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

Rich123

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I have searched the tax brackets for 2017 and 2018 and assumed a married couple filing jointly with a gross income of $40,000.00. Then I took that result and applied the CNN tax plan calculator to those results. AS the CNN tax plan calculator doesn't factor itemized deductions neither did I assume any. Here are my numbers

In 2017 a married couple filing jointly with a gross salary of $40,000.00 would be in the 15% bracket.

The first $13,350.00 of earnings in that bracket is subject to a 10% tax resulting in a partial tax of $1335.00
Then $13,350.00 is deducted from your total gross of $40,000.00 = $26,650.00 is taxed at 15% which equals $3997.50
The final tax is computed by adding $1,335.00 the 10% rate and $39997.50 the 15% rate which equals a total tax of $5347.50

In 2018 a married couple filing jointly with a gross of $40,000.00 and no deductions computes as follows.

$40,000.00 again puts a married couple in the 15% bracket but the numbers are a little different.
The first $13,600.00 is subject to 10% which results in a partial tax of $1,360.00
$40,000.00 minus $13600.00 equals $26,400.00 subject to 15% which equals $3,960.00
$3,960.00 plus $1,360.00 results in a total tax of $5,320.00

Take $5,320.00 from $5347.50 and that equals the difference between 2017 and 2018 and that is $27.50

Now if you apply the CNN tax plan calculator for the same scenario as above the calculator says a married couple filing jointly with a gross earnings of $40,000.00 you get a savings of .5%

.5% has a decimal equivalent of .05
.05 times the taxes for 2018 equals .05 times $5320.00 which equals $266.00 plus the savings from 2017 of $27.50 equals a total savings of $293.50 per year.
So for some to claim they will save $2900.00 they have to factor the ten year tax plan.

Of course I realize my scenario does use itemized deductions but CNN tax calculator doesn't allow it .
I
 
I have searched the tax brackets for 2017 and 2018 and assumed a married couple filing jointly with a gross income of $40,000.00. Then I took that result and applied the CNN tax plan calculator to those results. AS the CNN tax plan calculator doesn't factor itemized deductions neither did I assume any. Here are my numbers

In 2017 a married couple filing jointly with a gross salary of $40,000.00 would be in the 15% bracket.

The first $13,350.00 of earnings in that bracket is subject to a 10% tax resulting in a partial tax of $1335.00
Then $13,350.00 is deducted from your total gross of $40,000.00 = $26,650.00 is taxed at 15% which equals $3997.50
The final tax is computed by adding $1,335.00 the 10% rate and $39997.50 the 15% rate which equals a total tax of $5347.50

In 2018 a married couple filing jointly with a gross of $40,000.00 and no deductions computes as follows.

$40,000.00 again puts a married couple in the 15% bracket but the numbers are a little different.
The first $13,600.00 is subject to 10% which results in a partial tax of $1,360.00
$40,000.00 minus $13600.00 equals $26,400.00 subject to 15% which equals $3,960.00
$3,960.00 plus $1,360.00 results in a total tax of $5,320.00

Take $5,320.00 from $5347.50 and that equals the difference between 2017 and 2018 and that is $27.50

Now if you apply the CNN tax plan calculator for the same scenario as above the calculator says a married couple filing jointly with a gross earnings of $40,000.00 you get a savings of .5%

.5% has a decimal equivalent of .05
.05 times the taxes for 2018 equals .05 times $5320.00 which equals $266.00 plus the savings from 2017 of $27.50 equals a total savings of $293.50 per year.
So for some to claim they will save $2900.00 they have to factor the ten year tax plan.

Of course I realize my scenario does use itemized deductions but CNN tax calculator doesn't allow it .
I

I'm not a tax doctor, but if you aren't itemizing, shouldn't you account for the standard deductions, rather than scoring gross income as though they did not exist?
 
I have searched the tax brackets for 2017 and 2018 and assumed a married couple filing jointly with a gross income of $40,000.00. Then I took that result and applied the CNN tax plan calculator to those results. AS the CNN tax plan calculator doesn't factor itemized deductions neither did I assume any. Here are my numbers

In 2017 a married couple filing jointly with a gross salary of $40,000.00 would be in the 15% bracket.

The first $13,350.00 of earnings in that bracket is subject to a 10% tax resulting in a partial tax of $1335.00
Then $13,350.00 is deducted from your total gross of $40,000.00 = $26,650.00 is taxed at 15% which equals $3997.50
The final tax is computed by adding $1,335.00 the 10% rate and $39997.50 the 15% rate which equals a total tax of $5347.50

In 2018 a married couple filing jointly with a gross of $40,000.00 and no deductions computes as follows.

$40,000.00 again puts a married couple in the 15% bracket but the numbers are a little different.
The first $13,600.00 is subject to 10% which results in a partial tax of $1,360.00
$40,000.00 minus $13600.00 equals $26,400.00 subject to 15% which equals $3,960.00
$3,960.00 plus $1,360.00 results in a total tax of $5,320.00

Take $5,320.00 from $5347.50 and that equals the difference between 2017 and 2018 and that is $27.50

Now if you apply the CNN tax plan calculator for the same scenario as above the calculator says a married couple filing jointly with a gross earnings of $40,000.00 you get a savings of .5%

.5% has a decimal equivalent of .05
.05 times the taxes for 2018 equals .05 times $5320.00 which equals $266.00 plus the savings from 2017 of $27.50 equals a total savings of $293.50 per year.
So for some to claim they will save $2900.00 they have to factor the ten year tax plan.

Of course I realize my scenario does use itemized deductions but CNN tax calculator doesn't allow it .
I

Not even close.

Married couple with no kids and no itemizing makes $40k. 2016 rates give you a standard deduction of $12,600 and personal exemptions of $8,100 ($4,050 each). Taxable income is $19,300 ($40k less $20,700 in deductions). 10% bracket cutoff is $18,550 so you've got $1,856 tax plus 15% of the remaining $750 which is another $113 for total tax of $1,969.

TCJA tax calculation is $40k less $24k for taxable income of $16,000. The 10% bracket cuts off at $19,050 so all taxable income is 10% meaning you pay tax of $1,600. You save $369. That's roughly a 20% tax decrease.
 
CNN tax calculator

Um... I don't know if CNN would be a good place to source information about politically charged stories. That would be akin to trusting the Fox News analysis of, say, the ACA.
 
I'm not a tax doctor, but if you aren't itemizing, shouldn't you account for the standard deductions, rather than scoring gross income as though they did not exist?

Well I considered that fact as well. Since CNN presented the calculator which gave a result in terms of a persent of income,' made the assumption that the calculator adjusted for the standard deduction.
When one does their taxes you generally can choose the standard deduction or itemization.
The language put forth ' n CNN says there is no itemization.
But later today I had already planned to explore that possibility.
Thank you for thoughts.
 
Not even close.

Married couple with no kids and no itemizing makes $40k. 2016 rates give you a standard deduction of $12,600 and personal exemptions of $8,100 ($4,050 each). Taxable income is $19,300 ($40k less $20,700 in deductions). 10% bracket cutoff is $18,550 so you've got $1,856 tax plus 15% of the remaining $750 which is another $113 for total tax of $1,969.

TCJA tax calculation is $40k less $24k for taxable income of $16,000. The 10% bracket cuts off at $19,050 so all taxable income is 10% meaning you pay tax of $1,600. You save $369. That's roughly a 20% tax decrease.

O.k. that is exactly my point. You put savings at $369.00 I put it at $293.00 but without itemizing on my part with itemizing on your part. Either way it's not some $2000.00 to $3000.00 per year as some seem to think as evidenced by their post IMO. That 2k to 3k is over the life of the tax plan which is a ten year plan.
Thank you very much for your thoughts.
 
one calculator said that i'd save a grand or so. the other one said between 0 and $210. when you take into account what i'll probably lose when they go after Medicare and other programs, even several thousand dollars a year wouldn't be worth it. imagine the research that won't get funded, too. the NIH and NSF cover a lot of fundamental research. that research is the foundation that for profit scientific innovation builds its house on. for example, when creating a new drug or therapy, researchers rely heavily on fundamental research like you would use a roadmap to get from New York to LA. idiots like Trump and many in the GOP seem to think that scientific research is nothing more than a conspiracy to keep them from putting gasoline in their cars. this is just astounding to someone who has spent most of his career in public research. i lost that job after the stupid sequester bull****, and am now in industry. i know both sides of it and how it works. if they pare back public research even more, it won't work in the mid to long term. also, consider education. we'll be left in the dust by other countries that aren't led by panting fools.

so you got a couple grand? great. my advice is to save it. you'll need it.
 
O.k. that is exactly my point. You put savings at $369.00 I put it at $293.00 but without itemizing on my part with itemizing on your part. Either way it's not some $2000.00 to $3000.00 per year as some seem to think as evidenced by their post IMO. That 2k to 3k is over the life of the tax plan which is a ten year plan.
Thank you very much for your thoughts.

I didn’t include anything about itemizing and looking for a $2k tax cut for a couple that doesn’t even owe $2k is ridiculous. They get a 20% tax cut. Expecting a tax cut of 100% or more is unrealistic.
 
Not even close.

Married couple with no kids and no itemizing makes $40k. 2016 rates give you a standard deduction of $12,600 and personal exemptions of $8,100 ($4,050 each). Taxable income is $19,300 ($40k less $20,700 in deductions). 10% bracket cutoff is $18,550 so you've got $1,856 tax plus 15% of the remaining $750 which is another $113 for total tax of $1,969.

TCJA tax calculation is $40k less $24k for taxable income of $16,000. The 10% bracket cuts off at $19,050 so all taxable income is 10% meaning you pay tax of $1,600. You save $369. That's roughly a 20% tax decrease.

People who do not itemize will definitely be making out with the new plan. No question about that. And, the lower rates or higher threshold between rates (depending on how you want to look at it) can't hurt either.

Of course, paying less is not my bitch about the new plan. Society getting less is however.
 
People who do not itemize will definitely be making out with the new plan. No question about that. And, the lower rates or higher threshold between rates (depending on how you want to look at it) can't hurt either.

Of course, paying less is not my bitch about the new plan. Society getting less is however.

"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.
 
"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.

No, my concern is for the sick and the poor. Maybe I am just more into the real story of Jesus than the Christians of America are today. Could be.
 
No, my concern is for the sick and the poor. Maybe I am just more into the real story of Jesus than the Christians of America are today. Could be.

If your concern is for the sick and poor then feel free to help them. Nothing in this tax bill precludes you from donating to a food bank, taking a homeless person into your house, or providing comfort to the sick.
 
Um... I don't know if CNN would be a good place to source information about politically charged stories. That would be akin to trusting the Fox News analysis of, say, the ACA.

The Calculator they use is from conservative think tank sources if you read their intro.
 
one calculator said that i'd save a grand or so. the other one said between 0 and $210. when you take into account what i'll probably lose when they go after Medicare and other programs, even several thousand dollars a year wouldn't be worth it. imagine the research that won't get funded, too. the NIH and NSF cover a lot of fundamental research. that research is the foundation that for profit scientific innovation builds its house on. for example, when creating a new drug or therapy, researchers rely heavily on fundamental research like you would use a roadmap to get from New York to LA. idiots like Trump and many in the GOP seem to think that scientific research is nothing more than a conspiracy to keep them from putting gasoline in their cars. this is just astounding to someone who has spent most of his career in public research. i lost that job after the stupid sequester bull****, and am now in industry. i know both sides of it and how it works. if they pare back public research even more, it won't work in the mid to long term. also, consider education. we'll be left in the dust by other countries that aren't led by panting fools.

so you got a couple grand? great. my advice is to save it. you'll need it.

Well now your touching on a point that I was leading up to. Bottom line it wont be $2k or 3K per yerar. Paul Ryan is on record saying he wants to defund medicare and social security. The truth about a Christmas gift for America is absolutely true, if your one of the Koch brothers.
 
I didn’t include anything about itemizing and looking for a $2k tax cut for a couple that doesn’t even owe $2k is ridiculous. They get a 20% tax cut. Expecting a tax cut of 100% or more is unrealistic.

I didn't say you itemized. You use the standard deductions. And again the point I was working up to is people do seem to be under the impression that they would be getting 2k to 3k . I also feel this was unrealistic and that is why I ventured into this subject. But you can not blame people for believing this since this is what I have heard certain republican politician say. They can say this and be correct because it's over a ten year period. But those politicians wont say it's over a ten year period, they don't say that and let the listener believe it's an annual benefit. The truth is, all the assumptions so far about this bill are just that, assumptions. But it would not be folly to assume that our president and his family would benefit highly from this bill. Again,trickle down doesn't really trickle so well.
 
Well now your touching on a point that I was leading up to. Bottom line it wont be $2k or 3K per yerar. Paul Ryan is on record saying he wants to defund medicare and social security. The truth about a Christmas gift for America is absolutely true, if your one of the Koch brothers.

it isn't a Christmas gift for the vast majority in the mid to long term. short term, it will act like a delivery of coke to the poker table. then a crash will probably follow, as is usually the case with this kind of thing.
 
People who do not itemize will definitely be making out with the new plan. No question about that. And, the lower rates or higher threshold between rates (depending on how you want to look at it) can't hurt either.

Of course, paying less is not my bitch about the new plan. Society getting less is however.

Maybe some will benefit marginally. But the claims made by by the authors of the bill are only true if one knows that the two grand savings they tout is over ten years. But those authors don't say that which can lead some to believe it's an annual savings.
 
"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.

Sorry sir, I don't understand your point.
 
No, my concern is for the sick and the poor. Maybe I am just more into the real story of Jesus than the Christians of America are today. Could be.

Well calamity, I'm with you. Jesus said; "What you do for the least of thee, you do for me also."
 
If your concern is for the sick and poor then feel free to help them. Nothing in this tax bill precludes you from donating to a food bank, taking a homeless person into your house, or providing comfort to the sick.

Absolute Lutherf, But since we are a Christian natioin, shouldn't we as a nation do as Jesus would have us do?
 
Tax Policy Center has a more thorough analysis.

Their estimated average is $1600 per household. Most people will get very little. It's the top 5% that will make out like bandits. And that's based on percentage, not absolute numbers.

Note that with the current bill, many tax changes expire in 2025 -- but not all. Many of the breaks for the rich will continue after that date. Hence the multiple years in the chart. Surprise!

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If your concern is for the sick and poor then feel free to help them. Nothing in this tax bill precludes you from donating to a food bank, taking a homeless person into your house, or providing comfort to the sick.

So, in reality the RW Christians aren't really Christians. Yes, I know.
 
I didn't say you itemized. You use the standard deductions. And again the point I was working up to is people do seem to be under the impression that they would be getting 2k to 3k . I also feel this was unrealistic and that is why I ventured into this subject. But you can not blame people for believing this since this is what I have heard certain republican politician say. They can say this and be correct because it's over a ten year period. But those politicians wont say it's over a ten year period, they don't say that and let the listener believe it's an annual benefit. The truth is, all the assumptions so far about this bill are just that, assumptions. But it would not be folly to assume that our president and his family would benefit highly from this bill. Again,trickle down doesn't really trickle so well.

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.
 
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.

Thank you for your input Lutherf. I' will run the numbers later this evening or tomorrow. But it seems to me that to say that American's will save Two thousand dollars as the republican authors did claim, without qualifying that statement with how long it will take to accomplish that savings is technically true but it is not the whole truth, is it? It's missleading in order to sell the package. I'll get back to you about the above referenced scenario.
 
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.
Wow, you've just described the entire nation's situation!

Oh, wait, you haven't. Millions of Americans are single; millions don't have dependents; millions make more or less than $60k; millions usually itemize their taxes. This is why you need to look at broader analyses, like the TPC one I mentioned above.

Meanwhile, is $2000 huuuuuge for a family of four, making $60k? Not so much. It's better than $0, but it is not going to get them a lot of breathing room.

Let's say that both parents work, and are paid on a bi-weekly basis. If all of those savings are realized via withholding, then their paychecks will go up by about... $10 per check. Woah that's huuuuuge!

Or, not. It's around $166/month for the whole family. It's their cable and Internet bill. I suspect most Americans will barely notice it.
 
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