Republican Tax Plan 2017

[Psychstache]

I'm not actually sure what view it is that you think I hold and that you disagree with.

You're a stranger on the internet, and therefore you must be wrong.  I'm not sure what you're wrong about, but I'm absolutely certain that you're wrong.

Next I will compare you to Hitler.

What a succinct summary of every comments page ever.

Sent from my Pixel using Tapatalk

[OurTown]

401(k) tax treatment is not totally out of the woods yet.  It looks like Sen. Hatch offered an amendment to Rothify the over-50 catch up contributions.

People over 50 would no longer be able to make excess contributions to workplace retirement plans from their pretax earnings under an amendment that was filed by Senate Finance Chairman Orrin Hatch ahead of the tax markup Monday.

The amendment would raise the “catch up” contributions to retirement savings plans under section 401(k), 403(b) and 457(b) to $9,000, but require that they be Roth only. Currently, almost all employers offering 401(k) plans allow eligible workers age 50 and over to make additional contributions, which are capped $6,000 for 2017, on top of the standard $18,000 limit. 

[JLee]

I'm all for simplifying the tax code, limiting itemized deductions and lowering corporate taxes (assuming corporate loopholes were also limited but the senate plan of territorial system is ludicrous.)   But repealing the estate tax, taxing PHD students (looks like senate will repeal this) and lowering taxes for the top .1% shouldn't be part of the plan.  In fact, I think there should be some sort of Buffet rule where the highest earners should pay a certain %.

Raising taxes on the upper-middle class Americans and decreasing taxes on the richest Americans to increase our national debt isn't counterproductive.

In addition, some sort of spending reduction should be in place.  Start off with the military.

I am in almost complete agreement with your statements.

And those complaining about paying $18k in property taxes in their state and not being able to deduct that...I'd be complaining about the high tax in that state and trying to move away from that state or try to influence your state to reduce taxes rather than keeping another complicated deduction in federal income tax laws.

We already are.

http://www.app.com/story/news/local/people/2017/01/04/more-people-left-new-jersey-2016-than-any-other-state/96156296/

Deducting tax is now complicated? I don't think you should have to use taxed dollars to pay taxes...but what do I know.

[sol]

Deducting tax is now complicated? I don't think you should have to use taxed dollars to pay taxes...but what do I know.

Wouldn't this mean that one couldn't impose both a sales tax and an income tax? Or an income tax and an estate tax? Or a corporate income tax and a tax on dividends?

The key distinction here is that we don't usually tax money, we tax transactions.  All money has been taxed before.  But the government normally only taxes money when it moves or changes hands (property taxes being the obvious exception, and the least philosophically defensible form of taxation that we still use that I can think of).  We tax income because the employer is transferring money to the employee.  We tax sales because the individual is transferring money to a business.  Government facilitates and protects these transactions, so it takes a cut of the transaction.

But why does it make sense to charge someone money just to OWN something.  Not to use it, or sell it, or give it away or invest it or anything.  Property taxes are basically rent you have to pay to the government because government owns everything and you own nothing.  It makes the whole concept of "ownership" into a joke.  We should all admit that a property deed is just a fancy lease.

[sol]

What is the standard deduction all about, anyway? Wouldn’t it be just as logical to say that everyone may only itemise? Why are deductions and the personal exemptions phased out at higher incomes?

I think the idea behind the standard deduction is that we all need some amount of money just to survive, and taxes shouldn't prevent you from surviving.  So we exempt the first chunk of income, up to the minimum that we think is necessary for survival.

We use the standard deduction instead of making everyone itemize because not everyone has anything to itemize, and those people still need to have some income exempted so that they can survive.

Deductions and exemptions are phased out at higher incomes as a sneaky way of raising the marginal rate on that upper income.  Those people have more than enough to survive, so we tax their surplus at a higher rate in order to allow all the poor people to not have to pay taxes on the income they need to survive.

[freya]

And those complaining about paying $18k in property taxes in their state and not being able to deduct that...I'd be complaining about the high tax in that state and trying to move away from that state or try to influence your state to reduce taxes rather than keeping another complicated deduction in federal income tax laws.

We already are.

http://www.app.com/story/news/local/people/2017/01/04/more-people-left-new-jersey-2016-than-any-other-state/96156296/

Deducting tax is now complicated? I don't think you should have to use taxed dollars to pay taxes...but what do I know.

Even without the loss of the SALT deduction, the highest-tax states are eventually going to have reduce their tangled bureaucracies and lower their entitlement spending to stay solvent.  New York is suffering from loss of mid to high income residents as well.  The state just put through a small (1%) tax cut for the middle income bracket, because of this very issue. 

One more cut like that will balance out the federal tax increase I'd get hit with if the GOP tax bill passes in its current form.

[maizefolk]

Deducting tax is now complicated? I don't think you should have to use taxed dollars to pay taxes...but what do I know.

Wouldn't this mean that one couldn't impose both a sales tax and an income tax? Or an income tax and an estate tax? Or a corporate income tax and a tax on dividends?

What is the standard deduction all about, anyway? Wouldn’t it be just as logical to say that everyone may only itemise? Why are deductions and the personal exemptions phased out at higher incomes?

It’s all arbitrary. There’s no cohesive philosophy to it.

In order: I'm not sure, but I've always assumed the argument was making life simpler for IRS audits because more people's tax returns will be easier to verify. Absolutely just as logical, although it'd also be just as logical to just say no one can itemize and we'd get rid of the whole argument over what is and isn't deductible once and for all. Because our congressional reps are so afraid to raise tax RATES that they resort to weird tricks to raise total taxes paid, even if it creates an incredibly messy tax code and means that the actual marginal tax rates sometimes go down instead of up as people make more money.

@sol I do wonder if views about property taxes would be different if more people owned their homes free and clear without a mortgage. With a mortgage you have to write a check every month or lose your house anyway so it's harder to get too upset about the government also taking a piece of that check. Without a mortgage the inability to really own real estate probably becomes more clear.

[JLee]

Deducting tax is now complicated? I don't think you should have to use taxed dollars to pay taxes...but what do I know.

Wouldn't this mean that one couldn't impose both a sales tax and an income tax? Or an income tax and an estate tax? Or a corporate income tax and a tax on dividends?

What is the standard deduction all about, anyway? Wouldn’t it be just as logical to say that everyone may only itemise? Why are deductions and the personal exemptions phased out at higher incomes?

It’s all arbitrary. There’s no cohesive philosophy to it.

In order: I'm not sure, but I've always assumed the argument was making life simpler for IRS audits because more people's tax returns will be easier to verify. Absolutely just as logical, although it'd also be just as logical to just say no one can itemize and we'd get rid of the whole argument over what is and isn't deductible once and for all. Because our congressional reps are so afraid to raise tax RATES that they resort to weird tricks to raise total taxes paid, even if it creates an incredibly messy tax code and means that the actual marginal tax rates sometimes go down instead of up as people make more money.

@sol I do wonder if views about property taxes would be different if more people owned their homes free and clear without a mortgage. With a mortgage you have to write a check every month or lose your house anyway so it's harder to get too upset about the government also taking a piece of that check. Without a mortgage the inability to really own real estate probably becomes more clear.

The average property tax bill in New Jersey is 9% of income.  I think people notice that whether they're already writing a check or not...

[maizefolk]

That is indeed strikingly high.

It's not quite as bad as it sounds since that website is comparing average residential property taxes to median income. This introduces two sources of bias:
1) Things like household incomes and property values have a long right tail in their distributions, so averages will be significantly higher than medians. Comparing either median income to median property tax or average income to average property tax is going to be a fairer comparison and make the numbers look a little less frightening.
2) About 60% of NJ residents own their homes. Renters tend to be poorer than home owners, so the ratio of the median residential property tax rate to the median income of households that own a home would be less frightening than when renters are included on the income side.

To be clear, I've no doubt that NJ property taxes really are ridiculously high, I'm just pointing out a couple of reasons why they're not quite as bad as some people might think from the numbers in that link.

[JLee]

That is indeed strikingly high.

It's not quite as bad as it sounds since that website is comparing average residential property taxes to median income. This introduces two sources of bias:
1) Things like household incomes and property values have a long right tail in their distributions, so averages will be significantly higher than medians. Comparing either median income to median property tax or average income to average property tax is going to be a fairer comparison and make the numbers look a little less frightening.
2) About 60% of NJ residents own their homes. Renters tend to be poorer than home owners, so the ratio of the median residential property tax rate to the median income of households that own a home would be less frightening than when renters are included on the income side.

To be clear, I've no doubt that NJ property taxes really are ridiculously high, I'm just pointing out a couple of reasons why they're not quite as bad as some people might think from the numbers in that link.

In my county:

Median Annual Property Tax Payment: $9,373
Median Household Income: $81,708

[sokoloff]

That is indeed strikingly high.

It's not quite as bad as it sounds since that website is comparing average residential property taxes to median income. This introduces two sources of bias:
1) Things like household incomes and property values have a long right tail in their distributions, so averages will be significantly higher than medians. Comparing either median income to median property tax or average income to average property tax is going to be a fairer comparison and make the numbers look a little less frightening.
2) About 60% of NJ residents own their homes. Renters tend to be poorer than home owners, so the ratio of the median residential property tax rate to the median income of households that own a home would be less frightening than when renters are included on the income side.

To be clear, I've no doubt that NJ property taxes really are ridiculously high, I'm just pointing out a couple of reasons why they're not quite as bad as some people might think from the numbers in that link.

There's a likely third source of bias, which is taking property tax bills and dividing them by income, without regard to the fact that there are many multi-family and apartment buildings where one bill represents many doors. If the "study" doesn't mention that they controlled for that, I'd assume they didn't.

[maizefolk]

Yikes I didn't even think of that, good point sokoloff!

[DarkandStormy]

http://www.washingtonexaminer.com/steven-mnuchin-shifts-says-its-very-hard-not-to-cut-taxes-for-wealthy/article/2637899

Steven Mnuchin shifts, says it's 'very hard' not to cut taxes for wealthy

Whoops!

http://www.cnn.com/2017/11/10/politics/mcconnell-new-york-times-tax-plan/index.html

Senate Majority Leader Mitch McConnell said Friday that he "misspoke" when he had previously said nobody in the middle class would get a tax increase under the new GOP plan, according to The New York Times.

[maizefolk]

It's not hard at all. You just have to add a tax bracket that is higher than current brackets. It can start at extremely high levels if you like. After all the current plan already has a tax rate that doesn't kick in until you hit a million dollars.

12%, 25%, 35% and 45% brackets would do the trick just fine.

[OurTown]

On the property tax issue, the federal government cannot levy a property tax on real property, only the states can.  That is because the state (not the U.S.) is the allodial owner of all real property within its borders.  This system goes all the way back to William the Conqueror in 1066.  In a very real sense, if you own real property in fee simple absolute you are, in fact, merely holding that property as a tenant on behalf of the state.  Your property tax paid to the state, or its municipal subsidiaries, is in some sense a form of rent that you and your heirs will pay in perpetuity.  This is also why the state has the right of eminent domain to condemn your property and put a highway through your front yard.

[dandarc]

This is also why the state has the right of eminent domain to condemn your property and put a highway through your front yard.

Anything that cuts down the amount of yard to mow is OK by me.

[CCCA]

This seems like a biggie in the Senate's version of the tax plan:
https://www.wsj.com/articles/americas-fund-companies-argue-proposed-tax-change-will-cost-investors-1510679698


According to this article, they want to change the rules about which lots you are allowed to sell if you have multiple tax lots.  They want to use the FIFO - first in and first out rule so you'd always have to sell the oldest first even if you could sell a newer one for a tax loss.  Generally it sucks because it prevents you from minimizing your taxes.


Understandably the fund companies are opposed to this because it hurts the average investors.

[clutchy]

I don't know if people have noticed but AMT is getting repealed as well. 

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


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

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

[BFGirl]

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

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

The 457(b) goes away.

SAD!

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

[mm1970]

I don't know if people have noticed but AMT is getting repealed as well. 

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


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

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

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

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

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

[sokoloff]

This seems like a biggie in the Senate's version of the tax plan:
https://www.wsj.com/articles/americas-fund-companies-argue-proposed-tax-change-will-cost-investors-1510679698

According to this article, they want to change the rules about which lots you are allowed to sell if you have multiple tax lots.  They want to use the FIFO - first in and first out rule so you'd always have to sell the oldest first even if you could sell a newer one for a tax loss.  Generally it sucks because it prevents you from minimizing your taxes.

Understandably the fund companies are opposed to this because it hurts the average investors.

This is ridiculous, but I suspect it just means that investors in taxable accounts will just need to manage multiple accounts to substantially get around the issue, as presumably lot selection will not cross accounts. Lots of paperwork and aggravation to get an effect similar to today with no practical advantage to the government.

[FIREchiefsr]

Here we go again..... (repeal of ACA individual mandate)

https://www.msn.com/en-us/news/politics/mcconnell-senate-tax-bill-will-include-repeal-of-obamacare-mandate/ar-BBEY1Tn?li=AA5a8k&ocid=spartanntp

I'm guessing this would take a form similar to what was attempted earlier this year (no penalty for no insurance, but a delay for adding coverage).  Technically, under reconciliation, I don't thing they can eliminate the mandate but they can reduce the fines to zero.  Is that correct?

[secondcor521]

I'm guessing this would take a form similar to what was attempted earlier this year (no penalty for no insurance, but a delay for adding coverage).  Technically, under reconciliation, I don't thing they can eliminate the mandate but they can reduce the fines to zero.  Is that correct?

I'm no expert, but I think that under the Senate rules, to use reconciliation, the bill has to be budget related.  I think it would be fairly easy to argue that eliminating the mandate is budget related, since it would save $338M (I think that was the number I saw) over 10 years.  So I think they could eliminate the mandate as a matter of Senate rules.

However, I do think that eliminating the mandate makes it politically more difficult to get a tax bill passed quickly.  I think that is why the suggestion hasn't gained much steam yet from what I have heard.

[clutchy]

I don't know if people have noticed but AMT is getting repealed as well. 

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


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

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

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

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

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

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

[ZiziPB]

Seems like Republicans are shooting themselves in the foot with the ACA mandate repeal.  I think it's going to make it extremely difficult to pass the tax bill with that included.  Not that I'm upset about it.  Better the devil you know...

[Ocinfo]

This seems like a biggie in the Senate's version of the tax plan:
https://www.wsj.com/articles/americas-fund-companies-argue-proposed-tax-change-will-cost-investors-1510679698

According to this article, they want to change the rules about which lots you are allowed to sell if you have multiple tax lots.  They want to use the FIFO - first in and first out rule so you'd always have to sell the oldest first even if you could sell a newer one for a tax loss.  Generally it sucks because it prevents you from minimizing your taxes.

Understandably the fund companies are opposed to this because it hurts the average investors.

This is ridiculous, but I suspect it just means that investors in taxable accounts will just need to manage multiple accounts to substantially get around the issue, as presumably lot selection will not cross accounts. Lots of paperwork and aggravation to get an effect similar to today with no practical advantage to the government.

It’s just part of how they are gaming the system by trying to shift as much tax revenue into the 10 year planning horizon. Those with enough money/time to structure in new complicated ways will be fine but most will be slightly worse off. I keep seeing things that likely make the tax code more complicated (e.g., the 25% pass through rate that’ll be a boon for lawyers and accountants).


Sent from my iPhone using Tapatalk

[FIREchiefsr]

I'm guessing this would take a form similar to what was attempted earlier this year (no penalty for no insurance, but a delay for adding coverage).  Technically, under reconciliation, I don't thing they can eliminate the mandate but they can reduce the fines to zero.  Is that correct?

I'm no expert, but I think that under the Senate rules, to use reconciliation, the bill has to be budget related.  I think it would be fairly easy to argue that eliminating the mandate is budget related, since it would save $338M (I think that was the number I saw) over 10 years.  So I think they could eliminate the mandate as a matter of Senate rules.

However, I do think that eliminating the mandate makes it politically more difficult to get a tax bill passed quickly.  I think that is why the suggestion hasn't gained much steam yet from what I have heard.

Based upon the link, it has not only gained steam but appears to be "full steam ahead!"  If/when this winds up in the final approved Senate bill, having the repeal in there will make it even more difficult for house members to vote against it.  This may be part of the play at this point.

[sol]

Married filing jointly, AMT starts at around $84,000, and the higher tax rate at around $150k.

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

[mm1970]

Married filing jointly, AMT starts at around $84,000, and the higher tax rate at around $150k.

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

I mean probably more like $84k after all of those deductions (that's the 26% tax rate), but then many of those deductions stop counting.  I believe (thanks google) that the 28% AMT rate hits at around $150k, after all of those deductions.

So, if you've got two 40-something engineers (even though my own pay is crap), and you live in CA with a very high mortgage interest and high state tax, it doesn't really matter because many of those deductions don't count.  Turbo tax does all that math for you - put in the deductions for state tax, mortgage interest, childcare, charitable donations, etc. and then...you click the "check AMT" box and it says "just kidding!  You really owe this amount."  So yes, I have mortgage deductions and state tax deductions and even childcare deductions, but I'm pretty sure I shouldn't even bother with the FSA, because I do the paperwork but we end up paying it back anyway.

State tax deductions, for example, are not allowed per AMT.  We are taxed at 9.3%.  That's a big chunk.

https://en.wikipedia.org/wiki/Alternative_minimum_tax

My coworker said "I never click that box", so I guess maybe there's an out??

[MDM]

My coworker said "I never click that box", so I guess maybe there's an out??

Uh, no.

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

More to the point, there are so many moving parts to the AMT that making generic "if you make X you will (or won't) have to pay AMT" statements is a fool's errand.

[dragoncar]

Married filing jointly, AMT starts at around $84,000, and the higher tax rate at around $150k.

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

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

[mm1970]

My coworker said "I never click that box", so I guess maybe there's an out??

Uh, no.

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

More to the point, there are so many moving parts to the AMT that making generic "if you make X you will (or won't) have to pay AMT" statements is a fool's errand.

I was joking.  I think it's interesting that you have to actively "check" a box to calculation if you should pay the AMT.

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

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

[SpareChange]

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

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

The 457(b) goes away.

SAD!

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

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

[Wilson Hall]

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

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

The 457(b) goes away.

SAD!

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

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

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

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

[DarkandStormy]

https://twitter.com/TopherSpiro/status/930522616980484097

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

[boarder42]

https://twitter.com/TopherSpiro/status/930522616980484097

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

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

[Saving4Fire]

Tuesday night the Senate GOP quietly added language to sunset individual tax cuts, but keep the corp tax cuts permanent:

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

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

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

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

Full Story


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

[sherr]

https://twitter.com/TopherSpiro/status/930522616980484097

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

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

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

[boarder42]

https://twitter.com/TopherSpiro/status/930522616980484097

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

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

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

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

[sherr]

https://twitter.com/TopherSpiro/status/930522616980484097

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

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

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

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

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

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

So, yes just yes?

[Saving4Fire]

https://twitter.com/TopherSpiro/status/930522616980484097

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

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

Removing the mandate would likely wreck the market which would make insurance unaffordable for millions and the reason why the number is so big.  You can call that "a choice", but it's a crappy one.

[jean]

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

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

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

Final bill - ???? No one knows

If you cash out the 457b, you'll need to pay taxes.  If you planned on using that money for something other than retirement, you could cash it out (if one of these bills passes).  But I would just leave it there for retirement and treat it as a 401k.  You can get the money out through Roth conversions / SEPP.

[desertadapted]

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

[OurTown]

Shorter version of the Republican Tax Plan:  it's a big middle finger to the millionaire next door types. 

[Saving4Fire]

Shorter version of the Republican Tax Plan:  it's a big middle finger to the millionaire next door types.

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

[DarkandStormy]

This looks like a pile of shit.

[jean]

If nothing is passed before the end of 2017, what happens?  Can they pass in early 2018 and have it go into effect for all of 2018, even though the year already started? 

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

[FIREchiefsr]

This looks like a pile of shit.

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

[boarder42]

If nothing is passed before the end of 2017, what happens?  Can they pass in early 2018 and have it go into effect for all of 2018, even though the year already started? 

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

Yes they can

[frugalecon]

If nothing is passed before the end of 2017, what happens?  Can they pass in early 2018 and have it go into effect for all of 2018, even though the year already started? 

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

Yes they can

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