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Thread: How the GOP tax plan hurts many

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    Educator Rich123's Avatar
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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by beerftw View Post
    Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
    If the dependent live at home is 19 years old or younger you can claim them as a dependent for the personal exemption credit . If the dependent is younger than 26 years old and a college student you can claim them as a dependent for the Personal exemption credit under all tax years but not in the GOP tax plan.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by beerftw View Post
    Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
    Not only that, since when are progressives angry about tax increases for middle class and wealthy people? Over the past few weeks, all I hear in the media are examples such as: "A family making $74,000 will only save about $150 per month"! As if having an $1800 at the end of the year is a BAD thing! That's been the basic progressive line for 3 weeks, either "it's only a tax cut for the rich", or "lower income and middle class folks won't get a huge amount of money back". It's funny how inconsistent the claims have been!

    But one thing we know is VERY consistent: when democrats in states like mine, raise everyone's property taxes by 35% all at once just 2 years ago, after allowing our power company to raise rates 50% all at once in 2007, just before the recession, NOBODY in the local media bitched about it, nor did local progressives for the most part! When dems raise taxes, fees, energy costs for everyone in blue states like Ca and NY, making it MUCH more expensive for the lower middle class and poor to get by, normally progressives are fully supportive, don't complain, and look the other way.

    So forgive me if, A). I don't accept this as true, and B). I don't believe the feigned outrage.
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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by beerftw View Post
    Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
    The bigger question is why how or upon who one later spends their income matters at all. The income tax should apply equally based on income alone. Even the "standard" deduction is not standard - it varies based on whether the filer is married and is optional if you can exceed it with other deductions, again, based on how and upon who the income was later spent.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Educator Rich123's Avatar
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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by cpwill View Post
    Apparently he's hinging this on the large number of American's whose only dependents are older than 17 but younger than 18, and claiming that they count under current rules, but not under new ones?

    No idea where he's counting the 18 year old, however, unless he is assuming he's in college, in which case they can claim some pretty major college deductions, and aren't likely to be using the standard.
    The purpose of this scenario is to demonstrate how the Personal exemption plays a huge role in many families Taxes . Consider this, the tax plan is a ten year program. How many families children will be over 17 during the life of this GOP tax plan. In order to be eligible for the CHILD TAX credit which the GOP plan raises from $1,000.00 to $2000.00 per child, the child must be under 17. The CHILD TAX CREDIT is the only other instrument available to off set your total taxes when you choose not to ITEMIZE. The personal exemption has been eliminated by the GOP tax plan. But in 2018 before the GOP tax plan the Personal EXEMPTION would have been $4150.00 per dependent and the tax filer. A dependent is qualified as a dependent if you support them and are under 19 for a non student and are under 26 for a college student. In my scenario The head of house hold,wife and two children all get the credit thus reducing their gross by $16,600 for the exemption alone. Plus they get and additional $13,000 for the standard deduction so the two together reduces their original gross of $60,000 by $29,600 leaving only $30,400.00 of taxable income.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by JMR View Post
    Please elaborate on the college deductions. I am under the impression that they have been eliminated.
    GOP Tax Bill: What Will Change for Students | Money
    Yes I think your right under the GOP plan but I was comparing what would have been 2018 taxes to the GOP tax plan. In 2018 I was referencing a deduction called the Personal Exemption which applies to the head of house hold, wife and children who are considered dependent by tax code guide lines of which their age must be under 19 for a non student and 26 for a student. The GOP plan eliminated the personal exemption, thus this was the purpose of the comparison. In 2018 the personal Exemption credit was $4150 per eligible person in the house hold. This scenario had four eligible person thus they can claim a deduction of $16,600.00 for this credit alone. Not chump change. Consider this, this credit definitely applies to a lot of families. The GOP plan raised the Child Tax Credit from $1,000.00 to $2,000.00 per child under the age of 17. The GOP boasted how this increase would off set the elimination of the personal exemption when coupled with the GOP plan to increase the Standard Deduction from $13,000.00 to $24,000.00. Indeed it does. But once the child is over 17 the child tax credit no longer applies . This is a ten year plan,many who can use the child tax credit now will loose that benefit but the personal exemption would always apply for the husband and wife and until 19 or 26 for dependent children . The math in my scenario shows that the GOP plan comes up short when the Child Tax credit no longer applies.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by cpwill View Post
    Entertainingly, your own link does not say that, and would answer your questions had you bothered to read it.
    I think JMR was referring to the elimination of the Interest on College loans. I'm not 100% sure as of this posting but I think the GOP plan does eliminate the interest deduction.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by code1211 View Post
    https://townhall.com/tipsheet/guyben...icans-n2424201

    <snip>
    The average tax cut will be $1,600, according to TPC's data

    (Republicans cite a different statistic: A tax cut of more than $2,000 for a median income family of four).

    Let those numbers marinate for a moment.

    We've been caught in a blizzard of misinformation claiming that this bill hurts the middle class.

    But even the Republican-hostile Tax Policy Center couldn't escape the empirical conclusion that 80 percent of all Americans will see their taxes reduced under the bill
    <snip>
    I've run many scenarios and depending on the tax circumstances of the Tax filer I have found that some will improve their returns but just as many wont. My scenario is totally fair since many people have two children home who are for tax purposes dependents and are over 17 years of age. Clearly this scenario leaves the GOP plan short.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by HowardBThiname View Post
    Fuzzy math there, dude.

    You forgot to factor in the drop in the federal tax rate from 15% to 12%.

    Your example family, under the existing plan would pay $4,665.
    Under the GOP plan, they will pay $4,320.
    That's a savings of $345.

    Not a huge savings, grant you, but still a savings.

    60,000 minus the old standard deduction plus exemptions equals $28,900, and when taxed at 15% that is a payment due of $4,665.

    60,000 minus the new standard of $24,000 (and no exemptions) leaves us with $36,000, and when taxed at the new rate of only 12%, the payment due is $4,320.

    And, that's just for a family of four with two kids over 17. If the two kids were younger, the parents would get an additional $4,000 child care credit.

    At any rate -- don't quit your day job and become either a mathematician or a paid tax preparer.
    Well that's not how taxes are computed. I grant you that the GOP plan is at 12% a fact I didn't know when I did the computation. But here is how it is done.

    2018 tax year

    $60,000 minus standard deduction of #13,000.00 for 2018 equals $47,000.00
    $47,000 minus Personal exemption of $4150 times four dependents , equals $47000 minus $16,600.00 equals $30400 AGI

    $30,400.00 AGI put one in the 15% tax bracket for 2018

    Thus the first zero to $19050 is subject to 10% which equals $1905
    Then you subtract $19050.00 from $30,400.00 which equals $11,350.00 which is the amount that is subject to 15%
    so .15 times $11,350.00 equals $1702.50
    Finally you add the ten percent rate to the fifteen percent rate as follows $1905.00 plus $1702.50 which equals a total tax of $3607.50

    That's how you compute taxes

    Now the GOP plan

    $60,000.00 minus standard deduction of $24,000.00 equals $36,000.00

    There are no other credits to take now so this puts us in the 12% tax bracket in the GOP plan.

    from Zero to $9525 tax is computed at 10% which equals $952,50
    Then from $9525 to $36000 is a difference of $26,475.00 that get taxed at the 12% rate which equals $3177.00
    Add the two results for a final tax ,thus $3177.00 plus $952.50 equals $4129.50

    So the 2018 tax was $3607.50 and the GOP tax was $4129.50 a difference of $522.00

    Not what I previously reported and I should have corrected my error. But it's not me who should not quit his day job.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by Rich123 View Post
    Well that's not how taxes are computed. I grant you that the GOP plan is at 12% a fact I didn't know when I did the computation. But here is how it is done.

    2018 tax year

    $60,000 minus standard deduction of #13,000.00 for 2018 equals $47,000.00
    $47,000 minus Personal exemption of $4150 times four dependents , equals $47000 minus $16,600.00 equals $30400 AGI

    $30,400.00 AGI put one in the 15% tax bracket for 2018

    Thus the first zero to $19050 is subject to 10% which equals $1905
    Then you subtract $19050.00 from $30,400.00 which equals $11,350.00 which is the amount that is subject to 15%
    so .15 times $11,350.00 equals $1702.50
    Finally you add the ten percent rate to the fifteen percent rate as follows $1905.00 plus $1702.50 which equals a total tax of $3607.50

    That's how you compute taxes

    Now the GOP plan

    $60,000.00 minus standard deduction of $24,000.00 equals $36,000.00

    There are no other credits to take now so this puts us in the 12% tax bracket in the GOP plan.

    from Zero to $9525 tax is computed at 10% which equals $952,50
    Then from $9525 to $36000 is a difference of $26,475.00 that get taxed at the 12% rate which equals $3177.00
    Add the two results for a final tax ,thus $3177.00 plus $952.50 equals $4129.50

    So the 2018 tax was $3607.50 and the GOP tax was $4129.50 a difference of $522.00

    Not what I previously reported and I should have corrected my error. But it's not me who should not quit his day job.
    That's the individual bracket. The married filing jointly is still up to 19,050 for 10%, the same as your first example.

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    Re: How the GOP tax plan hurts many

    Quote Originally Posted by JMR View Post
    Sorry, my bad. I knew they had been on the chopping block, glad they were saved. My situation still ends up a substantial tax increase, so I'm not seeing a lot of good side to this bill. I know Donald says we are all gonna be so happy to see so much money in our checks in February. Maybe not as happy as he will be however.
    You surely wont be as happy as Donald J.Trump. The elimination of the Alternative Minimum Tax according to David Cay Johnston has benefited Trump as follows .
    David Cay Johnston received two or three pages of Trump's 2005 tax return anonymously. As Mr. Johnston is a corporate tax accountant he is able to determine that with the elimination of the Alternative Minimum Tax law Donald J Trump's return without the AMT would pay $7,000,000.00 on a $150,000,000.00 profit. With the AMT in place he would have paid $38,000,000.00.

    Another point :The GOP plan eliminates State and Local income taxes as a deduction. But Real Estate Investment corporations are considered a (PASS THROUGH COMPANY) by the IRS. A pass through company has NO TAX LIABILITY levied on the company. Instead the taxes are paid when the owners take a share of the profit. Thus the tax payer is the owner of the company when the owner takes a share of the profit. So the portion of the owners profit that is taxed by the STATE AND LOCAL MUNICIPALITY is taxed as PROFIT,NOT WAGES and as such gets around the the GOP rule of ELIMINATING STATE AND LOCAL TAXES AS A TAX DEDUCTION. So you loose the deduction but TRUMP KEEPS IT. But Trump tells you "THIS PLAN HURTS ME....BELIEVE ME>>>>BELIEVE ME.

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