Republican Tax Plan 2017

[SaucyAussie]

This thread has really devolved but in an effort to counter balance the gibberish I thought some hard data might help.  Here is a CBO distributional analysis showing the effects of the bill for different income levels, scroll to page 10.  Make of it what you will.
https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/reconciliationrecommendationssfc.pdf

[djadziadax]

This thread has really devolved but in an effort to counter balance the gibberish I thought some hard data might help.  Here is a CBO distributional analysis showing the effects of the bill for different income levels, scroll to page 10.  Make of it what you will.
https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/reconciliationrecommendationssfc.pdf

+1 Devolved into political mud sliding mostly from one side.

And it all because of some economists guess work of the distant future (10 yr horizon). Economist cannot predic next quarter GDP with accuracy, let alone what will happen in 10 year. 3Q GDP revised several times...but we are putting full faith in estimates that are 10 yrs away. Full faith!

Apt comic:

http://dilbert.com/strip/2017-12-01

[FIREchiefsr]

Still has to go to Committee to reconcile with the House.

Kinda, maybe......  With a very close Senate vote, there is always the option that the house will simply take up and pass the Senate bill as written.  Since they're adding back in the $10K property tax exemption, and the pass through has become much closer to the house version (23% vs 25%), there may not be any real sticking points.  The house reduction to three brackets was more marketing than any true simplification, and the ultimate elimination of the estate tax was mostly vapor-legislation as there would be something like seven years for the Dems to put it back in.

[sol]

Economist cannot predic next quarter GDP with accuracy, let alone what will happen in 10 year.

I don't think you have to be an economist to recognizing that just reducing government revenues will increase the deficit.

Republicans have always argued that defecits are bad, and need to be improved by cutting spending.  So they do implicitly accept that the budget controls the deficit, and yet somehow today are arguing that cutting revenues does not.  It's very confusing, if you're a person who expects logical consistency from your elected leadership.

[DarkandStormy]

I've seen it several times on this thread, and I just want to point out that anyone discussing the so-called "national debt" needs to realize that it is a Republican/conservative talking point, and there is no need to buy in to it or concede it. Even those who point to federal debt versus GDP are still losing an important dimension.

So we can agree that the claim that the "fiscal hawk" Tea Party was totally against budget deficits and definitely not a racist reaction to the first black President was a lie?  Cool.

[PathtoFIRE]

Why would household or corporate net worth offset the federal national debt in some way?

When I'm considering my parents' or my neighbor's solvency and net worth, they don't get to add *my* wealth into their calculation.

Who said it does? What it does actually represent are net financial assets without a corresponding private liability. No one ever in the history of time* has ever argued that it's impossible to have too much of this, but it would be very ahistorical of anyone to say that these assets and the private sector spending they correspond to don't help the economy in many ways, with the largest two off the top of my head including smoothing out recessions and excessive growth, and investing in priorities that hold value to us but can not or will not be provided by the private sector alone.

*I may be engaging in some hyperbole here

You must be the reason why every republican in the country suddenly wants to increase the deficit by trillions, after so many decades of excoriating democrats for their supposed "out of control spending" (facts to the contrary notwithstanding).

I'm usually attuned to snark/sarcasm, and I'm still a little baffled by this statement and maybe I'm misreading, but I am _not_ the reason why, I think those reason have been well documented here and elsewhere. Republicans want to take from the large majority and give to the tiny wealthy minority, and they also have ideological and moral disagreements with political and social equality. My point is that deficits and the national debt are not bogeymen, they are legitimate and helpful economic tools, their use over the past 80+ years is directly correlated with our financial and economic success as a country (as so to many others around the world), and it's bad rhetoric to seize upon. And I would like to point out that Democrats often bend over backwards to appease the debt naysayers almost as much as Republicans, hence no public option on the ACA, dismantling welfare, etc.

[sherr]

Devolved into political mud sliding mostly from one side.

And it all because of some economists guess work of the distant future (10 yr horizon). Economist cannot predic next quarter GDP with accuracy, let alone what will happen in 10 year. 3Q GDP revised several times...but we are putting full faith in estimates that are 10 yrs away. Full faith!

Apt comic:

http://dilbert.com/strip/2017-12-01

I enjoy Dilbert as much as the next man, but you should know that Scott Adams trolled hard for Trump this election season (mostly in his blog, a bit in the comic). It was huge bundle of specious reasoning, propaganda, and slightly-wattered-down conspiracy theories. He's also a global warming denier from the same anti-intellectual reasoning ("forecasters can't even get the weather right a week from now, you're telling me they know with confidence that the Earth is long-term warming?!").

Sometimes, like in markets and climate and other chaotic systems, it's much easier to measure and predict long-term general trends then it is short-term ones.

Or do you not believe that repealing the Estate tax is a huge give-away to the ultra-wealthy? Is intentionally running up the deficit during a reasonably prosperous time not just going to result in harder pushes to slash Medicaid / Medicare / Social Security in the next economic downturn?

So you know, enjoy the comic. But consider the source. Maybe he's not a good counter to "one-sided mud slinging". And maybe take Mr. "Well I'm not convinced about Global Warming and therefore the evidence for Global Warming is unconvincing and therefore it's reasonable to believe whatever I want" with a grain of salt.

Edit: Speaking of which, if you think it's at all a coincidence that he published that comic today then you're crazy. He has turned himself into a hardcore Republican propagandist, where reasoning, expertise, and evidence all don't matter as long as you can mock your opponents and be more "persuasive".

[sokoloff]

Why would household or corporate net worth offset the federal national debt in some way?

Who said it does?

Um, you did when you added those figures together and compared them.

Perhaps I misunderstand what you were trying to say in your post, but if you add your and my and other Americans' private assets and liabilities to the government's assets and liabilities and declare that we have positive net worth overall, I think you're saying that that is a sensible and valid way to look at the situation.

[Glenstache]

And it all because of some economists guess work of the distant future (10 yr horizon). Economist cannot predic next quarter GDP with accuracy, let alone what will happen in 10 year. 3Q GDP revised several times...but we are putting full faith in estimates that are 10 yrs away. Full faith!

This is why nobody on this forum is willing to wager their future on something like the 4% SWR. That would be crazy to trust that kind of long term forecasting! /s

[DarkandStormy]

Why would household or corporate net worth offset the federal national debt in some way?

Who said it does?

Um, you did when you added those figures together and compared them.

Perhaps I misunderstand what you were trying to say in your post, but if you add your and my and other Americans' private assets and liabilities to the government's assets and liabilities and declare that we have positive net worth overall, I think you're saying that that is a sensible and valid way to look at the situation.

That's how I read it.  Watch out...the government is going to seize all of our assets and liabilities to pay down the debt.  Is that the strategy?

[jean]

For those who like to follow along (even though it is totally unnecessary and won't know what the final bill looks like until it is all over) but don't have time/desire to lives stream debates, Market Watch is providing occasional updates as things progress: http://blogs.marketwatch.com/capitolreport/2017/12/01/republican-tax-bill-heads-for-senate-vote-live-updates/

It includes a rumor that the AMT might be coming back - that would be quite surprising.  Disclaimer - none of this is final! 

[FIREchiefsr]

I found several reports suggesting that it would be a "modified" AMT with higher thresholds and larger exemptions.  It would almost have to be if they don't want to immediately cancel the tax reductions for a large number of upper middle class workers.

[Debts_of_Despair]

Chuck the Schmuck is still desperately trying to plead his case but it's all but already law, other than going to conference committee.  I hope you all don't shed too many tears when you pay fewer taxes next year.

[ixtap]

One report I read of last minute amendments said that there is an exemption from the endowment tax that is specific to one (well connected) college in Michigan.

And cruise ports in Alaska.

[sherr]

Chuck the Schmuck is still desperately trying to plead his case but it's all but already law, other than going to conference committee.  I hope you all don't shed too many tears when you pay fewer taxes next year.

Incredibly unlikely for me. I assumed that the R's tax bill would pass. Knowing that the increase in the standard deduction would smack the living heck out of the below-the-line charitable giving deduction (and therefore charitable giving itself since they're highly correlated), I took Taxes' advice and opened a DAF and gave a bunch to charity. My taxes are going to be incredibly low this year. I hope you enjoy the tears of those around you when the Republican's "starve the beast" strategy comes home to roost and the most vulnerable people in society are suffering for it.

[Paul der Krake]

It's coming:

https://www.c-span.org/video/?438001-101/us-senate-headed-final-vote-gop-tax-reform&live

[jean]

Updated bill is ready.  It is on the Senate finance committee site, but the news orgs have searchable PDFs instead of images.

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

The removal of my pet loophole seems to have been dropped (combining the 457b limit) if I'm reading it correctly.  Not that it changes my position...

I can't tell what they did with the grad student taxable tuition thing.

[sol]

Updated bill is ready.  It is on the Senate finance committee site, but the news orgs have searchable PDFs instead of images.

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

The removal of my pet loophole seems to have been dropped (combining the 457b limit) if I'm reading it correctly.  Not that it changes my position...

I can't tell what they did with the grad student taxable tuition thing.

No one can tell anything.  They distributed all 500 pages four hours ago, and have already marked up that version with hand-written changes.  No one knows what's actually in this bill.  No one has actually read it.  Republicans just shut down a Democratic motion to postone the vote until Monday to give people a chance to actually read it.  Looks like they'e trying to pass it tonight, consequences be damned.

[Paul der Krake]

The amendments discussed so far are kinda cute. Rubio and Cruz wanted larger child tax credits and expanded 529s, respectively.

[sol]

The amendments discussed so far are kinda cute. Rubio and Cruz wanted larger child tax credits and expanded 529s, respectively.

Cruz's amendment isn't for "expanded" 529s, it's to allow Christian home-schoolers to tax shelter any income they spend on homeschooling, including the fraction of their home allocated to homeschooling and all of the food supplied during the "school day".  It's an ugly farce. 

Just another federal giveaway to the religious right.  Move along, there's nothing new to see here.

[sherr]

Updated bill is ready.  It is on the Senate finance committee site, but the news orgs have searchable PDFs instead of images.

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

The removal of my pet loophole seems to have been dropped (combining the 457b limit) if I'm reading it correctly.  Not that it changes my position...

I can't tell what they did with the grad student taxable tuition thing.

No one can tell anything.  They distributed all 500 pages four hours ago, and have already marked up that version with hand-written changes.  No one knows what's actually in this bill.  No one has actually read it.  Republicans just shut down a Democratic motion to postone the vote until Monday to give people a chance to actually read it.  Looks like they'e trying to pass it tonight, consequences be damned.

"A great national debate now begins. It should not be a partisan debate, for the authors of tax reform come from all parties, and all of us want greater fairness, incentives, and simplicity in taxation." - Ronald Reagan

Oh how low and how despicably the Republicans have fallen.

"Oh but Obamacare - that was debated for well over a year and had many open hearings and expert testimony and industry representatives all having plenty of time to weigh in - was also passed in a rushed final vote, so really both parties are the same so you might as well vote Republican." -Republicans

[jean]

Updated bill is ready.  It is on the Senate finance committee site, but the news orgs have searchable PDFs instead of images.

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

The removal of my pet loophole seems to have been dropped (combining the 457b limit) if I'm reading it correctly.  Not that it changes my position...

I can't tell what they did with the grad student taxable tuition thing.

Which particular loophole are you speaking of?  And how did they propose to eliminate it?  (I haven't kept up with all the iterations of it - waiting until it's closer to final, as I assume it'll keep changing right up until near the end.)

You have the right approach by not keeping up! There was a proposal to combine the 18k limit for 457(b) with the (currently separate) 18k limit for a 401k/403b. There isn't a good reason for these to be separate (IMO) and I didn't think there was any political will (aka lobbyists) to save it. My spouse has access to both, so I was interested and watching this.

If you had a handful of things you hated in the senate bill, it is not impossible to see if they are still in this latest thing, if you knew where they were in the last released bill.  But most of us rely on news summaries (including me, for the other things I hated). 

The amendments discussed so far are kinda cute. Rubio and Cruz wanted larger child tax credits and expanded 529s, respectively.

So, why are these particular amendments being debated when a bunch of stuff seemed to change behind closed doors and were simply presented as part of the new bill?  This is confusing.

[Paul der Krake]

The amendments discussed so far are kinda cute. Rubio and Cruz wanted larger child tax credits and expanded 529s, respectively.

So, why are these particular amendments being debated when a bunch of stuff seemed to change behind closed doors and were simply presented as part of the new bill?  This is confusing.

Not a legislative expert, but my understanding is that amendments are proposed by Senators directly, then a committee determines whether it's worth "debating" (just giving it airtime, really) on the floor. This process happens in parallel to the normal bill drafting process.

[sherr]

The amendments discussed so far are kinda cute. Rubio and Cruz wanted larger child tax credits and expanded 529s, respectively.

So, why are these particular amendments being debated when a bunch of stuff seemed to change behind closed doors and were simply presented as part of the new bill?  This is confusing.

Not a legislative expert, but my understanding is that amendments are proposed by Senators directly, then a committee determines whether it's worth "debating" (just giving it airtime, really) on the floor. This process happens in parallel to the normal bill drafting process.

It's a politics thing. The "behind closed doors" bits are the actual serious parts. The Rubio-Cruz child tax credits that are not behind closed doors are so that Rubio and Cruz can go back and say "Hey at least we tried. Vote for us again, we're one of the good Republicans". They know it'll never be added and they don't care because that's not the point.

[Johnez]

51-49 pass. On to the House. An I gonna get my $4,000 raise this year, or next???

[Exflyboy]

What a shit show!

[Johnez]

At least our 401ks will ride high for a while longer. It is going to be an interesting time for sure.

[ZiziPB]

Wow, just wow.  I've read somewhere that AMT is back?

Anyway, as many of us were saying before, it's all about the corporate rate cut to 20%.  The rest is just window dressing.  Window dressing specifically designed to hurt us all.

[radram]

Anyway, at least changing the step-up basis would be prudent - seems crazy not to.  Unrealized capital gains (not family businesses!) account for a large share of estates that get hit with the estate tax.

If you're advocating getting rid of the step-up in basis, I think that's a bad idea from a practical perspective.

When did Grandpa buy those shares? What were the basis figures on the dates of those various purchases? How much was the result of dividend reinvestments? When were those purchases? What was the share count and cost basis of those shares?

A paperwork and logistical nightmare as compared to "what day did Grandpa die? what were the shares worth on that day? Perfect; glad to have that taken care of in 5 minutes."

Sounds pretty simple to me: if it is worth it to you to keep track, you will. Since when is laziness a valid reason to be sloppy. When alive, grandpa needed to keep track of the cost basis if he wanted to sell in order to not pay a tax on the purchase price. Why upon death is that information suddenly lost? This is especially true in today's world of electronic data storage. Your broker already does this work for you.

Not to mention the fact that an old grandpa will have unrealized earnings that will most likely dwarf the sale price. If is was purchased so long ago that the records are lost, it is probably upwards of 90% unrealized gains anyway. Unless grandpa was a day trader, so then he kept track of those things.

I sure can see why the step-up is a desired outcome, but needed because of piss poor accounting? You didn't sell me.

[CoffeeR]

Are there any changes to 401K/403B or other retirement vehicles in the senate plan? I know there where some changes proposed, but I do not know what got in and what was left out.

[Patches]

Senate added a nice windfall for pass thru entities.  For a few years anyway...

"Most businesses in the United States are organized as “pass through” companies (sole proprietorships, partnerships, LLCs and S corporations) where the income from the business is “passed through” to the owners and taxed at their individual tax rate. Under this bill, most pass-through businesses wouldn't have to pay tax on 23 percent of their income. The idea is to give mom-and-pop shops a sizable tax break. But there are limitations. Law firms, doctor's offices and other “service businesses” that earn over $250,000 wouldn't be eligible for the deduction. Other really large pass-through businesses would have a limit on how much they can deduct." -WaPo

[radram]

Not if the House just passes the Senate version. Which IMO is much more likely than reconciliation + problem solving + both houses passing an improved version.

+1 on this thought. Most likely House R's already have the votes to pass as is in order to keep a revised bill out of the senate that they could screw up.

I think that was why McCain voted no on ACA repeal. He knew whatever was passed would be the bill, not just the beginning of negotiations.Tax cuts are much easier, because they believe if it turns out to be a disaster, they can always raise them again, figuring the D's will go along with any tax increase.

[sokoloff]

Anyway, at least changing the step-up basis would be prudent - seems crazy not to.  Unrealized capital gains (not family businesses!) account for a large share of estates that get hit with the estate tax.

If you're advocating getting rid of the step-up in basis, I think that's a bad idea from a practical perspective.

When did Grandpa buy those shares? What were the basis figures on the dates of those various purchases? How much was the result of dividend reinvestments? When were those purchases? What was the share count and cost basis of those shares?

A paperwork and logistical nightmare as compared to "what day did Grandpa die? what were the shares worth on that day? Perfect; glad to have that taken care of in 5 minutes."

Sounds pretty simple to me: if it is worth it to you to keep track, you will. Since when is laziness a valid reason to be sloppy. When alive, grandpa needed to keep track of the cost basis if he wanted to sell in order to not pay a tax on the purchase price. Why upon death is that information suddenly lost? This is especially true in today's world of electronic data storage. Your broker already does this work for you.

My broker is only obligated to do that for shares purchased in the last few years (I cited the exact cutoff up thread).

Not to mention the fact that an old grandpa will have unrealized earnings that will most likely dwarf the sale price. If is was purchased so long ago that the records are lost, it is probably upwards of 90% unrealized gains anyway. Unless grandpa was a day trader, so then he kept track of those things.

I sure can see why the step-up is a desired outcome, but needed because of piss poor accounting?

If the shares were purchased prior to the requirement for basis tracking by the broker and grandpa knew that he was never going to sell them in his lifetime and that there would be a step-up in basis on death, it's perfectly reasonable accounting to not track the basis. (This happens to be the situation we found ourselves in upon my grandfather's death last year. He bought shares in companies all through his life [as a coal miner, so no multi-million dollar estate here] and I'm not sure he ever sold anything.)

[wenchsenior]

I am unbelievably disgusted with Susan Collins right now.  I really thought she might hold out against this monstrosity.

[DarkandStormy]

Just more proof Republicans don't give a shit about you. Or democracy.  This was all about paying off their billionaire donors. That's it. Fuck them.

And goddammit stop voting GOP. These assholes have no idea how to govern, don't care about anyone but themselves and the top 0.1%.  Remember the complaints from them about Obamacare being passed too quickly? That pesky legislation that had numerous public hearings, mark ups, debate...that one.  They just passed a bill no one has even read, written by Wall Street lobbyists, and are happy about it.

Fuck them all. Stop voting GOP.

[radram]

Anyway, at least changing the step-up basis would be prudent - seems crazy not to.  Unrealized capital gains (not family businesses!) account for a large share of estates that get hit with the estate tax.

If you're advocating getting rid of the step-up in basis, I think that's a bad idea from a practical perspective.

When did Grandpa buy those shares? What were the basis figures on the dates of those various purchases? How much was the result of dividend reinvestments? When were those purchases? What was the share count and cost basis of those shares?

A paperwork and logistical nightmare as compared to "what day did Grandpa die? what were the shares worth on that day? Perfect; glad to have that taken care of in 5 minutes."

Sounds pretty simple to me: if it is worth it to you to keep track, you will. Since when is laziness a valid reason to be sloppy. When alive, grandpa needed to keep track of the cost basis if he wanted to sell in order to not pay a tax on the purchase price. Why upon death is that information suddenly lost? This is especially true in today's world of electronic data storage. Your broker already does this work for you.

My broker is only obligated to do that for shares purchased in the last few years (I cited the exact cutoff up thread).

Not to mention the fact that an old grandpa will have unrealized earnings that will most likely dwarf the sale price. If is was purchased so long ago that the records are lost, it is probably upwards of 90% unrealized gains anyway. Unless grandpa was a day trader, so then he kept track of those things.

I sure can see why the step-up is a desired outcome, but needed because of piss poor accounting?

If the shares were purchased prior to the requirement for basis tracking by the broker and grandpa knew that he was never going to sell them in his lifetime and that there would be a step-up in basis on death, it's perfectly reasonable accounting to not track the basis. (This happens to be the situation we found ourselves in upon my grandfather's death last year. He bought shares in companies all through his life [as a coal miner, so no multi-million dollar estate here] and I'm not sure he ever sold anything.)

After I posted I noticed I missed an entire page of posts I have since read. Thank you for the detail on the dates those transaction records were required. Should have been decades ago. Seems to me there should be a way to come up with a reasonable compromise other than throwing up my hands and saying, fuck it, I can't figure this shit out. Maybe allow step-up for items purchased prior to the forced recording, or maybe use the arbitrary date of purchase to be the mandatory recording date, unless evidence exists of the actual date.The problem with the latter solution is that it picks an arbitrary and false purchase date, just like the current step-up rule does. Solving a problem by doing more of it. I think I have the makings of the start of my political career :)

So then is your opinion that yes, lack of records is a perfectly valid reason to step-up a cost basis, avoiding paying taxes on millions(or billions) of unrealized gains, but only once they die?

Perfectly valid opinion I simply disagree with. Thank you for the discussion. Have a great weekend.

[radram]

Does anyone know how the House/Senate bills treat Form 709?

If you can gift today and use your lifetime exemption while still alive, and the lifetime exemption limit is removed(house version), doesn't that effectively mean there is no such thing as a tax on any gift, allowing trillions to transfer tax free the first day the bill is law?

If I read correctly, Senate version doubles the current limit, while house version eliminated the limit.

[wenchsenior]

Just more proof Republicans don't give a shit about you. Or democracy.  This was all about paying off their billionaire donors. That's it. Fuck them.

And goddammit stop voting GOP. These assholes have no idea how to govern, don't care about anyone but themselves and the top 0.1%.  Remember the complaints from them about Obamacare being passed too quickly? That pesky legislation that had numerous public hearings, mark ups, debate...that one.  They just passed a bill no one has even read, written by Wall Street lobbyists, and are happy about it.

Fuck them all. Stop voting GOP.

I haven't voted for a GOP candidate since a couple votes for McCain in the 1990s (and one vote for a GOP congressperson I despised, to prevent a libertarian whom I despised more from having a shot in a seat that no Dem could ever win).

But at least there used to be some GOP sanity prior to the Great Derangement that began with Clinton's election.

[sokoloff]

So then is your opinion that yes, lack of records is a perfectly valid reason to step-up a cost basis, avoiding paying taxes on millions(or billions) of unrealized gains, but only once they die?

Perfectly valid opinion I simply disagree with. Thank you for the discussion. Have a great weekend.

Basically, yes. Pragmatism and ease for a great many people with small sums over perfect fairness and a one-shot exploit for some. Your position is also perfectly reasonable and consistent; good weekend to you as well!

[accolay]

So if the corporate tax rate is now set at 20% instead of 35%...then the effective tax rate for them will all probably be ... ? (if they're not already receiving a refund)?

Slightly off topic but how long will it be before this helps to contribute to the next economic crash/correction? Assuming we're probably due or close to that anyway...

And about that debt...I'm not an economist, but for those in the know here: since we're experiencing the good times now, wouldn't it be smarter to pay off some debt now instead of adding to it? Just wondering...

[gerardc]

So in summary we'll all pay a little less tax?

What happens to the backdoor/mega-backdoor Roth conversions?

[Exflyboy]

So if the corporate tax rate is now set at 20% instead of 35%...then the effective tax rate for them will all probably be ... ? (if they're not already receiving a refund)?

Slightly off topic but how long will it be before this helps to contribute to the next economic crash/correction? Assuming we're probably due or close to that anyway...

And about that debt...I'm not an economist, but for those in the know here: since we're experiencing the good times now, wouldn't it be smarter to pay off some debt now instead of adding to it? Just wondering...

But you see that would assume we are acting on logic. This is not logic, this is about pandering to well heeled interest groups and brainwashing a very ill informed electorate that have drunk the Kool-Aid a long time ago..

Drain the swamp.. Riiight.

It is amazing just how poor people vote against their interests though.

[accolay]

But you see that would assume we are acting on logic.

Who's this "we"?

This is what happens when they don't put me in charge...

[jleo]

Senate added a nice windfall for pass thru entities.  For a few years anyway...

"Most businesses in the United States are organized as “pass through” companies (sole proprietorships, partnerships, LLCs and S corporations) where the income from the business is “passed through” to the owners and taxed at their individual tax rate. Under this bill, most pass-through businesses wouldn't have to pay tax on 23 percent of their income. The idea is to give mom-and-pop shops a sizable tax break. But there are limitations. Law firms, doctor's offices and other “service businesses” that earn over $250,000 wouldn't be eligible for the deduction. Other really large pass-through businesses would have a limit on how much they can deduct." -WaPo

I am a passthrough business what do you mean by we don't have to pay tax on 23 percent of our income I know there will be a decrease but how did you get to 23%?

[sol]

Perfectly valid opinion I simply disagree with. Thank you for the discussion. Have a great weekend.

Your position is also perfectly reasonable and consistent; good weekend to you as well!

I'm pretty sure this means the internet is broken this morning.

[sokoloff]

I'm pretty sure this means the internet is broken this morning.

It will be repaired quickly, no doubt. It always is... ;)

[jleo]

I am trying to figure out what my tax rate will be with this new tax plan, I am a LLC and file as an s corp as a passthrough to individual return and currently pay tax at an single individual tax rate.

Income 200k plus, single.

Would my entire 200k now be 25% taxed on personal side or how is this going to work?

Appreciate any help on understanding this!

[Paul der Krake]

Does this bill still kill tax lots by imposing FIFO sales? Tried a few keywords, couldn't find a reference to it.

[bacchi]

Senate added a nice windfall for pass thru entities.  For a few years anyway...

"Most businesses in the United States are organized as “pass through” companies (sole proprietorships, partnerships, LLCs and S corporations) where the income from the business is “passed through” to the owners and taxed at their individual tax rate. Under this bill, most pass-through businesses wouldn't have to pay tax on 23 percent of their income. The idea is to give mom-and-pop shops a sizable tax break. But there are limitations. Law firms, doctor's offices and other “service businesses” that earn over $250,000 wouldn't be eligible for the deduction. Other really large pass-through businesses would have a limit on how much they can deduct." -WaPo

I am a passthrough business what do you mean by we don't have to pay tax on 23 percent of our income I know there will be a decrease but how did you get to 23%?

That's the number in the Senate version.

Take advantage of it now. It was a disaster, as Kansas showed, and rates will go up again when revenues hit the floor.

[Patches]

Senate added a nice windfall for pass thru entities.  For a few years anyway...

"Most businesses in the United States are organized as “pass through” companies (sole proprietorships, partnerships, LLCs and S corporations) where the income from the business is “passed through” to the owners and taxed at their individual tax rate. Under this bill, most pass-through businesses wouldn't have to pay tax on 23 percent of their income. The idea is to give mom-and-pop shops a sizable tax break. But there are limitations. Law firms, doctor's offices and other “service businesses” that earn over $250,000 wouldn't be eligible for the deduction. Other really large pass-through businesses would have a limit on how much they can deduct." -WaPo

I am a passthrough business what do you mean by we don't have to pay tax on 23 percent of our income I know there will be a decrease but how did you get to 23%?

I was just quoting the Washington Post... I read another paragraph on a different news site and it confirms the 23%.  Basically the income you show on your k-1 you get to reduce by 23%... Then are taxed normally on the rest. Kinda slick.

But I'm not holding my breath.  Seems to me that the Senate, rather than debating the things they disagreed about, just added into the bill everything in question and punted it back to Congress.