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How the GOP tax plan hurts many

cpwill said:
Entertainingly, your own link does not say that, and would answer your questions had you bothered to read it. :)
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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.
 
code1211 said:
https://townhall.com/tipsheet/guybe...uts-taxes-for80-percent-of-americans-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>
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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.
 
HowardBThiname said:
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.
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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.
 
Rich123 said:
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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That's the individual bracket. The married filing jointly is still up to 19,050 for 10%, the same as your first example.
 
JMR said:
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.
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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.
 
Crovax said:
Well doubling the standard deduction is pretty big for most people
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In many cases it will work out good for them.but for many they will be hurt by this plan. But any gains made by the increase in the standard deduction is heavily out weighed by the elimination of the :
Personal Exemption
Elimination of ailomony as a deduction
Elimination of Student loan interest as a deduction
Property tax deduction is capped at $10,000.00. I know average people who pay much more than that.
State and local income tax as a deduction is eliminated.
State sales tax are eliminated as a deduction

There is much more but I'll leave it here.
 
JMR said:
Who decided that property taxes over $10,000 (which we have to thank Susan Collins for that small concession) are excessive, but interest on mortgages of 750K should be deductible?
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There are places were average working people live that have real estate taxes that are much higher then Ten thousand dollars.
 
ModerationNow! said:
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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What is Feigned is the proposition that the GOP did this TAX PLAN for the American People. They did it for their Donors and for TRUMP. As far as progressives raising your electric rates I have a problem accepting that as a fact. That is to say that utilities are governed by not one or two or even three but many who all have to agree about the direction they want to move the utility. To say it was all progressive or conservatives who came to this conclusion is rediculous. Finally it is well known that Republicans play book is to RUN UP THE DEBT WHILE CRYING FISCAL RESTRAINT. Notice I didn't say conservatives. I said Republicans. They do this so they can look like SANTA CLAUSE TO THEIR BASE. REWARD THEIR DONOR and BLOW a hole in the BUdget so they can have an excuse to eliminate certain social programs like Social Security and Medicare and finally to force the democrats to raise taxes in order to fix the budget. Your anger may be justified but your wrath is misdirected.
 
holbritter said:
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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Yes inn 2018 not the GOP plan
In the GOP plan from zero to $9525 is taxed at 10%
then from $9525 to $38,700.00 is taxed at 12%
 
Rich123 said:
Yes inn 2018 not the GOP plan
In the GOP plan from zero to $9525 is taxed at 10%
then from $9525 to $38,700.00 is taxed at 12%
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Yes, for single individual. Not for a family of 4, like you used for the current tax brackets.

tax.JPG
 
Rich123 said:
In many cases it will work out good for them.but for many they will be hurt by this plan. But any gains made by the increase in the standard deduction is heavily out weighed by the elimination of the :
Personal Exemption
Elimination of ailomony as a deduction
Elimination of Student loan interest as a deduction
Property tax deduction is capped at $10,000.00. I know average people who pay much more than that.
State and local income tax as a deduction is eliminated.
State sales tax are eliminated as a deduction

There is much more but I'll leave it here.
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Well considering the average property tax is around $2100 I’m going to say that those are very unusual circumstances and if they are of average income and the own a house that is 3 to 5 times the average property value they should probably sell it.
 
Rich123 said:
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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If 80% of the people suffering under Obamacare had gotten a reduction in their bills, there would be no concern whatever about it.

I realize that comparing anything to an outright disaster is not really fair, but a vast government program compared to a vast government program seems fair.

Regarding dependents, was there a change in qualifying dependents from the old way to the new way based on the age of 17?
 
Rich123 said:
In many cases it will work out good for them.but for many they will be hurt by this plan. But any gains made by the increase in the standard deduction is heavily out weighed by the elimination of the :
Personal Exemption
Elimination of ailomony as a deduction
Elimination of Student loan interest as a deduction
Property tax deduction is capped at $10,000.00. I know average people who pay much more than that.
State and local income tax as a deduction is eliminated.
State sales tax are eliminated as a deduction

There is much more but I'll leave it here.
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couple of issues. The student loan interest deduction is still in. Even if was eliminated, you could only deduct up to $2500 in interest and only with income of 80k or less. The average is way less. In deducting state taxes, you had the option of deducting the sales tax or income tax. You could NEVER deduct both. You forgot to mention the expansion of deducting medical expenses.

Yes, it's going to hurt some in high tax states, but please stop spreading inaccurate information.
 
code1211 said:
If 80% of the people suffering under Obamacare had gotten a reduction in their bills, there would be no concern whatever about it.

I realize that comparing anything to an outright disaster is not really fair, but a vast government program compared to a vast government program seems fair.

Regarding dependents, was there a change in qualifying dependents from the old way to the new way based on the age of 17?
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No. What he's saying is that the part where it was pushed that the loss of personal exemption will be made up for by the increase in child tax credit is not true, which in a way he is correct. His math wrong though.
 
Crovax said:
Well doubling the standard deduction is pretty big for most people
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Yes but it's smoke and mirors. Hold out the BIG prize and don't talk or let the see the other hand which is deep into their wallets. Did any hear Mitch Mc Connell or Donald J Trump or any republican say they were eliminating the Personal Exemption? I doubt if anyone on this forum can say they did. But how many of you hear them brag about doubling the Standard Deduction. It's the Carbonaro Effect.:lol:
 
code1211 said:
If 80% of the people suffering under Obamacare had gotten a reduction in their bills, there would be no concern whatever about it.

I realize that comparing anything to an outright disaster is not really fair, but a vast government program compared to a vast government program seems fair.

Regarding dependents, was there a change in qualifying dependents from the old way to the new way based on the age of 17?
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To my knowledge, The 17 years of age pertains to the CHILD TAX CREDIT and the answer is no. It's still 17 years of age
 
Rich123 said:
I think the better question should be, why are you worried about fairness?
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Other than being a term of very subjective meaning, the waste of resources and lower level of general welfare, you mean?
 
holbritter said:
Yes, for single individual. Not for a family of 4, like you used for the current tax brackets.

View attachment 67226454
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Well Holbritter ,thank you for correcting my mistake. Like they say garbage in garbage out. The scenario although still proves my point. Here is the math with the revised input data.

2018 tax bracket
$60,000 gross
minus standard deduction $13,000
equals $47,000
minus Personal exemption x4 $16,600 Personal exemption is $4150 per person
equals $30,400.00
First $19050 taxed at 10% = $1,905.00
Subtract $19050 from $30,400 = $$11,350 times 15% = $1702.50
$1702.50 plus $1905 Equals $3607.50 this is the total tax for this filer

GOP plan $60,000.00
standard deduction $24,000.00
equals $$36,000.00
no more deduction to tax
first $19050 taxed at 10% = $1,905.00
subtract $19050 from $36,000 = $$16,950 to be taxed at 12@ which equals $2,034.00/$2034.00 plus $1905.00 equals $3,939.00


Thus $3,939.00 minus $3,607.50 is a difference of $331.50 that the G.O.P plan cost this tax payer more than what the original 2018 plan would have

Thank you for catching that. I think you can see it was an honest error but an error no the less. As previously mentioned the scenario still proves my hypothesis. It still shows how the GOP authors who bragged about the standard deduction being raised and neglected to mention how they eliminated the Personal exemption was disingenuous. Look here folks, don't look over there. It's classic Carbonarro Effect.:)
 
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joG said:
Other than being a term of very subjective meaning, the waste of resources and lower level of general welfare, you mean?
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Yes exactly. Why can we as a country afford to give such huge tax breaks to those who historically haven't hired when given tax breaks. Who has off shored their work force and has repeatedly been rewarded for it by huge tax breaks , so where is their incentive to change their mode of operation? If we can do that as a country plus fuel the ever growing Military Industrial Complex with more and more money, but we can't help people in need? The one's who advocate for all this give to rich crap are the one's who say, we need to say Merry Christmas as though they knew anything at all about Christianity. If they knew as much they would remember what Jesus did with the Money Changers. They would remember that Jesus said "what you do for the least of thee, you do for me also." Ya I think you know exactly what I'm saying. I think maybe we might agree? Yes?
 
Rich123 said:
Yes exactly. Why can we as a country afford to give such huge tax breaks to those who historically haven't hired when given tax breaks. Who has off shored their work force and has repeatedly been rewarded for it by huge tax breaks , so where is their incentive to change their mode of operation? If we can do that as a country plus fuel the ever growing Military Industrial Complex with more and more money, but we can't help people in need? The one's who advocate for all this give to rich crap are the one's who say, we need to say Merry Christmas as though they knew anything at all about Christianity. If they knew as much they would remember what Jesus did with the Money Changers. They would remember that Jesus said "what you do for the least of thee, you do for me also." Ya I think you know exactly what I'm saying. I think maybe we might agree? Yes?
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They must have done something right. In spite of allowing the population to import much more than others and instead of taxing away incomes, US incomes ie buying power is pretty high by comparison and the bottom decile poor are as well off after cash and non cash transfers as in social democracies like Germany. There is no country of comparable attributes in which the population it as well off.
 
Thank you for all of your responses. They have been very helpful.

Seems my post has forgotten the quote...I had directed this to Rich123.
 
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joG said:
They must have done something right. In spite of allowing the population to import much more than others and instead of taxing away incomes, US incomes ie buying power is pretty high by comparison and the bottom decile poor are as well off after cash and non cash transfers as in social democracies like Germany. There is no country of comparable attributes in which the population it as well off.
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Well I see we don't agree. JMR I remember when my Dad's salary supported the family of five bought and paid for a home (NO MORTGAGE) and saved for the future. You could buy a gallon of Gasoline for .27 cents and a loaf of bread for a .25 cents. A good salary was $200.00 per week. Today a good salary is at least $1,000.00 and homes cost in the vicinity of $200,000.00 where homes then cost $8,000.00. Were is the equity? Salaries have gone up by 10 but homes have gone up by over twenty. Gasoline gone up at least 16 ,bread same thing. Our standard of living hasn't gotten better, it's far worse.
 
Rich123 said:
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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Ah. They did get rid of that. That, however, would not be a benefit previously enjoyed by a parent of an 18-year-old current student.
 
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