For years democrats have been claiming that Republicans tax the middle class to give tax break to the wealthy and it’s mostly been hyperbole. Well not anymore. Sad.
The entire plan is a smokescreen to drop the passthrough tax rate to 25%.
Most of the tax plan - that I’ve read, at least - is fairly benign. The most important part is lowering the rate for corporations. That needs to happen.
The main focus is the corporate tax cut. Other than that, it’s mostly shuffling things around that are likely to have little net effect, but are aimed at convincing voters that they will have a direct benefit as well.
pretty sure this will fuck the coasties that didnt vote for him.
It eliminates the deduction for state and local taxes. That would hurt 40 million people, primarily residents in high-tax states like California and New York. But it would add $1.3 trillion to federal revenues.
As of October 17, 2017, Republicans from high-tax states would vote “no” on a plan that eliminates the deduction.
To win those votes, Congress might allow taxpayers to choose between that and the state property tax deduction. Or it might only eliminate the deductions for households with income over $200,000. They make up 18 percent of those who claim the state property tax deduction, but they receive 40 percent of the benefit. Similarly, they receive 71 percent of the benefit of the state income tax deduction.
The basis of the plan:
Lower taxes for corps (im fine with this but lets remove significant deductions for them as well - their net tax rate should not be dropping significantly, effective rates large corps pay are low)
Lower taxes for DJT via pass through rate cap: No logical explanation for this - straight hand out Trump giving himself.
Estate tax repeal: DJT handout to the top .01%. This tax is not a huge revenue raiser - and it wasnt meant for that purpose it was to keep families from becoming dynasties. Im fine with increasing the minimum to 20mm or something but making it harder to avoid.
How the plan will be paid for:
Aggressive dynamic scoring & typical right wing accounting that “tax cuts pay for themselves in growth” - ill believe it when i see it. Hasnt worked that way in the past and any growth attributed to it didnt pay for the cuts.
Cutting spending - understandable, but naturally lets shove more money into the military while we are at it
Increasing taxes on people that didnt vote for DJT - political move that doesnt hurt the party in power one bit. Why should they care about the SALT deduction if those states dont vote for them. Will only work to increase the rural urban divide.
The plan is garbage to me, losing deductions is fine. Ill likely net a grand or two less all in with the increase in standard deduction not the end of the world. Its a pretty blatant plan that favors wealthy individuals & red states.
It seems like middle or upper middle class couples with 2 or more kids in a blue states are really getting the dick with no grease here. I’m not asking anyone to shed tears for me, but there really does seem to be a window between around 150 and 250K for joint filers where you’re getting hit from all sides.
anyways. does any of this matter. im pretty sure, republicans are going to show that they dont support him through this tax bill, his popularity will drop. then hes going to get impeached. going down as the worst president in america. lol
Most people agree that the corporate rate should be cut, Obama was in favor of this for years. If they just wanted to cut this rate they could just do it. The latest budget passed allowed them to pass a tax bill which would add 1.5 trillion to the deficit over 10 years. Cutting the Corporate tax rate would likely be in that neighborhood.
We currently receive as much tax revenue from passthroughs as Corporate taxes, in the business revenue segment. It’s the fast growing segment for US tax revenue. There really is no good reason to tax this group at such a drastically lower level than other high income earners (39.6% vs 25%) other than to reward the high income earners which are significantly more likely to receive their income from ownership stakes in passthrough.
On the other hand, it would not be so fair to cut corporate tax rates, but not rates for partnerships, limited liability companies, and other non corporate businesses.
Did they release the income ranges? Without that it is basically not even worth discussing with respect to personal taxes.
Not going to pass. GOP can’t agree on sh*it.
Am I reading this right? Mortgage interest deduction capped at $500k. So if you’re paying $600k in mortgage interest the last $100k won’t be deductible? That seems completely reasonable. That’s a ton of mortgage interest. Mine’s like $10k a year or something.
Realtors and homebuilders are saying this is going to throw the housing market into recession. What am I missing here?
That means $500k of loan balance…
i think stl understood that.
Affects 15% of new homes sold.
https://www.census.gov/construction/nrs/pdf/ussoldbypricea.pdf
i actually think they should repeal that shit. why the fuck do renters not get a tax deduction but buying a house does. retarded.
The press release states “home purchase” of 500k. Not sure if this means you can only deduct if the home purchase itself is less than 500k or if the mortgage balance is less than 500k. Assuming it applies to mortgage balances, it’s not clear if the deduction is gone altogether for loans in excess of 500k or if it’s pro rata where you can deduct the interest derived from the first 500k of mortgage principal.
its for mortgage balance. its always been. they are jus lowering the limit from 1m. not really sure if its pro rata. i’ve never had a second mortgage. lol.
in credit cards they made a law that makes it so you pay the highest interest first. itneresting fact!
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No, that helps but still not entirely clear. If it’s the value of the home at the time of purchase, that’s way too low. If it’s the remaining balance…meh, still probably too low for my liking. I’d be more comfortable with that around $750k. I’m sure those of you on the coasts would say it needs to be even higher.
Why can’t it be dynamic based on your zip code or something? Is that too difficult for the IRS to handle? I guess I just answered my own question.
I’m actually ok with this change. It creates an incentive for people to buy houses in the $600k range, rather than the $1 million range. The economy will be safer from another real estate bubble as a result.
I don’t think there should have been a mortgage interest deduction at all, but that’s another topic.