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post #1 of 93 Old November 3rd, 2017, 01:41 PM Thread Starter
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The Tax Cuts and Jobs Act

Any of y'all dug into the details of this bill very much? https://taxfoundation.org/details-tax-cuts-jobs-act/

I looked over it yesterday, and it's hard to put into words how furious I am over it. Republicans have control over both chambers of Congress, AND the White House, and THIS is what they come up with for tax reform?!

My basic summary of it is:

The winners are:

1. Lower-middle income non-homeowners are going to see a few hundred bucks more in their pocket (MAX...) from the effective standard deduction going up a tiny bit.
2. Larger business owners and otherwise established millionaires are going to become, well, multi-millionaires from the reduced business taxes and elimination of the AMT and estate taxes.


The people paying for the above winners are:

1. Homeowners, in general, who are getting screwed.
2. Homeowners with no children who are REALLY getting screwed (this is the category I fall in)
3. Homeowners in states with high income taxes who are practically going to need to take out a mortgage on their mortgage to pay the additional taxes they're going to owe.
4. Basically, anyone who itemizes and deducts any significant value is getting raked over the coals. Medical expenses will be a HUGE one for many people.


I'm in that #2 category above. I ran the numbers, and as it stands right now, I will owe $1879 MORE than the already outrageous amount I paid this past year. It's roughly a 30% increase in my federal tax liability. And for reference, I'm in the 25% bracket now, would be in the 25% bracket under this new "plan", and make just a bit more than the median salary in the US. I'm not exactly what anyone would call 'wealthy'.

Also, with their proposed changes to the capital gains tax exemption for home owners, I'm going to owe ~$6000 if I sell my home in the next 3 years (pretty certainly going to be selling it next year). Real nice.

And they (Republicans) are calling this tax reform for the middle class? What in the hell are they smoking? The only people getting a tax cut of more than a couple hundred bucks are millionaires, which is being paid for by none other than the middle class. I don't even know why I'm surprised....

Oh, and on top of all of this, it's still adding 1.5 TRILLION to the deficit....after all those years they've complained about Obama running up the deficit and how they couldn't do anything about it because he wouldn't sign their budgets.

Screw them. Screw every single one of them. I'll never vote for a Republican again.

-Will


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post #2 of 93 Old November 3rd, 2017, 02:19 PM
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Quit yer whining and grab your bootstraps boy! It ain't so hard to be a millionaire!

(/sarcasm, in case it isn't obvious)

---------- Post added at 10:19 AM ---------- Previous post was at 09:56 AM ----------

But really, almost all national-level politicians are completely out-of-touch with the true middle class. It's just especially hilarious because Republicans act like they're the champions of the middle class and they use wording and give tiny little slivers of meat for the middle class to chew on while they reach around your back and stuff wads of cash into the pockets of those that are already drowning in wealth.

I see more democrats that seem to know they're getting fucked in the ass but understand progress takes time and are willing to fight against their own party in order to make things better. Republicans just buy the bullshit, thinking that one day they'll be the ones that are getting the benefits, even if they get fucked in the present to the point of never being able to dig out of their holes. But at least they'll never be like those dirty poor druggie people in the urban areas!

Just name a bill "Tax Reducer 5000" and the base will buy into it (think Patriot Act or Internet Freedom Act [fucking LOL] or any other bill that's titled the exact opposite of what it actually does) without realizing it does absolutely nothing for the majority and does absolutely everything for those at the top. But hey! Trickle-down economics has been doing us a great favor! We can all feel it raining down on us....any day now.....Oh wait no, the people at the top just keep hoarding the money and investing in automation since that makes the most market-sense. But just keep telling the workers their jobs went overseas due to dirty liberals and that NOW they'll be coming back!

But yeah, it's pretty easy to know what the beef of a bill is based on its name. Whatever it's called, just know that it does the exact opposite and you'll have a good grasp on our modern politics.
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post #3 of 93 Old November 3rd, 2017, 02:35 PM
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cool, i'm a homeowner with no children

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post #4 of 93 Old November 3rd, 2017, 02:41 PM
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Originally Posted by BWAL View Post
cool, i'm a homeowner with no children

[ACTUAL VIDEO OF TRICKLE DOWN ECONOMICS IN ACTION GONE SEXUAL NSFW YOU WON'T BELIEVE NUMBER 7]

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post #5 of 93 Old November 3rd, 2017, 03:41 PM Thread Starter
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Originally Posted by brtnstrns View Post
Quit yer whining and grab your bootstraps boy! It ain't so hard to be a millionaire!

(/sarcasm, in case it isn't obvious)

---------- Post added at 10:19 AM ---------- Previous post was at 09:56 AM ----------

But really, almost all national-level politicians are completely out-of-touch with the true middle class. It's just especially hilarious because Republicans act like they're the champions of the middle class and they use wording and give tiny little slivers of meat for the middle class to chew on while they reach around your back and stuff wads of cash into the pockets of those that are already drowning in wealth.

I see more democrats that seem to know they're getting fucked in the ass but understand progress takes time and are willing to fight against their own party in order to make things better. Republicans just buy the bullshit, thinking that one day they'll be the ones that are getting the benefits, even if they get fucked in the present to the point of never being able to dig out of their holes. But at least they'll never be like those dirty poor druggie people in the urban areas!

Just name a bill "Tax Reducer 5000" and the base will buy into it (think Patriot Act or Internet Freedom Act [fucking LOL] or any other bill that's titled the exact opposite of what it actually does) without realizing it does absolutely nothing for the majority and does absolutely everything for those at the top. But hey! Trickle-down economics has been doing us a great favor! We can all feel it raining down on us....any day now.....Oh wait no, the people at the top just keep hoarding the money and investing in automation since that makes the most market-sense. But just keep telling the workers their jobs went overseas due to dirty liberals and that NOW they'll be coming back!

But yeah, it's pretty easy to know what the beef of a bill is based on its name. Whatever it's called, just know that it does the exact opposite and you'll have a good grasp on our modern politics.
Yup. I suppose I need to just shut up and fall on my proverbial middle class sword so that the millionaires out there can become even more millionaire-y.

Quote:
Originally Posted by BWAL View Post
cool, i'm a homeowner with no children



But really....bend over.

It's easy to know just how much. If you itemized last year (being a homeowner, I'd be surprised if you didn't), just sum up your total deductions including your personal exemption(s). Now, subtract your state taxes, medical expenses, student loan interest, and personal exemption(s), and take either the result, or $12,000, whichever is higher. The difference of that number, and your total deductions, times your marginal tax rate, is how much more you'll be paying.

For me, it is about $20k in total deductions, minus $7.5k in state taxes and my personal exemption, equals $12.5k. So $7.5k times my 25% marginal = ~$1875 more that I'll owe.

I can only imagine what's going to happen to those in states with much higher state income taxes and/or costs of living. Or people paying $7k+ in out-of-pocket medical expenditures every year. Or the people paying a couple thousand in student loan interest each year. There are millions of people (who are all VERY MUCH "middle class") out there that are going to make my $1875 extra not look bad at all.

Those Republicans really caring about the middle class now, aren't they?

-Will


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post #6 of 93 Old November 3rd, 2017, 09:21 PM
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For most people none of what has been said is true. If you believe it then you have no idea how taxes work. This Washington Post article compares current to proposed tax plans.
https://www.washingtonpost.com/graph...=.57ce50325ba8

1. Let's look at tax brackets: You have said you are in the 25% tax bracket in both plans. As most of us know being in the 25% bracket does not mean you pay 25% on all taxable income. Our rates are progressive rates.

Using an example of a married couple having a taxable income (after credits, deductions and exemptions) of $100,000, they would pay approximately $1,900 (10%) on the first $19,000, $8,750 (15%) on income between $19,000 and $77,400, and $5,650 (25%) on income between $77,400 and $100,000. Total taxes based upon $100,000 of taxable income would be $16,300. Now under the proposed tax law that same couple would pay roughly $10,800 (12%) on the first $90,000, and $2,500 (25%) for income between $90,000 and $100,000. Total taxes based upon $100,000 of taxable income would be $13,300. Based upon tax brackets alone this couple would save $3,000.

That $3,000 savings applies to all married couples with a taxable income of up to $156,000. It will be more for couples with taxable incomes of up to $260,000 because under the new proposal their tax rate stays at 25% instead of jumping up to 28% and 33%.

2. Standard deduction: This is a deduction not a credit. For deduction you get only a portion of what you spend back. A credit gets it all back. Let's use that 25% tax rate again. Changes in the standard deduction could help some families and hurt other because the proposal has exemptions going away. You say you have no children. Neither do I. Mine are grown and have moved out. Under current tax law a married couple without children roughly gets an $8,000 exemption. If that goes away and the standard exemption is doubled to $24,000 then taxable income will be reduced by approximately $4,000. In a 25% bracket that is a tax savings of $1,000. And we haven’t discussed the new tax credits yet.

Are the families with children screwed? If the media is only talking about exemptions and deductions then you might think so but… The new tax proposal gives each tax payer a $300 tax credit and it give a $1,600 credit for each child. The married couple with no children will save another $600 making total saving $1,600.

And the children? Right now each dependent child get a $4,000 deduction. At 25% that is $1,000 off of taxes. A $1,600 tax credit is $1,600 of taxes. Families with children will save $600 per child.

What about those that itemize? That is too complicated for a simple discussion. It depends on the deduction. But they would need to spend more than $24,000 on legal deductions before they would even want to itemize.

3. Mortgage Interest: Current law allows an itemized deduction of mortgage interest on original mortgage debt of up to $1,000,000. The proposal cuts that to $500,000. Around here only the well off can afford to buy a $500,000 house. The chart in the article shows which parts of the country will be affected the most. There are only two places where more than 20% of the mortgages are over $500,000. That is California and Washington D.C. In Indiana where I live less than 1% of the houses are $500,000 or more. The medium home value in Indiana is $122,000. It not just Indiana. In 20 of the 50 states less than 1% of the houses are above $500,000.

Using an online payment calculator A $500,000 mortgage for 30 year at 4% results in a monthly payment of $2,387 per month ($28,644 per year). That is a lot. Double that for a $1,000,000. As with all installment loans more interest is paid in the first few years than the last few so let’s use the average. The online calculator says that total interest paid over the life of the loan is around $360,000. That is for 30 years or 360 month. That averages $1,000 per month or $12,000 per year. Which is the same amount that the standard deduction increased.

That is average. In the early years you will pay more taxes. In the latter year you will pay less because the standard deduction is greater than the interest paid.

4. According to the link above there weren’t any changes to capital gains.

By the way, middle class is a fairly ambiguous term. $100,000 of taxable income is around $125,000 gross under the new tax plan ($300 credit times two and a $24,000 standard deduction). That is not middle class in most of the United States. For the US as a whole the range is $32,0000 to $109,000. $125,000 is in the wealthy category. But when you look at the high cost of living areas $100,000 is squarely in the middle class. That is hard to understand when only 20% of US families have an income of $100,000 or more. Obviously that 20% mostly lives in the high cost areas. I wonder, should the federal government set income tax policies for people in the wealthy category or people living in wealthy areas or should it set policy for everyone.
https://www.washingtonpost.com/news/...=.6dcaff04c7fa
Why Is a $100,000 Income No Big Deal Anymore?

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post #7 of 93 Old November 4th, 2017, 01:52 AM
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Originally Posted by Eagle2000GT View Post
As most of us know being in the 25% bracket does not mean you pay 25% on all taxable income.
A fact conveniently never brought up by conservatives when addressing our "35%" corporate tax rate...

From everything I've read, it looks like I'm going to be saving a negligible amount on taxes on an average year. This past year has been a real fucked up, off year. I have thousands in medical bills from May that I had been counting on being able to use towards a deduction, but looking like that's going down the drain. This is also the first full year of being in my new home. I'd have had a sizable deduction this year itemizing with those two things on top of work expenses, DMV fees, etc...

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post #8 of 93 Old November 4th, 2017, 03:23 AM
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That is only true for small businesses. Small business owners organized with pass through taxes are taxed on the income whether they take the money out of the company our not. I worked for such a company. Every year the company had to bonus the owners just so they could pay the taxes on business income. The idea of a lower business tax rate is that more money can stay in the company for improvements and expansion.

The progressive tax rate is a drop in the bucket for the amount of taxes paid by large corporations because you are talking about taxable income in the millions and billions.

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post #9 of 93 Old November 4th, 2017, 07:43 PM
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Originally Posted by Eagle2000GT View Post
The idea of a lower business tax rate is that more money can stay in the company for improvements and expansion.


Is that what they call lining their pockets with money from tax cuts by increasing their golden parachute severance packages now? "improvements and expansion"? LOL!

What is occurring has nothing to do with reform and everything to do with rewarding their donors. Certainly they need to throw a few bones at the middle class so that they can bait and switch by pointing to the crumbs that they are offering the middle class as "tax reform. Let's be clear. There is no "reform" going on. It's all about "tax cuts" which the 1% benefit from the most. Trump is in that 1%. What a coincidence.......

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post #10 of 93 Old November 5th, 2017, 02:15 AM
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That is only true for small businesses. Small business owners organized with pass through taxes are taxed on the income whether they take the money out of the company our not. I worked for such a company. Every year the company had to bonus the owners just so they could pay the taxes on business income. The idea of a lower business tax rate is that more money can stay in the company for improvements and expansion.

The progressive tax rate is a drop in the bucket for the amount of taxes paid by large corporations because you are talking about taxable income in the millions and billions.
I was referencing effective corporate tax rates versus the standard rate. Everyone points to that 35% as being out of line versus other countries, but when you look at average effective tax rates, suddenly we're not nearly as far off as conservatives try to twist it.

And come on, man. How often is the outcome way off from the idea? Short term profit has become the number one goal because of companies being at the mercy of greedy executives and shareholders, long term success be damned.

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post #11 of 93 Old November 5th, 2017, 10:02 AM
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Short term profit has become the number one goal because of companies being at the mercy of greedy executives and shareholders, long term success be damned.
Now we're switching the discussion to large publicly traded corporations instead of the smaller pass-through companies. Companies large enough where the progressive tax rate is unimportant because 99% of their taxable income is taxed at the highest rate.

Some of this is true. There is a saying that executives live and die by the quarterly report. But managers that lose sight of long-term objectives don't usually thrive for very long. It is impossible to sustain good results on quarterly reports if long-term objectives are not met.

And its not just stock prices that are important. For blue chips dividends are equally important. Many retirees live off of dividends. And this doesn't just apply to the rich. Defined benefit plans (company retirement plans) are on the decline. Most workers now have defined contribution (401k) retirement plans which either directly or indirectly invests in the stock market. Young workers are usually advised to invest in growth companies or growth funds because retirement is a long way away and they can live through a market downturn like the Great Recession. Older workers and retirees are advised to go a more conservative, to invest in value funds containing dividend payers and bonds because a market downturn would be extremely detrimental to them.

P.S. The market through define contribution plans affect almost everyone I know. It doesn't matter if you are a truck driver, factory worker, or university professor almost everyone I know's retirement is tied to a 401k or 503b. Whether their political believes are left or right they are all capitalists.

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post #12 of 93 Old November 6th, 2017, 05:27 PM Thread Starter
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Yes, I'm very well aware of how our income tax works. It's not nearly as complicated as people make it out to be. In most all of comments and figures above, I was speaking in marginal terms. Yes, it's obvious that I'm not paying a total of 25% when I'm in the 25% bracket. But if my total taxable income increases or decreases by $10,000, my tax bill most certainly is changing by $2,500.

So, in 2016, after taking out my retirement contributions, mortgage interest, state income tax, property taxes, and personal exemption, I had $43,465 of taxable income, which means $6637.50 in federal income taxes.

I wrote off $7,516 in state income taxes and the personal exemption. With those gone, I'm at $50,981 in taxable income. (I'm still above $12k in itemized deductions, which means that the increase in standard deduction means diddly squat to me.)

So, $50,981 in taxable income under the new brackets means ($45,000 * 0.12) + ($5,981 * 0.25) = $6,895.25 that I'd owe in 2018.

I gladly admit that my original calculations were a bit off because I wasn't considering the brackets below my 25% and the effect they had on the overall total.

That said, as long as you're still keeping track, that's still $257.75 more than I paid before.

My point still remains that middle class homeowners in states with higher income taxes and/or states with higher costs of living (i.e. higher wages) will see much larger increases to the tune of $0.25 on the dollar more in taxes they pay than I do. And with all the other deductions being eliminated (medical expenses, student loan interest, child adoption credits, etc.), there will certainly be MILLIONS of people paying more next year than this.

Oh, and regarding the capital gains on your personal residence. It IS indeed changing. Previously, capital gains were excluded if you lived in a house for 2 of the previous 5 years. It's now changing to 5 of 8 years. When I bought my house about 2.5 years ago, I had every intention of moving out 2-3 years down the road. Well, things have worked out roughly as I planned, and I'm looking to move out in roughly 6 months from now. Because of the ridiculous growth the Raleigh/Durham market has seen in the last few years, the latest estimates have my house at being worth ~$40,000 more than when I bought it, and no sign of it slowing down anytime soon. That means that I'm going to owe $6,000+ in capital gains taxes when I go to sell it next summer. Yay.

Look, you, or Paul Ryan, or Trump, or whoever, can try and spin this a thousand different ways, but here's the facts:

1. Many Americans who only take the standard deduction will see small decreases in their tax liability.

2. Virtually all of the nation's richest few percent will see dramatic tax cuts, whether in the elimination of the AMT, the estate tax, or the business tax changes.

3. Middle class itemizers will get stuck with the bill. There's almost 30 million Americans with incomes between $50k and $200k that itemize, and the majority of those will see their taxes increase. These people are the absolute backbone of the American economy, the people that actually have a little spending money leftover at the end of each month, and tend to spend it. Taxing these people is going to be extremely counter-productive for the economy.

All of this, and they're STILL adding 1.5 trillion (with a 'T') to the deficit over 10 years.

So, as I said earlier. Screw Paul Ryan and these supposed conservatives / Republicans.

---------- Post added at 04:27 PM ---------- Previous post was at 04:13 PM ----------

Here's a very good read (that was specifically prepared for members of Congress):

https://fas.org/sgp/crs/misc/R43012.pdf


Here's a particular line that sticks out:

Quote:
Although tax filers with an AGI greater than $1 million claimed a larger average amount of deductions ($424,864), 87% of itemizers had an AGI less than $200,000 (or 97% have less than $500,000 in AGI) and they accounted for 65% of itemized deductions claimed (or 82% for itemizers with less than $500,000 in AGI).
In other words, all of these deductions that they are eliminating are disproportionately affecting people with incomes less than $200,000 (or $500,000).

So they're helping out relatively poor people a little bit by increasing the standard deduction, helping out the rich tremendously with the elimination of several key taxes, all-the-while nailing middle class itemizers to the wall by eliminating the deductions that benefit them (the middle class) the most.

What's new?

Republicans / "conservatives" are going to have to do a whole bunch of mental gymnastics to defend this one....

-Will


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post #13 of 93 Old November 6th, 2017, 05:47 PM
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In other words, all of these deductions that they are eliminating are disproportionately affecting people with incomes less than $200,000 (or $500,000).

So they're helping out relatively poor people a little bit by increasing the standard deduction, helping out the rich tremendously with the elimination of several key taxes, all-the-while nailing middle class itemizers to the wall by eliminating the deductions that benefit them (the middle class) the most.
DING! You nailed it. The travesty they are calling Tax Reform is just another conservative ploy to reward their donors(and themselves for that matter). At the start of Trumps term they tried to gut the ACA which would free enough money for them to be able to enact draconian tax cuts for the wealthy and be able to say that the money they had cut out of medicare/medicaid/ACA/CHIP/SNAP, etc. made the tax cut revenue neutral.

Since that attempt went down in flames they now have to abandon their fiscal propriety to be able to "get one on the scoreboard for the President" lest they be primaried in the upcoming election. This is where Bannons influence becomes much more pronounced regardless of whether he is in or out of the WH. He has taken it upon himself to get far right clowns like Roy Moore elected into congress.

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Republicans / "conservatives" are going to have to do a whole bunch of mental gymnastics to defend this one....
At this point they've bent over to Trump enough that they have nothing really to lose. The general public has zero confidence in congress so there isn't anywhere to go but up. Good example is their attempt at trying to repeal the ACA. They did it behind closed doors in a wholly partisan fashion and only one conservative actually voiced opposition to doing it that way. As you know it was widely panned yet they forged ahead to "get one on the scoreboard" and it failed miserably. I predict the same for "tax reform" as there are already camps within the Republican party that are leaning towards a no vote. James Lankford(OK) is already talking about voting no if the "tax reform" puts too much of a burden on the already burdensome debt. I see no way of them not avoiding adding to the debt with the tax cuts they have proposed. With the dissenting voices on the far right and some of the more moderate members also voicing concern I don't see tax reform making it out of the Senate.

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post #14 of 93 Old November 7th, 2017, 05:40 PM
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Yes, I'm very well aware of how our income tax works. It's not nearly as complicated as people make it out to be. In most all of comments and figures above, I was speaking in marginal terms. Yes, it's obvious that I'm not paying a total of 25% when I'm in the 25% bracket. But if my total taxable income increases or decreases by $10,000, my tax bill most certainly is changing by $2,500.
That is only true if all of the tax brackets below 25% stay exactly the same. Using $43,465 and the single tables under the current law taxes would be $6,904. Under the proposed tax plan it would be $5,216 before the $300 taxpayer credit and $4,916 after. That's a $1,988 savings.

If $10,000 of taxable income is added ($53,465 total) then under the current 25% tax bracket taxes would go up $2,500. Under the proposed tax rates the 25% bracket doesn't start until $49,000, therefore, $5,535 of the $10,000 is taxed at the 12% rate. The rest is taxed at 25%. That means taxes on the additional $10,000 under the proposed plan would only be $1,780 not $2,500.

Now let's say that the $10,000 of additional taxable income only applies to the propose tax plan because it is a result of other tax changes. Then the taxes would be $6,904 before the changes and $6,696 ($4,916 + $1,780) after. Taxes still went down! Just not as much.

You mentioned that you are unhappy because you may have to pay taxes on a $6,000 capital gain when you flip your house because you now have to keep the house longer to get the exemption. That is not something that is affecting all middle class taxpayers. The rate of home ownership has been going down. It is somewhere around 50% for middle class taxpayers. And the average length of time staying in a home is now 9 years so the majority of the home owners will still get the exemption.

There will be those that pay more but I think the vast majority of middle class taxpayers will end up owing less taxes.

By the way, I'm not totally sold on the entire deal even though I will save on my taxes. I wanted any proposed tax plan to be revenue neutral. I want Congress to start addressing our deficit spending.

P.S. Staying in a house only 3 years is a really short period of time. For most locations appreciation wouldn't cover the realtor costs.

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post #15 of 93 Old November 7th, 2017, 11:03 PM Thread Starter
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That is only true if all of the tax brackets below 25% stay exactly the same. Using $43,465 and the single tables under the current law taxes would be $6,904. Under the proposed tax plan it would be $5,216 before the $300 taxpayer credit and $4,916 after. That's a $1,988 savings.
You've got some numbers crossed up, or I'm seriously missing something.

Under the current law, $43,465 is subject to: $5,183.75 + ($43,465-$37,650)*0.25. Which equals $6,637.50.

https://www.irs.com/articles/2016-fe...ard-deductions

(These are using 2016 numbers since that's the most recent full set of data I have. If using 2017 numbers, it'd be $6,605, which is practically the same thing.)

Yes, you are correct that $43,465 of taxable income would net a $5,216 tax bill, a $1,422 savings.

But you missed an extremely crucial point: my taxable income is no longer $43,465. It's going up by $7,516 because of the elimination of the state income tax deduction, and the personal exemption. So now my taxable income is $50,981. Under the new rules, my total owed will be: ($45,000 * 0.12) + ([$50,981-$45,000] * 0.25), which equals $6,895.

That is $257.75 more than I paid in 2016. Contrary to what I've seen / heard no less than a dozen times from Republican politicians, my taxes will be going up if this passes.

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Originally Posted by Eagle2000GT View Post
...before the $300 taxpayer credit...
I need to do some more reading on exactly what this is. From what I remember of the articles I read a few days ago, this is a parent tax credit, and not just one anyone can claim. But I could easily be wrong on this.

Regardless, it's temporary. It's gone after 5 years. I do know that.

Quote:
Originally Posted by Eagle2000GT View Post
You mentioned that you are unhappy because you may have to pay taxes on a $6,000 capital gain when you flip your house because you now have to keep the house longer to get the exemption. That is not something that is affecting all middle class taxpayers. The rate of home ownership has been going down. It is somewhere around 50% for middle class taxpayers. And the average length of time staying in a home is now 9 years so the majority of the home owners will still get the exemption.

P.S. Staying in a house only 3 years is a really short period of time. For most locations appreciation wouldn't cover the realtor costs.
For clarification, no, I'm not paying taxes on a $6000 capital gain. I'm paying taxes on a $40,000 capital gain, which equates to an extra $6000 in taxes that I have to pay. Pretty significant difference.

From what I'm seeing, the median length of home ownership is around 6 years. The average is likely skewed higher by the few people who own homes for 40, 50+ years. https://www.financialsamurai.com/the...d-real-wealth/

So that means that upwards of 50 percent of homeowners will be affected by this change. That's a lot. Granted the market has a lot of effect on it, but that tax increase has the potential to be HUGE for a middle class homeowner with a $200k-$400k home.

3 years is a short time, but it's a complicated situation. I planned, timed, and executed my strategy damn near perfectly, as evidenced by the fact that my $175k home will likely sell for upwards of $225k next year if things continue in this market as they are now. That handily covers the closing costs on both ends, and puts a heck of a dent in the down payment on the next home.

Though it now looks like that dent will be $6000-$8000 less thanks to a bunch of f***tard Republicans. A whole lot of other middle class homeowners just like me will see similar hits. I'm not familiar with other markets around the country, but I can tell you upwards of 100% of people in the RDU area that have bought homes in the last 5 years would be in a similar situation.

Quote:
Originally Posted by Eagle2000GT View Post
There will be those that pay more but I think the vast majority of middle class taxpayers will end up owing less taxes.
You are right. The roughly 70% that don't itemize will see relatively small tax decreases. Just enough to shut them up.

But of the 30% that do itemize, the vast majority itemize more than the change in standard deduction will cover. Which means that their tax liability will be going up, and thus they will be owing more.

Throw in the little fine print changes like the capital gains tax exclusion, and the ONLY people losing in this deal are working, middle class Americans. While the ONLY people benefiting any significant amount are the millionaires and the large business owners.

It's just like I said in my first post, this is not tax "reform". It's blatant, massive tax cuts for the extremely wealthy, paid for 100% by working, middle class Americans, as evidenced by the fact that the deficit is still increasing. They can try and spin it any way they want, but them's the facts.

-Will


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post #16 of 93 Old November 7th, 2017, 11:37 PM
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I did use a wrong number. I used $49,000 instead of $45,000. Good catch. The personal exemption is gone but there is suppose to be a $300 taxpayer credit. That would put you pretty close to breakeven.

As far as home ownership, I was quoting a 2012 article. It said that it was 6 years in 2008 but had gone up 50% to 9 years in 2012 (the article was updated in 2014).
https://www.creditsesame.com/blog/mo...n-their-homes/

That was the most recent article google brought up when I searched.
https://www.google.com/search?q=How+...utf-8&oe=utf-8

Of course if I had scrolled down a little further I would have found an article that said the average length of time is 13 years. 15 years for people who had previously owned a home and 11 years for new home buyers. That was based on a 2011 American Housing Study.
http://homeguides.sfgate.com/many-ye...ing-98032.html

It appears the results change depending upon who is doing the research.

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post #17 of 93 Old November 9th, 2017, 04:58 PM
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The Washington Post gave the Democrats four Pinocchios (for lying) concerning their comments that the proposed tax plan will raise taxes on most working class families.
Washington Post gives Senate Dems 'four Pinocchios' for false GOP tax plan accusations | In the Greenroom - Fox & Friends | Fox News

Unfortunately, I cannot read the full article without paying money.

I also found a NY Times article that says 70% of filers use the standard deduction instead of itemizing. Those 70% will see a reduction in taxes.
https://www.nytimes.com/interactive/...-tax-plan.html

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post #18 of 93 Old November 10th, 2017, 01:59 PM Thread Starter
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The Washington Post gave the Democrats four Pinocchios (for lying) concerning their comments that the proposed tax plan will raise taxes on most working class families.
Washington Post gives Senate Dems 'four Pinocchios' for false GOP tax plan accusations | In the Greenroom - Fox & Friends | Fox News

Unfortunately, I cannot read the full article without paying money.
I agree here. Using the word "most" when clearly ~70% take the standard deduction is clearly going to earn some Pinocchios.

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Originally Posted by Eagle2000GT View Post
I also found a NY Times article that says 70% of filers use the standard deduction instead of itemizing. Those 70% will see a reduction in taxes.
https://www.nytimes.com/interactive/...-tax-plan.html
Yup, I already stated that in my last post. Those 70% certainly will see small decreases in the taxes they pay.

The rub is with those that itemize. Go back and look over this again: https://fas.org/sgp/crs/misc/R43012.pdf

Look specifically at table 1. Bear with me a bit...

There are 28,216,256 filers who itemize with incomes between $50k and $200k, with a weighted average of $22,244 in itemized deductions.

It doesn't say if those are married or single filers, so let's assume a 75/25 split.

At a 75/25 split, that means the weighted new standard deduction is $21,000. That also means that the old weighted personal exemption is $7,088.

So sum up the itemized deductions and the personal exemption(s), and you get $29,331 that itemizers (with incomes between $50k and $200k, very squarely in the middle class) were previously eliminating from their taxable income.

This means that under the new plan, itemizers' taxable income will increase by up to $8,331 ($29331 - $21000), with it being guaranteed to increase by at least the $7,088 personal exemption that's being eliminated.

Those numbers are very similar (almost exact, actually) to my own situation where I'm roughly breaking even. So in other words, the average of these 28,216,256 filers will roughly break even. That means that (roughly) half of those 28M will come out a little ahead. Eagle, I know you're smart enough to know what's happening to that other half...

And as I pointed out in my last couple of posts, this doesn't even include the little fine print they've thrown in like the changes to the capital gains on homes, or elimination of moving expenses deductions, child adoption credits, etc.

I don't know how many more ways to state this: no matter how you slice and dice it, the ONLY people in the United States of America that are at risk for their taxes increasing in 2018 are working, middle class citizens. Period.

-Will


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post #19 of 93 Old November 11th, 2017, 11:42 PM
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The tax law is changing as we speak with the House and the Senate working on different versions of the bill. The House which is population based appears to want to keep the state tax deductions probably because the high tax states are also the most populous. The Senate where each state is representated equally favors getting rid of it.

A couple of philosophical questions.

1. Why should someone who lives in a low tax state pay more federal tax than someone who lives in a high tax state? Shouldn't all Americans who earn the same amount pay the same tax? Why should people who have chosen to forego many of the services offered in high tax states pay more?

2. Why should someone who has saved and paid off his home mortgage pay more federal taxes than someone who has just refinanced to pay off credit cards? Why should someone who rents pay more federal taxes than someone who has bought a home as an investment and is flipping it?

Both of the above is penalizing savings in favor of spending: spending on more government services or spending on bigger homes (or consumer goods on credit cards).

As you may have noticed I'm pretty much a flat tax advocate. I am not a purist and realize that a true flat tax will never happen but I am pretty much against social engineering through the tax code. Rent or buy should be a personal decision. Pay off the house or refinance should be a personal decision. People with the same adjusted gross income should pay the same taxes. How we choose to spend our money shouldn't affect the taxes we pay. One of the deductions I agree with is the medical deduction because we do hot choose to get sick.

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post #20 of 93 Old November 13th, 2017, 01:38 AM
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Quote:
Originally Posted by Eagle2000GT View Post
The tax law is changing as we speak with the House and the Senate working on different versions of the bill. The House which is population based appears to want to keep the state tax deductions probably because the high tax states are also the most populous. The Senate where each state is representated equally favors getting rid of it.

A couple of philosophical questions.

1. Why should someone who lives in a low tax state pay more federal tax than someone who lives in a high tax state? Shouldn't all Americans who earn the same amount pay the same tax? Why should people who have chosen to forego many of the services offered in high tax states pay more?

2. Why should someone who has saved and paid off his home mortgage pay more federal taxes than someone who has just refinanced to pay off credit cards? Why should someone who rents pay more federal taxes than someone who has bought a home as an investment and is flipping it?

Both of the above is penalizing savings in favor of spending: spending on more government services or spending on bigger homes (or consumer goods on credit cards).

As you may have noticed I'm pretty much a flat tax advocate. I am not a purist and realize that a true flat tax will never happen but I am pretty much against social engineering through the tax code. Rent or buy should be a personal decision. Pay off the house or refinance should be a personal decision. People with the same adjusted gross income should pay the same taxes. How we choose to spend our money shouldn't affect the taxes we pay. One of the deductions I agree with is the medical deduction because we do hot choose to get sick.
3. Should people with kids pay less in federal taxes versus those who chose to not have children/cannot have children?

I don't agree with you often, but I agree with you here.
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