depending on individual course fees it could be more).

Yeah this seems to vary greatly. The CC where I live charges $75/credit hour. The CC near where I grew up in Saint Louis costs $109.50/credit hour and the CC my wife went to (Valencia Community College) charges $103.06/credit hour.

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #676 on: November 27, 2017, 10:25:21 AM »
https://www.nytimes.com/2017/11/26/us/politics/teacher-tax-deduction-house-senate-tax-cuts.html

As someone who is married to a teacher, I gotta call BS on this article.  In the 25% bracket, the educator expense is worth at most $62.50 ($250*.25).  I will gladly give that up if they are going to double my standard deduction and lower my effective rate.  But hey, any one who picks on teachers MUST be evil.  More liberal garbage for people who can't do simple math.

Psychstache

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Re: Republican Tax Plan 2017
« Reply #677 on: November 27, 2017, 12:02:07 PM »
https://www.nytimes.com/2017/11/26/us/politics/teacher-tax-deduction-house-senate-tax-cuts.html

As someone who is married to a teacher, I gotta call BS on this article.  In the 25% bracket, the educator expense is worth at most $62.50 ($250*.25).  I will gladly give that up if they are going to double my standard deduction and lower my effective rate.  But hey, any one who picks on teachers MUST be evil.  More liberal garbage for people who can't do simple math.

While I agree that in the grand scheme of things that it is not a lot of money, perhaps the bigger issue we should focus on is that we do such a poor job at the federal, state, and local level of funding education as a nation that we wrote in a special federal deduction in the first place.

Disclaimer: also married to a teacher.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #678 on: November 27, 2017, 12:35:17 PM »
When my kids went to community college, the American Opportunity Tax credit offset nearly all the costs.  Are those of you providing CC costs taking this into consideration??
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

A Definite Beta Guy

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Re: Republican Tax Plan 2017
« Reply #679 on: November 27, 2017, 01:58:06 PM »
Education spending tends to favor well-off Americans. This is why Obama tried (unsuccessfully) to eliminate the tax loophole that allows wealthy families to save for their children's college education.
I believe that education is one of the fastest and surest routes for people to lift themselves and their progeny out of the lower strata of economic (and social) class and into the upper-middle.

Education alone won't get you beyond that, but there are countless examples, including my own, of lower class to upper middle class in two generations driven in large part by prioritizing education. The fact that people who are in the upper middle class also use education to maintain that position is not a reason to take away that opportunity from the upper-lower, lower-middle, and middle class, IMO.

There are ways we can spend on education that does not result in additional money going to upper class families. Even if college can help advance lower-class families, the existence of tax loopholes that let wealthy families save for college is money not going to the treasury. For those concerned about inequality, it reinforces that as well.

Even if college can help families advance, it does no one any good if the system on net entrenches an existing class divide. Yale handing out scholarships to the occasional poor kid is like the King of France handing out an estate to the occasional minor Lord: the system as a whole can still be a wealth-extractive entity that serves primarily to enrich the elite, and it makes no sense to NOT tax the system, since the vast majority of the users are the elite. You might even remove the sole avenue of advance for the lower classes, which is ingratiating yourself to the King so you can get land...but who cares? The vast majority of the serfs are not better off because there is one new Lord who used to be a serf. They would be better off having their own land and not feeding money into a system that primarily benefits the elite.

Wexler

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Re: Republican Tax Plan 2017
« Reply #680 on: November 27, 2017, 02:01:15 PM »
https://www.nytimes.com/2017/11/26/us/politics/teacher-tax-deduction-house-senate-tax-cuts.html

As someone who is married to a teacher, I gotta call BS on this article.  In the 25% bracket, the educator expense is worth at most $62.50 ($250*.25).  I will gladly give that up if they are going to double my standard deduction and lower my effective rate.  But hey, any one who picks on teachers MUST be evil.  More liberal garbage for people who can't do simple math.

This math seems pretty good to me:
http://time.com/5032079/gop-tax-plan-graduate-students-waiver/

It's not teachers, just TAs, but it's a stupid way to raise tax revenues.  And I don't think that's liberal garbage.

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #681 on: November 27, 2017, 03:20:44 PM »

This math seems pretty good to me:
http://time.com/5032079/gop-tax-plan-graduate-students-waiver/
It's not teachers, just TAs, but it's a stupid way to raise tax revenues.  And I don't think that's liberal garbage.

Quote from: TIME article
For Hill, the impact of the House GOP tax bill is alarming. He currently takes home about $27,000 a year from his graduate stipend, after taxes. Under the House bill, he estimates that he would would take home about $15,000 a year. Graduate tuition at MIT costs about $50,000, and Hill receives a $30,000 stipend; the GOP plan would require him to pay income taxes on that combined $80,000.




So let's run some numbers.  Gross income of $80,000.  $80,000 minus standard deduction of $24,000 equals $61,000.  This is entirely in the 12% bracket so taxes owed is $7,320. $30,000-$7,320=$22,680 take home.  That is quite a bit more than "half" and just $4,320 less than what he's brining home now.  Also keep in mind that he is getting free tuition from MIT.  Glad to see the liberal thought process of making a bad decision (having a baby while in grad school while barely getting by) then blaming others for your problems when the situation slightly changes, though.  One more thing: if this doofus could look beyond the next year of his life, he could see that the new tax plan will greatly benefit him as a PhD most likely earning six figures.

I would really expect some better critical thinking on this forum, instead of trusting a source like TIME.
« Last Edit: November 27, 2017, 03:42:32 PM by Debts_of_Despair »

OurTown

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Re: Republican Tax Plan 2017
« Reply #682 on: November 27, 2017, 03:36:52 PM »
Good chart.  I think I read somewhere that the individual rate cuts will sunset after 5 years, but the corporate rate cuts are forever.  So, I should just FIRE before the individual rates go back up.  :-)  Also, since my company will be saving a bunch of money in taxes, they can pay me more during my remaining working years, right?  Hope springs eternal.

MDM

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Re: Republican Tax Plan 2017
« Reply #683 on: November 27, 2017, 04:03:14 PM »
Quote from: TIME article
For Hill, the impact of the House GOP tax bill is alarming. He currently takes home about $27,000 a year from his graduate stipend, after taxes. Under the House bill, he estimates that he would would take home about $15,000 a year. Graduate tuition at MIT costs about $50,000, and Hill receives a $30,000 stipend; the GOP plan would require him to pay income taxes on that combined $80,000.
<snip>
So let's run some numbers.  Gross income of $80,000.  $80,000 minus standard deduction of $24,000 equals $61,000.  This is entirely in the 12% bracket so taxes owed is $7,320. $30,000-$7,320=$22,680 take home.  That is quite a bit more than "half" and just $4,320 less than what he's bringing home now.  Also keep in mind that he is getting free tuition from MIT.
Depends somewhat on whether that $30K is considered "earned income".

If so (and assuming none of the $50K scholarship is currently taxable), with the earned income credit and child tax credit the current take home would be slightly above $30K.  Even with no credits (but also no FICA), current total state and federal tax would be ~$1500.

Any comparison with the new tax law should also include changes in the credits, if those would apply.  Haven't kept track of what those might be.

Michael in ABQ

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Re: Republican Tax Plan 2017
« Reply #684 on: November 27, 2017, 04:06:00 PM »

This math seems pretty good to me:
http://time.com/5032079/gop-tax-plan-graduate-students-waiver/
It's not teachers, just TAs, but it's a stupid way to raise tax revenues.  And I don't think that's liberal garbage.

Quote from: TIME article
For Hill, the impact of the House GOP tax bill is alarming. He currently takes home about $27,000 a year from his graduate stipend, after taxes. Under the House bill, he estimates that he would would take home about $15,000 a year. Graduate tuition at MIT costs about $50,000, and Hill receives a $30,000 stipend; the GOP plan would require him to pay income taxes on that combined $80,000.


So let's run some numbers.  Gross income of $80,000.  $80,000 minus standard deduction of $24,000 equals $61,000.  This is entirely in the 12% bracket so taxes owed is $7,320. $30,000-$7,320=$22,680 take home.  That is quite a bit more than "half" and just $4,320 less than what he's brining home now.  Also keep in mind that he is getting free tuition from MIT.  Glad to see the liberal thought process of making a bad decision (having a baby while in grad school while barely getting by) then blaming others for your problems when the situation slightly changes, though.  One more thing: if this doofus could look beyond the next year of his life, he could see that the new tax plan will greatly benefit him as a PhD most likely earning six figures.

I would really expect some better critical thinking on this forum, instead of trusting a source like TIME.

You forgot to include the $2,000 child tax credit which would reduce his taxes from $7,320 to $5,320 resulting in after tax income of $24,680.

Under the current system I doubt he's paying any income taxes as he would qualify for the earned income tax credit. At $30,000 less the standard deduction ($12,700) and three personal exemptions ($12,150) his taxable income is only $5,150 which at 10% is only $515. Going through the IRS's horrible EITC assistant (seriously I think there were about 30 poorly worded questions to get to an estimate) at $30,000 of earned income they would qualify for an EITC of $2,368 for an effective tax of -$1,853 or -6.2%. So when he says he brings home $27,000 after taxes what he forgot to say is "and then I get a $5,000 refund because I didn't claim enough exemptions on my W-4."

I haven't heard anything about changes to the EITC under these new tax plans so this person would still qualify for that assuming the graduate stipend isn't counted as "earned income".
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MDM

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Re: Republican Tax Plan 2017
« Reply #685 on: November 27, 2017, 04:31:01 PM »
You forgot to include the $2,000 child tax credit which would reduce his taxes from $7,320 to $5,320 resulting in after tax income of $24,680.

Under the current system I doubt he's paying any income taxes as he would qualify for the earned income tax credit. At $30,000 less the standard deduction ($12,700) and three personal exemptions ($12,150) his taxable income is only $5,150 which at 10% is only $515. Going through the IRS's horrible EITC assistant (seriously I think there were about 30 poorly worded questions to get to an estimate) at $30,000 of earned income they would qualify for an EITC of $2,368 for an effective tax of -$1,853 or -6.2%. So when he says he brings home $27,000 after taxes what he forgot to say is "and then I get a $5,000 refund because I didn't claim enough exemptions on my W-4."

I haven't heard anything about changes to the EITC under these new tax plans so this person would still qualify for that assuming the graduate stipend isn't counted as "earned income".
Child tax credit is currently $1000/child if fully eligible.

EITC would go away under the new tax plan even if the $50K isn't counted as earned income, if the $50K gets included in AGI but nothing else changes.  Again, I make no claim on understanding what if any changes are contemplated here.

snapperdude

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Re: Republican Tax Plan 2017
« Reply #686 on: November 27, 2017, 05:38:38 PM »
https://www.nytimes.com/2017/11/26/us/politics/teacher-tax-deduction-house-senate-tax-cuts.html

As someone who is married to a teacher, I gotta call BS on this article.  In the 25% bracket, the educator expense is worth at most $62.50 ($250*.25).  I will gladly give that up if they are going to double my standard deduction and lower my effective rate.  But hey, any one who picks on teachers MUST be evil.  More liberal garbage for people who can't do simple math.

Speaking of the inability to do simple math. The current standard deduction for MFJ is 12,700. 24,000 is not doubling 12,700. Add in the elimination of personal exemptions (4,050 x 2) and the raise in the lowest tax rate from 10% to 12% and there is very little change, if any.

JLee

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Re: Republican Tax Plan 2017
« Reply #687 on: November 27, 2017, 05:51:01 PM »

This math seems pretty good to me:
http://time.com/5032079/gop-tax-plan-graduate-students-waiver/
It's not teachers, just TAs, but it's a stupid way to raise tax revenues.  And I don't think that's liberal garbage.

Quote from: TIME article
For Hill, the impact of the House GOP tax bill is alarming. He currently takes home about $27,000 a year from his graduate stipend, after taxes. Under the House bill, he estimates that he would would take home about $15,000 a year. Graduate tuition at MIT costs about $50,000, and Hill receives a $30,000 stipend; the GOP plan would require him to pay income taxes on that combined $80,000.




So let's run some numbers.  Gross income of $80,000.  $80,000 minus standard deduction of $24,000 equals $61,000.  This is entirely in the 12% bracket so taxes owed is $7,320. $30,000-$7,320=$22,680 take home.  That is quite a bit more than "half" and just $4,320 less than what he's brining home now.  Also keep in mind that he is getting free tuition from MIT.  Glad to see the liberal thought process of making a bad decision (having a baby while in grad school while barely getting by) then blaming others for your problems when the situation slightly changes, though.  One more thing: if this doofus could look beyond the next year of his life, he could see that the new tax plan will greatly benefit him as a PhD most likely earning six figures.

I would really expect some better critical thinking on this forum, instead of trusting a source like TIME.

I would have a much easier time paying attention to what people say if they were capable of saying it without spewing insults along with whatever else they said.

It's a huge turn-off, and runs rampant these days.
« Last Edit: November 27, 2017, 05:53:38 PM by JLee »

Wexler

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Re: Republican Tax Plan 2017
« Reply #688 on: November 27, 2017, 07:15:14 PM »

This math seems pretty good to me:
http://time.com/5032079/gop-tax-plan-graduate-students-waiver/
It's not teachers, just TAs, but it's a stupid way to raise tax revenues.  And I don't think that's liberal garbage.

Quote from: TIME article
For Hill, the impact of the House GOP tax bill is alarming. He currently takes home about $27,000 a year from his graduate stipend, after taxes. Under the House bill, he estimates that he would would take home about $15,000 a year. Graduate tuition at MIT costs about $50,000, and Hill receives a $30,000 stipend; the GOP plan would require him to pay income taxes on that combined $80,000.


So let's run some numbers.  Gross income of $80,000.  $80,000 minus standard deduction of $24,000 equals $61,000.  This is entirely in the 12% bracket so taxes owed is $7,320. $30,000-$7,320=$22,680 take home.  That is quite a bit more than "half" and just $4,320 less than what he's brining home now.  Also keep in mind that he is getting free tuition from MIT.  Glad to see the liberal thought process of making a bad decision (having a baby while in grad school while barely getting by) then blaming others for your problems when the situation slightly changes, though.  One more thing: if this doofus could look beyond the next year of his life, he could see that the new tax plan will greatly benefit him as a PhD most likely earning six figures.

I would really expect some better critical thinking on this forum, instead of trusting a source like TIME.

You forgot to include the $2,000 child tax credit which would reduce his taxes from $7,320 to $5,320 resulting in after tax income of $24,680.

Under the current system I doubt he's paying any income taxes as he would qualify for the earned income tax credit. At $30,000 less the standard deduction ($12,700) and three personal exemptions ($12,150) his taxable income is only $5,150 which at 10% is only $515. Going through the IRS's horrible EITC assistant (seriously I think there were about 30 poorly worded questions to get to an estimate) at $30,000 of earned income they would qualify for an EITC of $2,368 for an effective tax of -$1,853 or -6.2%. So when he says he brings home $27,000 after taxes what he forgot to say is "and then I get a $5,000 refund because I didn't claim enough exemptions on my W-4."

I haven't heard anything about changes to the EITC under these new tax plans so this person would still qualify for that assuming the graduate stipend isn't counted as "earned income".

Yeah-this one is kind of an edge case because the guy is married and has a kid.  Under most cases, the grad student gets a 12, 700 deduction and no EITC (because no kid).  I wonder what the math looks like for 2 married grad students with no kids (160k taxable income).

As for the theory that he should lick Orrin Hatch's boots for this tax plan for all the future savings he'll be eligible for, don't those all go away in 2026?  My understanding is that the EITC, the changes to the brackets, AND the doubling of the deduction all go away, BUT there's still the elimination of SALT which will remain as non-deductible after 2026 under the current Senate plan (I could be a version off)  So, this guy will be an economist (or computer scientist, or geneticist or other MMM STEM-approved career track, because I don't muddy the discussion with people's opinions about the humanities), likely living in HCOL city, with a mortgage.  No more doubled deduction.  EITC is phased out.  No SALT.  Do the personal exemptions come back in 2026?  I think this guy likely pays MORE under this plan as both a grad student and a high earning professional after 2026, which will be most of his career years.  He will certainly be able to afford it, and I guess he's a garbage liberal and should just reconsider his garbage liberal lifestyle choices of being married and having a kid and suck it up. 

Anyway, adding 50k of taxable income to a 30k stipend is a big change in policy.  Most cases have taxes going up significantly for grad students.  I can see why they are upset.




sol

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Re: Republican Tax Plan 2017
« Reply #689 on: November 27, 2017, 10:41:40 PM »
taxes going up significantly for grad students.  I can see why they are upset.

I'm pretty sure this is a feature and not a bug.  Conservatives hate graduate students, educated peoples, and all forms of scientists. 

Educated scientists gave us the theory of evolution and birth control.  Educated scientists tend to doubt the revealed truth of Divine scripture, like when it says animals could talk and the sun stopped in the sky.  Educated scientists question the authority of societally enforced gender discrimination and keep making noises about the wage gap, when they should be telling their womenses to get back in the kitchen.  Educated scientists fight against teaching creationism in public schools.  Clearly, educated scientists oppose the GOP ideology in every form, so why should the GOP encourage anyone else to become one?  Better to just tax them into Oblivion. 

So I don't think it's a coincidence.  The whole tax plan is targeted at groups they don't like, which is why it is so bad for blue states, and poor people who need health insurance, and small businesses, and graduate students, but great for super wealthy inheritors, big corporations, and real estate developers.  It's more politics than policy, but that doesn't mean they won't pass it.
« Last Edit: November 27, 2017, 10:55:04 PM by sol »

MDM

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Re: Republican Tax Plan 2017
« Reply #690 on: November 27, 2017, 10:46:49 PM »
Glad to see the liberal thought process of making a bad decision (having a baby while in grad school while barely getting by) then blaming others for your problems when the situation slightly changes, though. 
I would have a much easier time paying attention to what people say if they were capable of saying it without spewing insults along with whatever else they said.
It's a huge turn-off, and runs rampant these days.
Conservatives hate graduate students, educated peoples, and all forms of scientists. 

JLee - agreed.

mizzourah2006

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Re: Republican Tax Plan 2017
« Reply #691 on: November 28, 2017, 08:07:25 AM »
taxes going up significantly for grad students.  I can see why they are upset.

I'm pretty sure this is a feature and not a bug.  Conservatives hate graduate students, educated peoples, and all forms of scientists. 

Educated scientists gave us the theory of evolution and birth control.  Educated scientists tend to doubt the revealed truth of Divine scripture, like when it says animals could talk and the sun stopped in the sky.  Educated scientists question the authority of societally enforced gender discrimination and keep making noises about the wage gap, when they should be telling their womenses to get back in the kitchen.  Educated scientists fight against teaching creationism in public schools.  Clearly, educated scientists oppose the GOP ideology in every form, so why should the GOP encourage anyone else to become one?  Better to just tax them into Oblivion. 

So I don't think it's a coincidence.  The whole tax plan is targeted at groups they don't like, which is why it is so bad for blue states, and poor people who need health insurance, and small businesses, and graduate students, but great for super wealthy inheritors, big corporations, and real estate developers.  It's more politics than policy, but that doesn't mean they won't pass it.

The entire graduate thing would be terrible, especially given the drastic difference in costs depending on the University. I went to a state school for my PhD and after the first year qualified as in-state, so this likely wouldn't really have impacted me. But if I had gone to a private university like Carnegie Melon, or MIT, etc. It would have placed an enormous burden on me. One thing to keep in mind is that hard sciences tend to have much better stipends than other programs. My stipend was $5k/semester and if I got a summer teaching assistanship it was another $2.3k. If I went to a private university my entire stipend would have been paid out in taxes because I was single at the time.

I wonder if private universities could just strategically adjust the cost of tuition for graduate programs specifically.

Glenstache

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Re: Republican Tax Plan 2017
« Reply #692 on: November 28, 2017, 10:35:18 AM »
The NY Times modeled the bill (or at least one iteration of it) for a large number of middle class households. As the discussion above indicates, it is a mixed bag depending on the specific situation.

https://www.nytimes.com/interactive/2017/11/28/upshot/what-the-tax-bill-would-look-like-for-25000-middle-class-families.html?smid=fb-nytimes&smtyp=cur

Here are the details on their analysis methods:
Quote
Some details about our sources and methodology

The tax analysis is confined exclusively to middle-class households, defined as households that earn two-thirds to two times household-size adjusted median income. That’s roughly $40,000 to $125,000 for a family of four, or about $30,000 to $90,000 for a couple. For singles, the middle class starts at about $20,000, although to make the charts more readable, we aren’t showing households earning less than $40,000. (We’re using what tax analysts call “expanded income,” which includes cash income but also noncash items such as employer contributions to health insurance and the employer share of payroll taxes.)

To figure out how the Senate bill would affect households, we worked with the Open Source Policy Center — a Washington research organization affiliated with the right-leaning American Enterprise Institute — to model the proposal using the center’s TaxBrain program. Special thanks to Ernie Tedeschi, an economist and occasional Upshot contributor, for his thoughts on modeling the impact of the corporate tax cuts.

The data we’re using comes from the Census Bureau’s Current Population Survey, which asks tens of thousands of Americans detailed questions about their household finances every year. Although these records are not as accurate as the administrative I.R.S. tax records that some think tanks like the Tax Policy Center use (particularly regarding the wealthiest Americans), they line up reasonably closely. The Open Source Policy Center adjusted the data to align with I.R.S. definitions of income; the center also ran parts of our analysis using data from the I.R.S. to ensure that the findings held up.

Wexler

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Re: Republican Tax Plan 2017
« Reply #693 on: November 28, 2017, 10:40:30 AM »
taxes going up significantly for grad students.  I can see why they are upset.

I'm pretty sure this is a feature and not a bug.  Conservatives hate graduate students, educated peoples, and all forms of scientists. 

Educated scientists gave us the theory of evolution and birth control.  Educated scientists tend to doubt the revealed truth of Divine scripture, like when it says animals could talk and the sun stopped in the sky.  Educated scientists question the authority of societally enforced gender discrimination and keep making noises about the wage gap, when they should be telling their womenses to get back in the kitchen.  Educated scientists fight against teaching creationism in public schools.  Clearly, educated scientists oppose the GOP ideology in every form, so why should the GOP encourage anyone else to become one?  Better to just tax them into Oblivion. 

So I don't think it's a coincidence.  The whole tax plan is targeted at groups they don't like, which is why it is so bad for blue states, and poor people who need health insurance, and small businesses, and graduate students, but great for super wealthy inheritors, big corporations, and real estate developers.  It's more politics than policy, but that doesn't mean they won't pass it.

The entire graduate thing would be terrible, especially given the drastic difference in costs depending on the University. I went to a state school for my PhD and after the first year qualified as in-state, so this likely wouldn't really have impacted me. But if I had gone to a private university like Carnegie Melon, or MIT, etc. It would have placed an enormous burden on me. One thing to keep in mind is that hard sciences tend to have much better stipends than other programs. My stipend was $5k/semester and if I got a summer teaching assistanship it was another $2.3k. If I went to a private university my entire stipend would have been paid out in taxes because I was single at the time.

I wonder if private universities could just strategically adjust the cost of tuition for graduate programs specifically.

Maybe?

This is such a weird discussion.  Why are the conservatives on this forum arguing about why it's good for people making 30k to suddenly pay a lot more in taxes?  I apologize for posting an article with a weird case (married with kid grad student), which is not the situation for many grad students I'd guess.  It looks like people who have run the numbers estimate at least an extra 2k a year in taxes for many grad students at private institutions.  Can anyone on the the "this tax plan is great!" side of the argument do the magic math that says that a single, no kid grad student doesn't pay more?  And why is everyone ignoring the sunset provisions of the tax bill?  If doubling the standard deduction is indeed better for everyone, what happens when that goes away in 7 years?  Those 2026 grad students are still paying the taxes on their tuition waiver, but they no longer have an increased standard deduction that is supposed to be the spoonful of sugar to make the taxes go down. 




A Definite Beta Guy

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Re: Republican Tax Plan 2017
« Reply #694 on: November 28, 2017, 10:56:26 AM »
taxes going up significantly for grad students.  I can see why they are upset.

I'm pretty sure this is a feature and not a bug.  Conservatives hate graduate students, educated peoples, and all forms of scientists. 

Educated scientists gave us the theory of evolution and birth control.  Educated scientists tend to doubt the revealed truth of Divine scripture, like when it says animals could talk and the sun stopped in the sky.  Educated scientists question the authority of societally enforced gender discrimination and keep making noises about the wage gap, when they should be telling their womenses to get back in the kitchen.  Educated scientists fight against teaching creationism in public schools.  Clearly, educated scientists oppose the GOP ideology in every form, so why should the GOP encourage anyone else to become one?  Better to just tax them into Oblivion. 

So I don't think it's a coincidence.  The whole tax plan is targeted at groups they don't like, which is why it is so bad for blue states, and poor people who need health insurance, and small businesses, and graduate students, but great for super wealthy inheritors, big corporations, and real estate developers.  It's more politics than policy, but that doesn't mean they won't pass it.

The entire graduate thing would be terrible, especially given the drastic difference in costs depending on the University. I went to a state school for my PhD and after the first year qualified as in-state, so this likely wouldn't really have impacted me. But if I had gone to a private university like Carnegie Melon, or MIT, etc. It would have placed an enormous burden on me. One thing to keep in mind is that hard sciences tend to have much better stipends than other programs. My stipend was $5k/semester and if I got a summer teaching assistanship it was another $2.3k. If I went to a private university my entire stipend would have been paid out in taxes because I was single at the time.

I wonder if private universities could just strategically adjust the cost of tuition for graduate programs specifically.

Maybe?

This is such a weird discussion.  Why are the conservatives on this forum arguing about why it's good for people making 30k to suddenly pay a lot more in taxes?  I apologize for posting an article with a weird case (married with kid grad student), which is not the situation for many grad students I'd guess.  It looks like people who have run the numbers estimate at least an extra 2k a year in taxes for many grad students at private institutions.  Can anyone on the the "this tax plan is great!" side of the argument do the magic math that says that a single, no kid grad student doesn't pay more?  And why is everyone ignoring the sunset provisions of the tax bill?  If doubling the standard deduction is indeed better for everyone, what happens when that goes away in 7 years?  Those 2026 grad students are still paying the taxes on their tuition waiver, but they no longer have an increased standard deduction that is supposed to be the spoonful of sugar to make the taxes go down.

Because it's a tax loophole. Employer perks are wage income and should be taxed. If they are not taxed, they are tax loopholes (like your employer-based health insurance, which is the biggest tax loophole in America). It's no different at a university just because the perk happens to be reduced tuition.


Daisy

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Re: Republican Tax Plan 2017
« Reply #695 on: November 28, 2017, 11:06:08 AM »
I don't remember if my fellowship stipend was taxed back in the day when I did my masters degree. I was so low-income though that it probably wasn't much tax...don't know.

When my employer paid for another masters degree, it was considered income and I had to pay income tax on it, even though I never received the actual income in money form. The company directly paid the tuition.

I didn't realize stipend payments for graduate degree were not taxed.

ixtap

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Re: Republican Tax Plan 2017
« Reply #696 on: November 28, 2017, 11:10:05 AM »
I don't remember if my fellowship stipend was taxed back in the day when I did my masters degree. I was so low-income though that it probably wasn't much tax...don't know.

When my employer paid for another masters degree, it was considered income and I had to pay income tax on it, even though I never received the actual income in money form. The company directly paid the tuition.

I didn't realize stipend payments for graduate degree were not taxed.

They are, we are referring to tuition waivers, not stipends.

Some stipends are seen as payment for teaching and therefore taxed as earned income, including FICA. Some are awards and therefore exempt from FICA. However, they are still income to be reported.

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #697 on: November 28, 2017, 11:23:17 AM »

Because it's a tax loophole. Employer perks are wage income and should be taxed. If they are not taxed, they are tax loopholes (like your employer-based health insurance, which is the biggest tax loophole in America). It's no different at a university just because the perk happens to be reduced tuition.

Is the bill closing even one CORPORATE tax loophole???  Corporations keep their SALT deduction and get a 20% rate, but all of a sudden the Republicans think it makes sense to take away loopholes for individuals??  They keep the carried interest loophole benefiting hedge fund managers but make tuition waivers for grad students taxable???
« Last Edit: November 28, 2017, 11:25:50 AM by ZiziPB »



mm1970

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Re: Republican Tax Plan 2017
« Reply #698 on: November 28, 2017, 11:27:12 AM »
taxes going up significantly for grad students.  I can see why they are upset.

I'm pretty sure this is a feature and not a bug.  Conservatives hate graduate students, educated peoples, and all forms of scientists. 

Educated scientists gave us the theory of evolution and birth control.  Educated scientists tend to doubt the revealed truth of Divine scripture, like when it says animals could talk and the sun stopped in the sky.  Educated scientists question the authority of societally enforced gender discrimination and keep making noises about the wage gap, when they should be telling their womenses to get back in the kitchen.  Educated scientists fight against teaching creationism in public schools.  Clearly, educated scientists oppose the GOP ideology in every form, so why should the GOP encourage anyone else to become one?  Better to just tax them into Oblivion. 

So I don't think it's a coincidence.  The whole tax plan is targeted at groups they don't like, which is why it is so bad for blue states, and poor people who need health insurance, and small businesses, and graduate students, but great for super wealthy inheritors, big corporations, and real estate developers.  It's more politics than policy, but that doesn't mean they won't pass it.

The entire graduate thing would be terrible, especially given the drastic difference in costs depending on the University. I went to a state school for my PhD and after the first year qualified as in-state, so this likely wouldn't really have impacted me. But if I had gone to a private university like Carnegie Melon, or MIT, etc. It would have placed an enormous burden on me. One thing to keep in mind is that hard sciences tend to have much better stipends than other programs. My stipend was $5k/semester and if I got a summer teaching assistanship it was another $2.3k. If I went to a private university my entire stipend would have been paid out in taxes because I was single at the time.

I wonder if private universities could just strategically adjust the cost of tuition for graduate programs specifically.

Maybe?

This is such a weird discussion.  Why are the conservatives on this forum arguing about why it's good for people making 30k to suddenly pay a lot more in taxes?  I apologize for posting an article with a weird case (married with kid grad student), which is not the situation for many grad students I'd guess.  It looks like people who have run the numbers estimate at least an extra 2k a year in taxes for many grad students at private institutions.  Can anyone on the the "this tax plan is great!" side of the argument do the magic math that says that a single, no kid grad student doesn't pay more?  And why is everyone ignoring the sunset provisions of the tax bill?  If doubling the standard deduction is indeed better for everyone, what happens when that goes away in 7 years?  Those 2026 grad students are still paying the taxes on their tuition waiver, but they no longer have an increased standard deduction that is supposed to be the spoonful of sugar to make the taxes go down.

Because it's a tax loophole. Employer perks are wage income and should be taxed. If they are not taxed, they are tax loopholes (like your employer-based health insurance, which is the biggest tax loophole in America). It's no different at a university just because the perk happens to be reduced tuition.
I'm thinking that schools will have to make adjustments then, by increasing stipends to facilitate being able to eat, for example.

When my spouse was in grad school, we lived a couple of years in grad student housing.  Very cheap compared to regular housing.  We didn't have kids, but many did.  Some had stay at home spouses, but many spouses (like me) worked.

I can't imagine what it would mean to tax tuition perks like that.  I mean, I went to Carnegie Mellon (undergrad), and thank you US taxpayers for paying for it.  Or most of it.  Actually, y'all paid for my master's degree too.  If you started working before 1996 anyway.

ixtap

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Re: Republican Tax Plan 2017
« Reply #699 on: November 28, 2017, 11:35:59 AM »

I'm thinking that schools will have to make adjustments then, by increasing stipends to facilitate being able to eat, for example.

When my spouse was in grad school, we lived a couple of years in grad student housing.  Very cheap compared to regular housing.  We didn't have kids, but many did.  Some had stay at home spouses, but many spouses (like me) worked.

I can't imagine what it would mean to tax tuition perks like that.  I mean, I went to Carnegie Mellon (undergrad), and thank you US taxpayers for paying for it.  Or most of it.  Actually, y'all paid for my master's degree too.  If you started working before 1996 anyway.

Interesting. When I was working on my PhD, the grad student housing was priced according to the nice apartments in the area plus utilities that I did without (we still had dial up available through the university, so I didn't have cable or internet). And it was not cut in half if you had a roommate, but rather some calculus by which you were at the very least both paying the full cable and internet bills. They ended up opening it up to undergrads because so few grad students fell for it.