The GOP's turd of a tax bill

[Jackalope]

I expect we will pay less due to the higher deduction and the new brackets, but I haven't done any calculations. Is there a site which will estimate the changes?

My analysis so far indicates these the following -

Single filers who currently take the standard deduction and have a positive tax burden and no children will generally get a modest cut. The "higher deduction" amounts to the difference between $12,000 in the GOP plan and $10,400 (the 2017 standard deduction of $6350 + the personal exemption of $4050).

Low income people who qualify for the EITC and/or CTC to the point where they currently have no or a negative tax burden will generally see little or no change. They will not qualify for the increase in the child tax credit.

Middle income families who have children may face tax increases, depending on the number of children, and how much the loss of certain deductions such as SALT is.

People and families who currently make enough to put them in a 33% bracket or higher will generally get a nice cut due to the substantial changes in the upper brackets.

[popeyespappy]

If I plug last year's numbers into this plan and take the standard deduction I'd pay about $200 more in taxes under the new plan than I did last year. I itemized last year, and I probably couldn't under the new plan due to changes in SALT deductions so that is probably about where I'd be at. Luckily for us, Karen and I plan on getting married next year. Under this plan that will cut our combined taxes by about $4360 over filing separately because more than $36,000 of our combined income would be taxed at 12% instead of 25%. I'm not sure what our combined taxes would look like under the current plan.

Interesting... If my partner and I got married, we'd pay a few thousand more under the GOP plan over filing separately, however, I am able to file as head of household instead of single and her income is sufficiently low that she would pay no federal tax so that's certainly where the difference lies.

I wouldn't mind paying the higher taxes if there was actually something in the wings for lower income people - you know, like the health care they want to slash and burn - but that safety net is more likely to contract rather than expand.  

I have a spreadsheet I cooked up to model my own tax situation, I think I'm gonna spend some time modifying it to compare 2017 rates to what they're proposing and working up some hypothetical income/tax situations and see where things break, see where the winners and losers are.

The marriage penalty / break usually works in a couple's favor if one of them earns considerably more than the other. Against them if their income close to the same level. It looks like it would work the same way under this plan. For us it would look like this:



Trumplethinskin is right about one thing. Most people could do their taxes on the back of post card under this plan. The thing is most people could do their taxes on the back of a post card now if they don't itemize deductions.

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Interesting bit of fun.  If the corporate tax rate and our income tax rate both end up @25%, we could conceivably revive our llc...write off most of our bills as the llcs bills -pre tax-, deduct for development incentives, and then reduce our wages paid and drop our income tax bracket...... effectively paying no taxes while qualifying for federal assistance again.

It's almost as if this thing was designed to promote legal tax evasion or something. 

If this plan passes in anything resembling it's current form you definitely want to go the LLC route.

[Minimalist]

85% of the population uses form 1040 EZ now.  The "complicated" schedules are for the wealthy to claim their write-offs.

[vorlon13]

Um . . .

we've been running deficits since Bill Clinton (and a shit load of them before him too) and since Bill they've become large.

No one ever seems to consider them in relation to spending and taxes. And also, with absolutely no wherewithal to cut back on federal borrowing, let alone paying back past borrowed $$$$, why even go thru the drama of talking about tax cuts? The people are already getting a 'force multiplier' with their tax dollars (at least until the day of reckoning comes) so why jump thru the tax cut hoops??

Pay a buck in taxes, government spends a buck + 25 cents (or whatever it is) so tax burden is already relieved!!


It's like a road that is downhill either direction!! Wheee !!!

[Minimalist]

You're forgetting the greed of the upper 1% and since they paid for these republicunt cocksuckers to do their bidding they demand payback.

The last thing the repulbicunts care about are "the people."

[Tiberius]

Is there any word on whether the IRA deduction is still "above the line" because if it isn't that might change things. We would be taking the standard deduction but also deducting IRA contributions (which is currently allowed).

[popeyespappy]

Is there any word on whether the IRA deduction is still "above the line" because if it isn't that might change things. We would be taking the standard deduction but also deducting IRA contributions (which is currently allowed).

USA Today is saying that so far 401K's and IRA's are staying the same.

https://www.usatoday.com/story/money/201...825019001/

[Jackalope]

The marriage penalty / break usually works in a couple's favor if one of them earns considerably more than the other. Against them if their income close to the same level. It looks like it would work the same way under this plan.

Yeah, my experience with the marriage penalty was with fairly similar incomes.

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Trumplethinskin is right about one thing. Most people could do their taxes on the back of post card under this plan. The thing is most people could do their taxes on the back of a post card now if they don't itemize deductions.

People who used the short form aren't going to see any real reduction in complexity. It already was simple.

People who use the long form typical do so because they itemize, many of them will continue to do so.

I itemize, and it's not hard or time consuming at all to do my taxes - it's almost entirely a matter of copying numbers from one form to my 1040 or Schedule A. I'l continue to itemize because my itemized deductions are larger than the standard deduction even with the loss of SALT. (I working in a high-tax state and pay a large amount of property tax and mortgage interest).

My girlfriend files on the short form, and it takes maybe half an hour to do her taxes using online tax prep. My situation is slightly more complex and taxes maybe an hour and a half.

The most complex things about doing your taxes do not appear to be changing. Charitable deductions can be complex, as can capital gains, and figuring the EITC.

[Jackalope]

Is there any word on whether the IRA deduction is still "above the line" because if it isn't that might change things. We would be taking the standard deduction but also deducting IRA contributions (which is currently allowed).

If they do eliminate the IRA deduction, consider a Roth IRA.

[Tiberius]

I have a Roth IRA for myself, since I already contribute to a 401k. My wife has a traditional IRA that we need to deduct.