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Thread: I don't believe the Tax plan will save you what you think it will.

  1. #31
    Educator Rich123's Avatar
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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Rich123 View Post
    I'm not sure what you think I should walk back.
    For some reason every time I try to reply to Lutherf my response goes into cyber space. I will post my response to him here.

    Lutherf, you are partially correct with your numbers. It's not a 100% reduction by your given scenario.

    the 2016 filer owes $1753.00
    the GOP filer owes $47.50 as his before child tax bill was $4447.50.

    Your scenario was not realistic since it would be fairer to compare a 2018 filer to a GOP filer, since without the GOP bill everyone would be filing in 2018. I would also to give a slightly different scenario for the filers familiar situation. They both have two children but over 17 years of age. This is just as fair as your scenario I think.

    I could go over the math and deductions with you and will if you ask me too but for now here are the results..
    In this scenario the GOP filer would owe $4447.50

    The 2018 filer would owe $3607.50

    Thereby not saving the GOP filer anything and instead raising his taxes by $840.00

    You see the elimination of the Personal exemption really hurts many and if you don't have children under 17 your screwed by this plan.

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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Lutherf View Post
    "Society getting less"....sheesh. If people still have their money then it's already in society. Your concern seems to be more along the lines of government no longer being allowed to determine how much a given individual is allowed to have.
    I'll be paying more under the tax hike plan. So I wish the government would be allowed to let me keep what I kept in the past.

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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Lutherf View Post
    Like I've said before, for some people nothing the Republicans or Trump does to help them will be enough. In the scenario I posted the family would get a 100% reduction in federal income tax but, still, there is room for you to complain.
    Just a question, how does your scenario work out?

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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by JMR View Post
    Just a question, how does your scenario work out?
    I don't know yet. I'm still working through the stuff related to pass throughs and whether SE tax is being imposed on income from S Corps. It's looking like I'm going to come out ahead either way but by how much is still in question.

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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Lutherf View Post
    I don't know yet. I'm still working through the stuff related to pass throughs and whether SE tax is being imposed on income from S Corps. It's looking like I'm going to come out ahead either way but by how much is still in question.
    Mazel Tov! If only that were true all around.

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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Lutherf View Post
    I just ran some numbers for a married couple, no itemizing, with 2 kids under the age of 17 making $60k. Under 2016 rules they would pay roughly $1750 tax. Under 2018 rules they would owe $3940 BUT they would also get a child tax credit of $4k thus reducing their tax to zero (possibly a small refund). That's a HUGE change to the good for them and fits in pretty squarely with the statements we've heard from proponents of the bill.
    Very likely to be break even after healthcare premiums go up approx. 10%
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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Lutherf View Post
    Like I've said before, for some people nothing the Republicans or Trump does to help them will be enough. In the scenario I posted the family would get a 100% reduction in federal income tax but, still, there is room for you to complain.
    Same goes for some conservatives - nothing the dems do is good enough. Your point??
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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Rich123 View Post
    For some reason every time I try to reply to Lutherf my response goes into cyber space. I will post my response to him here.

    Lutherf, you are partially correct with your numbers. It's not a 100% reduction by your given scenario.

    the 2016 filer owes $1753.00
    the GOP filer owes $47.50 as his before child tax bill was $4447.50.

    Your scenario was not realistic since it would be fairer to compare a 2018 filer to a GOP filer, since without the GOP bill everyone would be filing in 2018. I would also to give a slightly different scenario for the filers familiar situation. They both have two children but over 17 years of age. This is just as fair as your scenario I think.

    I could go over the math and deductions with you and will if you ask me too but for now here are the results..
    In this scenario the GOP filer would owe $4447.50

    The 2018 filer would owe $3607.50

    Thereby not saving the GOP filer anything and instead raising his taxes by $840.00

    You see the elimination of the Personal exemption really hurts many and if you don't have children under 17 your screwed by this plan.
    LutherF I have to make a correction to my numbers.
    My 2018 numbers were spot on.
    My GOP Numbers were off
    GOP Plan
    $60,000.00 minus $24,000 equals $36000
    ten percent bracket is zero to $19050 equals $1905
    $19050 subtracted from $36,000 equals $16950 times 12% equals $2034.00 plus $1905 equals $3939.00 for a final tax on a family of four two children over 17 making $60,000 under the GOP plan

    Take $3939.00 from $3607.50 and the 2018 plan saves the tax payer $331.50

    So you see the GOP decision to eliminate the Personal deduction hurts many who can't claim the CHILD TAX CREDIT

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    Re: I don't believe the Tax plan will save you what you think it will.

    Quote Originally Posted by Lutherf View Post
    Like I've said before, for some people nothing the Republicans or Trump does to help them will be enough. In the scenario I posted the family would get a 100% reduction in federal income tax but, still, there is room for you to complain.


    You cannot hold up one very specific hypothetical, where you're ignoring dozens of parameters, and on that basis proclaim this law is a win.

    E.g. all one has to do is place your hypothetical family to New York State, and they will lose much of those gains -- as deductions for state and local taxes are dramatically curtailed.

    Meanwhile, most of the law? Yeah, it doesn't help them. A family earning $60k is not helped by raising the threshold on AMT; or by creating tons of loopholes for people who can set up a pass-through for their income; or by raising the threshold on estate taxes; or by keeping the carried interest loophole (I wonder how that one survived...), and so on.


    The idea that only one side is partisan here is laughable. We spent 8 years where Obama could have said "2+2=4" in a speech, and Republicans would have vehemently disagreed with his "Socialist math."

    There was a lot of potential room for compromise and bipartisan input on this tax bill. Democrats have said for some time, for example, that they were willing to clean up and simplify the corporate tax code. Instead, the Republicans did an end-run around their own demands for regular order, objections over bills that shut out the opposition, objections over bills where those voting on it didn't know what was in it, and years of fear-mongering about the deficits. They passed the law via irregular means, deliberately shutting out Democrats, refusing to hold any public hearings, making hand-written changes at the last minute, not fully knowing what they passed or its effects, knowing full well it will balloon the deficit (and potentially using this as an excuse to cut Social Security, Medicare, Medicaid and other programs).

    Working with Democrats also would have made the law more sustainable, more likely to stick over time. Now that the norms have been shattered, all that's needed is a Democratic President, plus a majority of Democrats in Congress, for a grand total of 2 months, and all those tax laws can be changed again. I wonder how you'd react to a Democratic-only tax bill in 2020....
    "Everyone should listen to me all the time about everything."
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    Re: I don't believe the Tax plan will save you what you think it will.

    I disagree with the thread's author. I am a working businessman and I always make taxation plan for different periods of time. It's necessary beacause otherwise it's difficult to predict the influence of this factor on the general profit. Of course I don't calculate taxes manually, I do that with the help of this site TaxForm.io . But I do it regularly and my accountant always keeps his finger on a pulse.

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