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Thread: Details of Proposed Tax Plan

  1. #1

    Default Details of Proposed Tax Plan

    Tax Plan Released:

    GOP Tax Plan "Talking Point" Highlights Released | Zero Hedge

    Here are the most notable changes:

    Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35%; keeps tax rate for those making over $1 million at 39.6%

    Increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.

    Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600

    Preserving the Child and Dependent Care Tax Credit

    Preserves the Earned Income Tax Credit

    Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000, half the current $1,000,000

    Continues to allow people to write off the cost of state and local property taxes up to $10,000

    Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts

    Repeals the Alternative Minimum Tax

    Lowers the corporate tax rate to 20% – down from 35%

    Reduces the tax rate on business income to no more than 25%

    Establishes strong safeguards to distinguish between individual wage income and “pass-through” business income

    Allows businesses to immediately write off the full cost of new equipment

    Retains the low-income housing tax credit

    Please use this thread to discuss the tax plan, not ideological differences, if that's possible.


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  3. #2

    Default Re: Details of Proposed Tax Plan

    I really liked the press conference visual of the postcard that 90% of taxpayers could use to file in the future.

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  5. Default My taxes are going upppp - alot

    Iím just a middle class worker with a small home and fairly simple taxes. I claim the personal exemption, and itemize to deduct a small amount of mortgage interest, property taxes, and state income taxes. Now I wonít be able to claim the personal exemption, nor will I be able to claim state income taxes. I calculate that my taxes will go up by between three and four thousand dollars a year... I thought this was supposed to cut middle class taxes?

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  7. #4

    Default Re: Details of Proposed Tax Plan

    Well, it's not as bad as feared! Still, I wonder how he is going to pay for all the reductions.
    Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2022
    Past Returns:
    2018 -3.36%, 2017 13.10%, 2016 -1.79%, 2015 8.71%, 2014 -7.39%,5Yr Avg 1.56%

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  9. #5

    Default Re: My taxes are going upppp - alot

    Quote Originally Posted by StockSurfer View Post
    I’m just a middle class worker with a small home and fairly simple taxes. I claim the personal exemption, and itemize to deduct a small amount of mortgage interest, property taxes, and state income taxes. Now I won’t be able to claim the personal exemption, nor will I be able to claim state income taxes. I calculate that my taxes will go up by between three and four thousand dollars a year... I thought this was supposed to cut middle class taxes?
    I'm not claiming to understanding the impact, but to me it seems like these cover the issues you mention, no? Are you married, have kids?

    Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35%; keeps tax rate for those making over $1 million at 39.6%

    Increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.

    Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600

    Preserving the Child and Dependent Care Tax Credit

    Preserves the Earned Income Tax Credit

    Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000, half the current $1,000,000

    Continues to allow people to write off the cost of state and local property taxes up to $10,000

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  11. #6

    Default Re: Details of Proposed Tax Plan

    Well, the market appears to like it.
    Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2022
    Past Returns:
    2018 -3.36%, 2017 13.10%, 2016 -1.79%, 2015 8.71%, 2014 -7.39%,5Yr Avg 1.56%

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  13. #7

    Default Re: Details of Proposed Tax Plan

    Continues to allow people to write off the cost of state and local property taxes up to $10,000
    This $10,000 limit should only impact the higher income earners but I never thought of the state tax deduction as an issue until I heard someone talk about the reason they wanted to get rid of it.

    It makes people who pay less state tax, pay more federal tax comparably.

    A basic example, someone making $100,000 in Florida (0% state income tax) will pay federal tax on $100,000, while a person making $100,0000 in New York who pays say $7,000 in state tax, only pays federal tax on $93,000. Both Americans paying different amount of federal tax on same income.

    So I can see that states with no state income tax would be against the deduction since its residents would pay a higher percentage of federal income tax.

    It was something I never considered, although I haven't come to any conclusion on what I think about it yet.

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  15. #8

    Default Re: Details of Proposed Tax Plan

    What Paul Ryan did NOT say about this bill, which at quick glance will raise my taxes by $7,000-$8,000 dollars, and maybe even more on tens of millions of Americans.

    * Elimination of the student loan interest deduction: The amount paid toward student loan interest can currently be deducted.
    * Elimination of the medical expense deduction: Under current law, individuals who spend over 10% of their income on medical expenses are allowed to deduct part of those costs from their taxes. The proposed new bill would remove that deduction.
    * Elimination of the moving deduction: This allows anyone who moved to a new home in the past year to deduct moving expenses.
    * Elimination of the unreimbursed employee expenses: For many who use their cars for work travel, or travelling salespeople get to deduct hotel and meals (per diem), they no longer get to deduct these costs from their taxes.
    * Elimination of alimony payment deduction: This allows the paying ex-spouse to deduct their payments to the receiving ex-spouse. Since receiving ex-spouses already pay taxes on this income, a repeal of alimony deductions amounts to "double taxation".

    Trump, GOP tax reform bill text: changes to individual brackets, deductions, corporate rate - Business Insider

    The "simplification of the tax code" seems to be a carrot dangled to the unknowing...who initially think its a great idea, but don't realize that a quicker to fill out form will likely cost them thousands of dollars of itemized deductions on home improvement, business travel, alimony payments, student loan interest, medical expenses..etc...
    Last edited by FireWeatherMet; 11-02-2017 at 12:00 PM.
    CURRENTLY 100% C (as of COB 8/13/19) 2nd Aug IFT

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  17. Default Re: Details of Proposed Tax Plan

    The personal exemption is eliminated for those that itemize, so I will pay taxes on the $4,000.00 as compared to before... (The standard deduction is NOT being doubled, itís simply folding the personal exemption on top of the old standard deduction, making it unavailable to homeowners and prospective homeowners trying to see if they can afford a mortgage) ...

    In terms of it lowering the tax rate, the simplification of the tax brackets into less brackets, while making things less complicated, doesnít really translate into substantial savings when compared with the loss of the personal exemption and the state tax deduction...

    I am single and no longer have children under 18, but donít think that I should have to bear the burden of such a huge tax hike that is really the result of the elimination of the personal exemption and state tax deduction


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  19. #10

    Default Re: Details of Proposed Tax Plan

    Quote Originally Posted by FireWeatherMet View Post
    What Paul Ryan did NOT say about this bill, which at quick glance will raise my taxes by $7,000-$8,000 dollars, and maybe even more on tens of millions of Americans.
    What tax bracket would that put you in because a $7K - $8K tax increase would mean you're talking about $50,000 to $55,000 in deductions in just those items - and that's at about an 18% effective rate. I would have $0 deductions under those items so I would pay those taxes.

    Zero, 12%, 25%, and 35%;
    I think no matter how you slice it, someone will win and someone will lose, and that's item by item.

    On the alimony, I agree. If one person has to claim it as income, the person paying should be able to deduct.

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  21. #11

    Default Re: Details of Proposed Tax Plan

    Quote Originally Posted by StockSurfer View Post
    don’t think that I should have to bear the burden of such a huge tax hike that is really the result of the elimination of the personal exemption and state tax deduction
    Is the state tax deduction going away for you? I'm just going by that article that says there's $10,000 limit, but I'm not 100% sure.

    Continues to allow people to write off the cost of state and local property taxes up to $10,000

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  23. #12

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    Default Re: Details of Proposed Tax Plan

    Quote Originally Posted by StockSurfer View Post
    The personal exemption is eliminated for those that itemize, so I will pay taxes on the $4,000.00 as compared to before... (The standard deduction is NOT being doubled, itís simply folding the personal exemption on top of the old standard deduction, making it unavailable to homeowners and prospective homeowners trying to see if they can afford a mortgage) ...

    In terms of it lowering the tax rate, the simplification of the tax brackets into less brackets, while making things less complicated, doesnít really translate into substantial savings when compared with the loss of the personal exemption and the state tax deduction...

    I am single and no longer have children under 18, but donít think that I should have to bear the burden of such a huge tax hike that is really the result of the elimination of the personal exemption and state tax deduction
    You must pay high state taxes.
    May the force be with us.

  24.  
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