Author Topic: Republican Tax Plan 2017  (Read 418748 times)

DarkandStormy

  • Handlebar Stache
  • *****
  • Posts: 1498
  • Age: 36
  • Location: Midwest, USA
Re: Republican Tax Plan 2017
« Reply #400 on: November 15, 2017, 05:32:51 PM »


This looks like a pile of shit.

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

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

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #401 on: November 15, 2017, 05:54:33 PM »


This looks like a pile of shit.

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

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

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

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #402 on: November 15, 2017, 05:57:38 PM »
I think if they dropped the estate tax part they could get it. I don't know why they are so focused on it. Maybe because Trump is pushing for it (hmmm?!?).

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

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

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

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #403 on: November 15, 2017, 07:50:05 PM »

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

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

dragoncar

  • Senior Mustachian
  • ********
  • Posts: 10039
  • Registered member
Re: Republican Tax Plan 2017
« Reply #404 on: November 15, 2017, 08:15:49 PM »

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

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

I'd rather be rich than stupid

jean

  • 5 O'Clock Shadow
  • *
  • Posts: 48
Re: Republican Tax Plan 2017
« Reply #405 on: November 15, 2017, 09:37:23 PM »
Even if nothing passes in 2017, I am considering accelerating planned charitable contributions into 2017 for exactly this reason. I worry that elimination of SALT deductibility will effectively negate the tax deductibility of charitable contributions for me, and I have committed to a multi-year gift for a charity.

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

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #406 on: November 15, 2017, 10:09:03 PM »

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

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

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

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

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

sokoloff

  • Handlebar Stache
  • *****
  • Posts: 1191
Re: Republican Tax Plan 2017
« Reply #407 on: November 15, 2017, 11:07:09 PM »
You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?
I spend countless hours putting my taxes together. I have significant write offs due to traveling and taking an M&IE rate vs what the company pays me. It's quite tedious and the record keeping is immense.

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

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #408 on: November 15, 2017, 11:23:59 PM »

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

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

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

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

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

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

dresden

  • Stubble
  • **
  • Posts: 126
Re: Republican Tax Plan 2017
« Reply #409 on: November 16, 2017, 05:14:50 AM »
This article is interesting and confirms something almost all of us already knew:

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

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

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

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

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



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

EscapeVelocity2020

  • Walrus Stache
  • *******
  • Posts: 5234
  • Age: 51
  • Location: Houston
    • EscapeVelocity2020
Re: Republican Tax Plan 2017
« Reply #410 on: November 16, 2017, 07:03:57 AM »
Considering the size of our deficit and growing wealth disparity, upper middle class probably should get a tax increase and the wealthy an even bigger increase.   The changes to Inheritance tax, pass through rate and to a lesser extent AMT primarily benefit the super wealthy.

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

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

DarkandStormy

  • Handlebar Stache
  • *****
  • Posts: 1498
  • Age: 36
  • Location: Midwest, USA
Re: Republican Tax Plan 2017
« Reply #411 on: November 16, 2017, 08:08:54 AM »
LOL.  Link??  Just because that mentioned CBO and JCT it doesn't mean that the bullets presented are accurate.  Have you read the draft bills for the House and Senate and ran the new brackets through any projections?  I have, and can assure you that while I'm not a big fan of a lot of what is in the bills, those "facts" are mostly hyperbole, exaggerations and just plain mis-information.  Where on earth did you find that?

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

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

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

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

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



^This is 2027.

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

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

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

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

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



Tedeschi is using the model from @PolicyBrains.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Enough sources for you?

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

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

desertadapted

  • Stubble
  • **
  • Posts: 155
Re: Republican Tax Plan 2017
« Reply #412 on: November 16, 2017, 10:04:39 AM »
@darkandstormy
And this one:
https://www.washingtonpost.com/news/wonk/wp/2017/11/16/senate-tax-bill-cuts-taxes-of-wealthy-and-hikes-taxes-of-families-earning-under-75000-over-a-decade/?hpid=hp_hp-top-table-main_senatetax-1125a%3Ahomepage%2Fstory&utm_term=.2625337459ea

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

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #413 on: November 16, 2017, 11:33:58 AM »
Enough sources for you?

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

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

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

RangerOne

  • Pencil Stache
  • ****
  • Posts: 714
Re: Republican Tax Plan 2017
« Reply #414 on: November 16, 2017, 11:37:16 AM »
For a family of with 1 or more child in California the amount we are getting fucked by either bill is easy to calculate. And it all comes down to the complete elimination of a tax break for home owners.

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

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

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

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

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

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

...

RangerOne

  • Pencil Stache
  • ****
  • Posts: 714
Re: Republican Tax Plan 2017
« Reply #415 on: November 16, 2017, 11:43:01 AM »

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

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

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

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

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

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

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

ZiziPB

  • Magnum Stache
  • ******
  • Posts: 3472
  • Location: The Other Side
Re: Republican Tax Plan 2017
« Reply #416 on: November 16, 2017, 11:51:01 AM »
We're one step closer: The House passed it.

protostache

  • Pencil Stache
  • ****
  • Posts: 903
Re: Republican Tax Plan 2017
« Reply #417 on: November 16, 2017, 12:00:46 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

DarkandStormy

  • Handlebar Stache
  • *****
  • Posts: 1498
  • Age: 36
  • Location: Midwest, USA
Re: Republican Tax Plan 2017
« Reply #418 on: November 16, 2017, 12:01:01 PM »

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #419 on: November 16, 2017, 12:19:57 PM »
I see a reasonable chance that the Senate passes their bill with only 50 votes and the house winds up just having to approve the Senate bill (instead of developing a combined bill in committee).

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #420 on: November 16, 2017, 12:20:43 PM »
Enough sources for you?

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

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

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

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

Thanks.  That makes perfect sense.

BFGirl

  • Pencil Stache
  • ****
  • Posts: 766
Re: Republican Tax Plan 2017
« Reply #421 on: November 16, 2017, 12:21:33 PM »
Whoa, didn't realize that deferred compensation was also being axed. I take part in a 409a plan with my company, and while it's less than 10% of my income, the taxes on that income alone pushes my family back into the "this new plan increases my taxes" group. Is it just me, or as this plan begins to get carefully dissected, does it not seem like the number of constituencies that will be against it continue to pile up?

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

The 457(b) goes away.


SAD!

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

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

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

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

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

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #422 on: November 16, 2017, 12:22:53 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

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

DarkandStormy

  • Handlebar Stache
  • *****
  • Posts: 1498
  • Age: 36
  • Location: Midwest, USA
Re: Republican Tax Plan 2017
« Reply #423 on: November 16, 2017, 12:24:38 PM »
Enough sources for you?

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

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

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

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

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

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

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

Saving4Fire

  • 5 O'Clock Shadow
  • *
  • Posts: 56
Re: Republican Tax Plan 2017
« Reply #424 on: November 16, 2017, 12:25:42 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

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

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

DarkandStormy

  • Handlebar Stache
  • *****
  • Posts: 1498
  • Age: 36
  • Location: Midwest, USA
Re: Republican Tax Plan 2017
« Reply #425 on: November 16, 2017, 12:58:16 PM »
The 4% reduction in Medicare that people are talking about is because of PAYGO, which is what lead to the sequester back in 2013/2014. Medicaid, Social Security, and the USPS are all exempt but basically every other program gets an across the board cut. Medicare is special in so far as it is only subject to a 4% maximum cut.

Vox explainer on how it works.

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

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

http://www.usdebtclock.org/

We're coming up on $20.5 trillion.  That's nearly $63k per citizen.

I thought Republicans wanted to "balance the budget?" LMAO

marty998

  • Walrus Stache
  • *******
  • Posts: 7372
  • Location: Sydney, Oz
Re: Republican Tax Plan 2017
« Reply #426 on: November 16, 2017, 01:19:19 PM »
Also FUCK the GOP, in particular fuck section 1402 of the proposed tax code. How does changing the tax free sale of a house after 2 years to 5 years help the middle class? News flash, it doesn't. I am one of those middle class families who purchased a house that needed a lot of TLC. My wife and I slow flipped the house while living in it and are now getting ready to sell. Unfortunately, if this goes into law, we will either have to wait 3 more years or sell and pay taxes on the ~$50k in profits we are forecast to make. That would be around $8k in taxes, all so we can fund the 0.01% and repeal the estate tax.

Fuck that and fuck the GOP.

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

https://www.congress.gov/bill/115th-congress/house-bill/1/text#toc-H7A8ADDE279B541D890C20C759B82ABD3

Not normally one to support the GOP but to be fair you haven't really purchased this home with the intention of it being your home. Sounds like you've purchased it to earn a profit before moving onto the next deal. I don't see any problem with you being taxed on the gain.

TexasRunner

  • Pencil Stache
  • ****
  • Posts: 926
  • Age: 33
  • Location: Somewhere in Tejas
Re: Republican Tax Plan 2017
« Reply #427 on: November 16, 2017, 01:32:16 PM »
Also FUCK the GOP, in particular fuck section 1402 of the proposed tax code. How does changing the tax free sale of a house after 2 years to 5 years help the middle class? News flash, it doesn't. I am one of those middle class families who purchased a house that needed a lot of TLC. My wife and I slow flipped the house while living in it and are now getting ready to sell. Unfortunately, if this goes into law, we will either have to wait 3 more years or sell and pay taxes on the ~$50k in profits we are forecast to make. That would be around $8k in taxes, all so we can fund the 0.01% and repeal the estate tax.

Fuck that and fuck the GOP.

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

https://www.congress.gov/bill/115th-congress/house-bill/1/text#toc-H7A8ADDE279B541D890C20C759B82ABD3

Not normally one to support the GOP but to be fair you haven't really purchased this home with the intention of it being your home. Sounds like you've purchased it to earn a profit before moving onto the next deal. I don't see any problem with you being taxed on the gain.

/\
YUP.

My wife and I did the same thing with our last residence.  Purchased at 98k in 2014 and sold for 135k in 2017.  3 years and 37k in gains, some market and some our improvements.  Was that income?  Well its sitting in VTSAX now so you tell me.  Can't live in an index stock.

You can't tell me that you didn't buy that house with making a profit in mind.

(It was also nice when changing houses to have the liquidity and negotiating leverage that cash provides).

RangerOne

  • Pencil Stache
  • ****
  • Posts: 714
Re: Republican Tax Plan 2017
« Reply #428 on: November 16, 2017, 01:33:16 PM »
We're one step closer: The House passed it.

I am concerned this is a likely result. Its such a significant sum of cash I have to assume it will be an impact. For someone buying an average $750k home with a jumbo loan making under $200k they are probably loosing close to $500 a month...

To a degree if a GOP law maker pulled me assigned and explained that this was all an elaborate scheme to simply take tax related distortions out of the housing market I would almost be okay with.

But it extremely frustrating for those trying to make reasonable long term decisions while they decide whether or not to rip off a band-aid and let a slew of homeowners bleed out.

secondcor521

  • Walrus Stache
  • *******
  • Posts: 6020
  • Age: 56
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Republican Tax Plan 2017
« Reply #429 on: November 16, 2017, 02:15:27 PM »
I see a reasonable chance that the Senate passes their bill with only 50 votes and the house winds up just having to approve the Senate bill (instead of developing a combined bill in committee).

I thought they could still use reconciliation even if the bill went to a conference committee...?

Meaning, they could pass two different versions; the House version that passed earlier today and whatever the Senate passes with 50+tie votes, then reconcile the bills in committee, then pass the committee version with 50+tie votes in the Senate (and presumably ~220 in the House).  No?  Yes?

jean

  • 5 O'Clock Shadow
  • *
  • Posts: 48
Re: Republican Tax Plan 2017
« Reply #430 on: November 16, 2017, 02:26:12 PM »
Enough sources for you?

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

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

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

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

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

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

So your parent is a rich billionaire who dies and passes along to you $1 billion in invested assets.  You could sell immediately upon inheriting it and pay no tax on it.
Even if the rich billionaire parent only paid 0.5 billion for the invested assets int he first place, meaning the growth on the investments is never taxed. not for parent, or heir. 

DarkandStormy

  • Handlebar Stache
  • *****
  • Posts: 1498
  • Age: 36
  • Location: Midwest, USA
Re: Republican Tax Plan 2017
« Reply #431 on: November 16, 2017, 02:27:28 PM »
Quote
“You’re rewriting a tax code for a generation, and you are doing it in 10 days, and then to be dismantling health care without any debate at all could have unintended consequences,” Rep. Peter King (R-NY), who voted against the House bill, said. “In [1986] it took two years to put together a tax reform bill; they’re doing it in 10 days.”

Quote
The House’s bill fails to hew to crucial Senate budget rules — making the proposal untenable in the upper chamber. Members seem to be aware of this dilemma.

“My must-changes are I just want the math to work,” Rep. David Schweikert (R-AZ) said of bringing the House and Senate bills together.

The math solutions in the Senate have proved politically difficult.

Quote
The Senate bill leaves many of the deductions the House repeals untouched, and instead repeals Obamacare’s individual mandate, phases in the corporate tax cut, increases the child tax credit, fully repeals the state and local tax deduction, keeps the seven tax brackets — instead of the House’s four — and sunsets almost all of the tax relief for individual Americans by 2025.

Quote
Repealing the individual mandate, Senate Majority Leader Mitch McConnell explained to a room full of CEOs, “would raise $330 billion over the next 10 years [which] would provide us, for example, the opportunity … to make permanent the corporate tax rate.”

But repealing the mandate only raises as much money as it does because it would cause 13 million people to lose, or withdraw from, their individual market health plans and Medicaid, both of which are federally subsidized.

Quote
As a result, about 57% of all filers are worse off in 2027 under the modification versus the original Senate TCJA, as written. In some income groups, like the $50K-$75K band, it's close to 80%

Fuck.  The.  G. O. P.

sherr

  • Handlebar Stache
  • *****
  • Posts: 1541
  • Age: 39
  • Location: North Carolina, USA
Re: Republican Tax Plan 2017
« Reply #432 on: November 16, 2017, 02:30:27 PM »
I see a reasonable chance that the Senate passes their bill with only 50 votes and the house winds up just having to approve the Senate bill (instead of developing a combined bill in committee).

I thought they could still use reconciliation even if the bill went to a conference committee...?

Meaning, they could pass two different versions; the House version that passed earlier today and whatever the Senate passes with 50+tie votes, then reconcile the bills in committee, then pass the committee version with 50+tie votes in the Senate (and presumably ~220 in the House).  No?  Yes?

It's not a question of whether that's possible, is a question of whether that's feasible. If they only barely eked out a 50+tie vote the first time with their ideal bill then it's not likely they'll be able to pass it the second time after a bunch of compromise changes. If the House just passes the Senate version they don't have to worry about that.

Paul der Krake

  • Walrus Stache
  • *******
  • Posts: 5891
  • Age: 17
  • Location: UTC-10:00
Re: Republican Tax Plan 2017
« Reply #433 on: November 16, 2017, 02:34:54 PM »
I don't feel bad one bit for DIY house flippers, no reason why their "wealth building" isn't taxed the same way as other businesses, just like I won't feel sorry for myself if my favorite loopholes (backdoor and megabackdoor Roth) get eliminated with no warning. I could understand the outrage if it had gone from 2 to 20 years, but 2 to 5 is a reasonable measure.

Housing isn't special.

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #434 on: November 16, 2017, 02:38:31 PM »
You would rather pay the same amount of taxes, but save an hour at filing time versus paying less taxes?  Really?
I spend countless hours putting my taxes together. I have significant write offs due to traveling and taking an M&IE rate vs what the company pays me. It's quite tedious and the record keeping is immense.

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

No I said I would like a standard deduction over a tax reduction at this point. As long as it's fairly equal I'm cool with that.


sherr

  • Handlebar Stache
  • *****
  • Posts: 1541
  • Age: 39
  • Location: North Carolina, USA
Re: Republican Tax Plan 2017
« Reply #435 on: November 16, 2017, 02:38:59 PM »
Not normally one to support the GOP but to be fair you haven't really purchased this home with the intention of it being your home. Sounds like you've purchased it to earn a profit before moving onto the next deal. I don't see any problem with you being taxed on the gain.

/\
YUP.

My wife and I did the same thing with our last residence.  Purchased at 98k in 2014 and sold for 135k in 2017.  3 years and 37k in gains, some market and some our improvements.  Was that income?  Well its sitting in VTSAX now so you tell me.  Can't live in an index stock.

You can't tell me that you didn't buy that house with making a profit in mind.

(It was also nice when changing houses to have the liquidity and negotiating leverage that cash provides).

I don't really agree. They're living in it, aren't they? Who are we to say it's not their "home"? I've been living in my home for 6+ years and have no plan to move and I "bought it with making a profit in mind". Why wouldn't I?

And besides all that, it's generally considered rude to change the rules after someone's already made decisions based on the current rules. Which is why they have such a big push to get the tax bill passed before the end-of-year; it would be completely awful to change the rules mid-year after people have already been making decisions. The Republicans could easily have a phase-in period for this rule if they cared to.

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #436 on: November 16, 2017, 02:43:58 PM »
Also FUCK the GOP, in particular fuck section 1402 of the proposed tax code. How does changing the tax free sale of a house after 2 years to 5 years help the middle class? News flash, it doesn't. I am one of those middle class families who purchased a house that needed a lot of TLC. My wife and I slow flipped the house while living in it and are now getting ready to sell. Unfortunately, if this goes into law, we will either have to wait 3 more years or sell and pay taxes on the ~$50k in profits we are forecast to make. That would be around $8k in taxes, all so we can fund the 0.01% and repeal the estate tax.

Fuck that and fuck the GOP.

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

https://www.congress.gov/bill/115th-congress/house-bill/1/text#toc-H7A8ADDE279B541D890C20C759B82ABD3

The flip side of this is why should others pay more to subsidize your home purchase.

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #437 on: November 16, 2017, 03:16:28 PM »
Also FUCK the GOP, in particular fuck section 1402 of the proposed tax code. How does changing the tax free sale of a house after 2 years to 5 years help the middle class? News flash, it doesn't. I am one of those middle class families who purchased a house that needed a lot of TLC. My wife and I slow flipped the house while living in it and are now getting ready to sell. Unfortunately, if this goes into law, we will either have to wait 3 more years or sell and pay taxes on the ~$50k in profits we are forecast to make. That would be around $8k in taxes, all so we can fund the 0.01% and repeal the estate tax.

Fuck that and fuck the GOP.

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

https://www.congress.gov/bill/115th-congress/house-bill/1/text#toc-H7A8ADDE279B541D890C20C759B82ABD3

The flip side of this is why should others pay more to subsidize your home purchase.

Solid logic. While we are at it, lets eliminate the 401k deduction, mortgage deduction and any child care deduction. Because why should anyone else have to subsidize that. Or maybe its because the government, when it was sane and rational, wanted to encourage things that were beneficial for its people rather than the tiny minority who hold all the wealth. This GOP tax bill is bought and paid for by the 0.01%.

We have no issues with population growth in fact if anything it's too fast.

Vast majority of people would actually be better off in Roth accounts, so it actually encourages the wrong behavior.

Government has never been good at allocating assets, which is why socialism doesn't really work. If you want to do something that benefits the people you would keep taxes and other barriers to wealth low on the poor and middle class. This would allow the money to flow in the most efficient manner possible.

Th elimination of the estate tax benefits one segment of the population and the rest of us will be paying for it.

I'm fine reducing Corp profits I would've actually liked to see it even lower but you can't have everything.

CCCA

  • Pencil Stache
  • ****
  • Posts: 633
  • Location: Bay Area, California
  • born before the 80's
    • FI programming
Re: Republican Tax Plan 2017
« Reply #438 on: November 16, 2017, 03:23:57 PM »
Not normally one to support the GOP but to be fair you haven't really purchased this home with the intention of it being your home. Sounds like you've purchased it to earn a profit before moving onto the next deal. I don't see any problem with you being taxed on the gain.

/\
YUP.

My wife and I did the same thing with our last residence.  Purchased at 98k in 2014 and sold for 135k in 2017.  3 years and 37k in gains, some market and some our improvements.  Was that income?  Well its sitting in VTSAX now so you tell me.  Can't live in an index stock.

You can't tell me that you didn't buy that house with making a profit in mind.

(It was also nice when changing houses to have the liquidity and negotiating leverage that cash provides).

I don't really agree. They're living in it, aren't they? Who are we to say it's not their "home"? I've been living in my home for 6+ years and have no plan to move and I "bought it with making a profit in mind". Why wouldn't I?

And besides all that, it's generally considered rude to change the rules after someone's already made decisions based on the current rules. Which is why they have such a big push to get the tax bill passed before the end-of-year; it would be completely awful to change the rules mid-year after people have already been making decisions. The Republicans could easily have a phase-in period for this rule if they cared to.


Well my undersatnding is that the mortgage deduction limits are only for new mortgages going forward so basically everyone is grandfathered in who already owns.  It's clear that they can decide not to change the rules after someone has made important decisions based on the current rules.  Not saying they should or not, but they can.

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #439 on: November 16, 2017, 03:26:13 PM »
Also FUCK the GOP, in particular fuck section 1402 of the proposed tax code. How does changing the tax free sale of a house after 2 years to 5 years help the middle class? News flash, it doesn't. I am one of those middle class families who purchased a house that needed a lot of TLC. My wife and I slow flipped the house while living in it and are now getting ready to sell. Unfortunately, if this goes into law, we will either have to wait 3 more years or sell and pay taxes on the ~$50k in profits we are forecast to make. That would be around $8k in taxes, all so we can fund the 0.01% and repeal the estate tax.

Fuck that and fuck the GOP.

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

https://www.congress.gov/bill/115th-congress/house-bill/1/text#toc-H7A8ADDE279B541D890C20C759B82ABD3

The flip side of this is why should others pay more to subsidize your home purchase.

Solid logic. While we are at it, lets eliminate the 401k deduction, mortgage deduction and any child care deduction. Because why should anyone else have to subsidize that. Or maybe its because the government, when it was sane and rational, wanted to encourage things that were beneficial for its people rather than the tiny minority who hold all the wealth. This GOP tax bill is bought and paid for by the 0.01%.

We have no issues with population growth in fact if anything it's too fast.

Vast majority of people would actually be better off in Roth accounts, so it actually encourages the wrong behavior.

Government has never been good at allocating assets, which is why socialism doesn't really work. If you want to do something that benefits the people you would keep taxes and other barriers to wealth low on the poor and middle class. This would allow the money to flow in the most efficient manner possible.

Th elimination of the estate tax benefits one segment of the population and the rest of us will be paying for it.

I'm fine reducing Corp profits I would've actually liked to see it even lower but you can't have everything.

Hence the reason for me bitching up a storm in this thread :P

My taxes (at least for the year I will sell this house) will be insanely higher. And to hear those GOP congressmen say that they are helping the middle class is nauseating. They are ensuring they have donors come election time, nothing more. Also, Trump and his family could save more than $1 billion under House tax bill.

https://www.nbcnews.com/politics/first-read/trump-his-family-could-save-more-1-billion-under-house-n821491

But good thing we closed that 2 year house tax loophole! All those middle class folk were making way to much money exploiting it by improving their neighborhoods.

Well they are closing lots of loopholes so don't take offense to just one.

The idea had it been executed correctly was to simplify the taxes, get rid of a bunch of side items, and just use a standard deduction for most people.

Th idea sounded nice but it's clear it became a ruse to get rid of the estate tax. Most lawmakers are fairly wealthy so it will benefit them in a more disproportionate way.

It would be funny if the D's won the next election round and brought it back.

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #440 on: November 16, 2017, 03:27:08 PM »
I see a reasonable chance that the Senate passes their bill with only 50 votes and the house winds up just having to approve the Senate bill (instead of developing a combined bill in committee).

I thought they could still use reconciliation even if the bill went to a conference committee...?

Meaning, they could pass two different versions; the House version that passed earlier today and whatever the Senate passes with 50+tie votes, then reconcile the bills in committee, then pass the committee version with 50+tie votes in the Senate (and presumably ~220 in the House).  No?  Yes?

It's not a question of whether that's possible, is a question of whether that's feasible. If they only barely eked out a 50+tie vote the first time with their ideal bill then it's not likely they'll be able to pass it the second time after a bunch of compromise changes. If the House just passes the Senate version they don't have to worry about that.

Yes.  This is exactly what I was suggesting.  I wouldn't be shocked if the Ron Johnson Senate defection is just an orchestrated charade to make this look even closer and dissuade other Senators from trying to pile on changes.  I think he'll vote yes if necessary to get it passed.

inline five

  • Pencil Stache
  • ****
  • Posts: 675
Re: Republican Tax Plan 2017
« Reply #441 on: November 16, 2017, 04:25:52 PM »
If you are basing purchase or career changes of hundreds of thousands of dollars, is saving a couple hundred a month at most really how you should be evaluating it?!

It's pretty ridiculous to pretend that you would've gotten a $700k mortgage to save $200/month but now that you can't deduct it, all bets are off. Yeah ok whatever.

Dancin'Dog

  • Handlebar Stache
  • *****
  • Posts: 1924
  • Location: Here & There
Re: Republican Tax Plan 2017
« Reply #442 on: November 16, 2017, 04:39:42 PM »
Is the 1031 exchange staying? 

Debts_of_Despair

  • Pencil Stache
  • ****
  • Posts: 544
  • Location: NY
Re: Republican Tax Plan 2017
« Reply #443 on: November 16, 2017, 04:44:37 PM »
DINC here with no mortgage, moderate property taxes, have state income tax, and maxing out two pre-tax retirement accounts.  I would consider this a pretty average MMM household.  We will save about $1,800 in taxes under the House plan.  Why is everyone so outraged?  What am I missing?

JLee

  • Walrus Stache
  • *******
  • Posts: 7683
Re: Republican Tax Plan 2017
« Reply #444 on: November 16, 2017, 04:45:53 PM »
DINC here with no mortgage, moderate property taxes, have state income tax, and maxing out two pre-tax retirement accounts.  I would consider this a pretty average MMM household.  We will save about $1,800 in taxes under the House plan.  Why is everyone so outraged?  What am I missing?

Until 2025, when all your tax breaks disappear to continue to fund the permanent corporate cuts?

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #445 on: November 16, 2017, 04:50:35 PM »
DINC here with no mortgage, moderate property taxes, have state income tax, and maxing out two pre-tax retirement accounts.  I would consider this a pretty average MMM household.  We will save about $1,800 in taxes under the House plan.  Why is everyone so outraged?  What am I missing?

Well put.  I've ran my numbers under both bills, and I save money.  I think there has been way too much focus on what is being eliminated and not enough people seeing how the bracket changes offset the losses.

Debts_of_Despair

  • Pencil Stache
  • ****
  • Posts: 544
  • Location: NY
Re: Republican Tax Plan 2017
« Reply #446 on: November 16, 2017, 04:51:09 PM »
Until 2025, when all your tax breaks disappear to continue to fund the permanent corporate cuts?

I believe that is in the Senate bill only.

FIREchiefsr

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Republican Tax Plan 2017
« Reply #447 on: November 16, 2017, 04:53:52 PM »
DINC here with no mortgage, moderate property taxes, have state income tax, and maxing out two pre-tax retirement accounts.  I would consider this a pretty average MMM household.  We will save about $1,800 in taxes under the House plan.  Why is everyone so outraged?  What am I missing?

Until 2025, when all your tax breaks disappear to continue to fund the permanent corporate cuts?

This is business as usual under reconciliation.  Typically, everything would sunset, but by making the individual mandate change permanent, I think they can offset the added deficits from the corporate rate cuts beyond ten years; thus making them "permanent."  Permanent is an awful word in this context, because nothing is permanent in Washington.  After 8 years of lower rates, there should be no issue with gaining bipartisan votes to then make the individual rates permanent.  The same would likely not be true for the corporate cuts.  This is exactly what happened with the Bush tax cuts.

sokoloff

  • Handlebar Stache
  • *****
  • Posts: 1191
Re: Republican Tax Plan 2017
« Reply #448 on: November 16, 2017, 05:11:31 PM »
If you are basing purchase or career changes of hundreds of thousands of dollars, is saving a couple hundred a month at most really how you should be evaluating it?!

It's pretty ridiculous to pretend that you would've gotten a $700k mortgage to save $200/month but now that you can't deduct it, all bets are off. Yeah ok whatever.
$700K mortgage, 30-year at 4% has about $27K in first year interest and (around here) $10K in property taxes. You need $16K in gross monthly income to keep your front-end total housing cost ratio to 28%. $16K * 12 is $192K per year gross income. That's going to put most people into the 28% bracket today. If the only deductions you had today were the $37K above, minus the $12.7K MFJ standard deduction, you're deducting an additional $14.3K at 28% or $4K using pretty bare minimum assumptions. $333/mo against a total housing cost of $4500 is a ~7.5% (after-tax) discount. Invest $265 per month at 6% (over-crediting the fact that interest goes down as you pay down the principal) and in 30 years, it's a quarter-million bucks difference vs not being able to deduct it.

I would imagine that most people care about a 7.5% discount on their greatest single expense, even if they don't realize that it's a quarter-million dollar difference over 30 years. Even seemingly small differences applied regularly over a long period can be financial life changers.

mousebandit

  • Bristles
  • ***
  • Posts: 316
Re: Republican Tax Plan 2017
« Reply #449 on: November 16, 2017, 05:18:11 PM »
Kevin, there are a few different exceptions to the rules for how long you live in the house to be able to claim the tax exemption.  Under some circumstances you can prorate the exemption.  With only about $50k in profits, you would be well under half of the $500k mfj exemption limit.  So, if you fit a loophole, and live there half of the required period, say 2-1/2 years, you could. claim up to half of the mfj limit.  It doesn't necessarily work for everyone, but see if you can make it work for you. 

 

Wow, a phone plan for fifteen bucks!