‘Major, Major’ Tax Cut May Not Be in Store for Middle Class

[CaliCat 3,957]

The so-called president's tax plan may not be so great after all.

 

 

https://www.nytimes.com/2017/11/02/us/politics/middle-class-tax-cut-republican-bill.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=b-lede-package-region&region=top-news&WT.nav=top-news

 

Early projections suggest the bill would cut taxes for an average middle-class family. But the typical cut could be relatively modest, compared with the benefits for businesses and high earners. More important, the myriad changes in the code would actually raise taxes on nearly 13 million tax filers who earn $100,000 a year or less, according to preliminary calculations using the open-source economic modeling software TaxBrain.

Those changes also include limits on, or the elimination of, what might be called tax breaks for middle-class aspirers. The bill would no longer allow Americans to deduct interest on student loans they took out to attend college. It would limit mortgage interest deductions to $500,000 on newly purchased homes, a provision that would hit middle-class teachers or office workers looking to buy starter houses in high-priced, economically vibrant areas such as New York City and Silicon Valley.

One of the bill’s biggest lifts to working families would vanish after five years — though Republicans would certainly push to extend it — and another would be diluted by the bill’s changes to how the tax code calculates inflation.

[charmander 692]

I found this calculator page you can run your numbers to compare what the new plan would bring or take away from you.It's simple but not perfect since you cannot break down your itemize deductions, new plan has new limits on mortgage interest and state property taxes but nevertheless that's a starting point.

 

Please share if you find a better calculator.

[JimandChristy 1,689]

Trump should call his new Tax Bill the "Cut Cut Cut Plan" (CCCP for short)

[Cyberfx1024 7,978]

16 minutes ago, JimandChristy said:

Trump should call his new Tax Bill the "Cut Cut Cut Plan" (CCCP for short)

Yeah like I am getting $40 back in my pocket a month because my healthcare plan is actually LOWERING this year a whooping $40 a month or $20 a paycheck after almost 10% increases the last every year the last 5 years.

 

#MAGA

Edited November 3, 2017 by cyberfx1024

[CaliCat 3,957]

4 minutes ago, cyberfx1024 said:

Yeah like I am getting $40 back in my pocket a month because my healthcare plan is actually LOWERING this year a whooping $40 a month or $20 a paycheck after almost 10% increases the last every year the last 5 years.

 

#MAGA

 

Enjoy the lower premiums while they last. The new tax cut plan will eat into any savings. 

 

https://www.nytimes.com/2017/11/02/us/politics/republican-tax-plan-winners-losers.html

Winner: Multinational corporations

American multinational companies fare well under the plan, which calls for shifting toward a more territorial tax system, albeit with caveats. The plan levies a 10 percent global minimum tax on overseas earnings, but that’s still far below the current 35 percent they need to pay on income that’s returned home. In theory, the new system will reduce the “lockout” effect that encourages firms to stash cash abroad.

The plan would also force companies to pay a one-time 12 percent tax on “liquid” assets that are held overseas, like cash. They would have eight years to pay the tax.

Winner: Some middle class families

The Republican tax plan would collapse the income tax brackets to three from seven and nearly double the standard deduction, meaning many middle class families would see smaller tax bills. However, this impact will vary depending on every taxpayer’s individual situation. People who live in high-tax states and currently itemize their tax returns could pay more because of the limitations on the state and local tax deduction.

The capping of the mortgage interest deduction could also impact middle class families who live in states with high property taxes. And, if the legislation dampens home prices, as realtors are warning, it could diminish the wealth of middle class families whose biggest investment is generally their home.

Winner: The rich and their families

Despite all of the talk about helping the middle class, it is hard to argue that the wealthy do not benefit from the tax plan. The top tax rate for millionaires holds steady at 39.6 percent, while the estate tax and the alternative minimum tax or A.M.T. — which hit primarily wealthy Americans — are ultimately eliminated. Mr. Trump, a billionaire, has criticized the “death tax” and the A.M.T. provisions over the years as unfair.

Winner: Hedge funds and other general partners

President Trump campaigned on getting rid of the so-called carried interest loophole, which allows fees paid to some of the richest people on Wall Street to be taxed at low capital gains rates, not income tax rates. But it makes no appearance in the House plan.

 

Loser: The real estate industry

The tax plan doubles the standard deduction and caps the mortgage interest deduction at $500,000, down from $1 million. It also caps property deductions at $10,000. This significantly weakens a tax incentive that has encouraged many Americans to buy homes rather than rent. Homebuilders and realtors quickly came out against the bill, warning that it could create a recession in the housing market and cause a slide in home prices.

Loser: The sick

Under the Republican plan, the deduction for medical expenses would be eliminated. This currently applies to taxpayers, spouses or other dependents with health expenses that exceed a tenth of the taxpayer’s income. AARP, which advocates for retirees, said that they strongly opposed the repeal of the deduction and said that doing so would impose a “health tax” on the oldest and sickest Americans.

Loser: Charities.

Like the housing industry, charities are also fretting about the impact of doubling the standard deduction. While charitable deductions are preserved in the plan, middle class families that take advantage of the larger standard deduction could be less likely to give to charity as a way of reducing their taxable income. This, in turn, could mean less giving.

Loser: University endowments

Currently, private universities are exempt from the tax that private foundations pay on their investment income. That would change under the Republican plan, which would levy a 1.4 percent excise tax on private colleges and universities with at least 500 students and assets that are valued at $100,000 per full-time student. The plan will likely draw strong opposition from the higher education community. It would raise $3 billion in revenue over a decade.

Loser: Rare disease sufferers

The tax plan calls for the repeal of a tax credit that drug companies use to perform clinical testing for drugs that treat rare diseases. The credit is central to the business model for such firms and eliminating it could mean that big pharmaceutical companies will have little reason to invest in drugs that help small patient populations.

Loser: The deficit

Republicans used to consider themselves deficit hawks, but their plan will add at least $1.5 trillion to the federal debt over a decade. Many economists think that it will be more than this, because Republican tax-writers are using optimistic assumptions about economic growth when assessing their plan. If deficits continue to swell, it would depress economic growth and lawmakers would likely have to consider raising taxes or cutting spending to compensate as an aging population puts pressure on federal entitlement programs like Social Security and Medicare.

Loser: Tesla (and electric car owners)

The Republican plan repeals the tax credit currently allowed for taxpayers who own a “qualified plug-in electric-drive motor vehicle.” Under current law, a taxpayer may claim a maximum credit of $7,500 for each qualified plug-in electric-drive motor vehicle placed in service. The bill would take that benefit away.

[Amica Nostra 4,803]

17 minutes ago, CaliCat said:

 

Enjoy the lower premiums while they last. The new tax cut plan will eat into any savings. 

 

https://www.nytimes.com/2017/11/02/us/politics/republican-tax-plan-winners-losers.html

Winner: Multinational corporations

American multinational companies fare well under the plan, which calls for shifting toward a more territorial tax system, albeit with caveats. The plan levies a 10 percent global minimum tax on overseas earnings, but that’s still far below the current 35 percent they need to pay on income that’s returned home. In theory, the new system will reduce the “lockout” effect that encourages firms to stash cash abroad.

The plan would also force companies to pay a one-time 12 percent tax on “liquid” assets that are held overseas, like cash. They would have eight years to pay the tax.

Winner: Some middle class families

The Republican tax plan would collapse the income tax brackets to three from seven and nearly double the standard deduction, meaning many middle class families would see smaller tax bills. However, this impact will vary depending on every taxpayer’s individual situation. People who live in high-tax states and currently itemize their tax returns could pay more because of the limitations on the state and local tax deduction.

The capping of the mortgage interest deduction could also impact middle class families who live in states with high property taxes. And, if the legislation dampens home prices, as realtors are warning, it could diminish the wealth of middle class families whose biggest investment is generally their home.

Winner: The rich and their families

Despite all of the talk about helping the middle class, it is hard to argue that the wealthy do not benefit from the tax plan. The top tax rate for millionaires holds steady at 39.6 percent, while the estate tax and the alternative minimum tax or A.M.T. — which hit primarily wealthy Americans — are ultimately eliminated. Mr. Trump, a billionaire, has criticized the “death tax” and the A.M.T. provisions over the years as unfair.

Winner: Hedge funds and other general partners

President Trump campaigned on getting rid of the so-called carried interest loophole, which allows fees paid to some of the richest people on Wall Street to be taxed at low capital gains rates, not income tax rates. But it makes no appearance in the House plan.

 

Loser: The real estate industry

The tax plan doubles the standard deduction and caps the mortgage interest deduction at $500,000, down from $1 million. It also caps property deductions at $10,000. This significantly weakens a tax incentive that has encouraged many Americans to buy homes rather than rent. Homebuilders and realtors quickly came out against the bill, warning that it could create a recession in the housing market and cause a slide in home prices.

Loser: The sick

Under the Republican plan, the deduction for medical expenses would be eliminated. This currently applies to taxpayers, spouses or other dependents with health expenses that exceed a tenth of the taxpayer’s income. AARP, which advocates for retirees, said that they strongly opposed the repeal of the deduction and said that doing so would impose a “health tax” on the oldest and sickest Americans.

Loser: Charities.

Like the housing industry, charities are also fretting about the impact of doubling the standard deduction. While charitable deductions are preserved in the plan, middle class families that take advantage of the larger standard deduction could be less likely to give to charity as a way of reducing their taxable income. This, in turn, could mean less giving.

Loser: University endowments

Currently, private universities are exempt from the tax that private foundations pay on their investment income. That would change under the Republican plan, which would levy a 1.4 percent excise tax on private colleges and universities with at least 500 students and assets that are valued at $100,000 per full-time student. The plan will likely draw strong opposition from the higher education community. It would raise $3 billion in revenue over a decade.

Loser: Rare disease sufferers

The tax plan calls for the repeal of a tax credit that drug companies use to perform clinical testing for drugs that treat rare diseases. The credit is central to the business model for such firms and eliminating it could mean that big pharmaceutical companies will have little reason to invest in drugs that help small patient populations.

Loser: The deficit

Republicans used to consider themselves deficit hawks, but their plan will add at least $1.5 trillion to the federal debt over a decade. Many economists think that it will be more than this, because Republican tax-writers are using optimistic assumptions about economic growth when assessing their plan. If deficits continue to swell, it would depress economic growth and lawmakers would likely have to consider raising taxes or cutting spending to compensate as an aging population puts pressure on federal entitlement programs like Social Security and Medicare.

Loser: Tesla (and electric car owners)

The Republican plan repeals the tax credit currently allowed for taxpayers who own a “qualified plug-in electric-drive motor vehicle.” Under current law, a taxpayer may claim a maximum credit of $7,500 for each qualified plug-in electric-drive motor vehicle placed in service. The bill would take that benefit away.

1.5 Trillion over 10 years and not a dime to improve infrastructure

[Steeleballz 7,550]

1 hour ago, cyberfx1024 said:

Yeah like I am getting $40 back in my pocket a month because my healthcare plan is actually LOWERING this year a whooping $40 a month or $20 a paycheck after almost 10% increases the last every year the last 5 years.

 

#MAGA

 

   So your group health plan premiums have been reduced? That's nice, but what does that have to do with the currently proposed tax plan? 

[Steeleballz 7,550]

1 hour ago, CaliCat said:

Loser: The deficit

Republicans used to consider themselves deficit hawks, but their plan will add at least $1.5 trillion to the federal debt over a decade. Many economists think that it will be more than this, because Republican tax-writers are using optimistic assumptions about economic growth when assessing their plan. If deficits continue to swell, it would depress economic growth and lawmakers would likely have to consider raising taxes or cutting spending to compensate as an aging population puts pressure on federal entitlement programs like Social Security and Medicare.

 

    Republicans used to pretend to be deficit hawks is a more correct way of putting it. 

 

1 hour ago, JimandChristy said:

Trump should call his new Tax Bill the "Cut Cut Cut Plan" (CCCP for short)

   

    You were close. 

 

     CCCP

[charmander 692]

23 minutes ago, Steeleballz said:

     CCCP

This CCCP?