Posted on 11/25/2017 6:58:33 AM PST by SkyPilot
If you are a Bob Dole Republican, as I generally am, it is oh-so-difficult to be gung ho about where the GOP is headed these days, which seems like straight to hell. The party all too often has abandoned traditional Republican principles.
The gargantuan tax bill, touted by President Donald Trump and passed by the House of Representatives, is being debated in the Senate. Only one aspect of the bill personifies Republican principles, and that is a pro-business tilt, which I can embrace, but only to a point. When the result is higher taxes on the middle class, they lose me. To sell this massive tax cut for businesses and the wealthy as a boon to the middle class is an outright distortion. And to claim the bill is not a trillion-dollar-plus budget buster is either a bald-faced lie, or those who support it are living in the same fairy tale as Kansas Gov. Sam Brownback.
One of the key components of the proposed tax bill is the elimination of the deduction for state and local taxes (SALT). The loudest screams about SALT are from taxpayers in high-tax states, where those deductions are huge. But the damage is not limited there.
Many middle-income taxpayers here will be significantly impacted. Case in point is Johnson County.
The population of Johnson County is almost 600,000, and the number of households is approximately 200,000. Of those households, half claim the SALT deduction, according to the National Association of Counties. And how much does each household deduct? In 2015, the average SALT deduction was $12, 281. And here’s the kicker: More than 80 percent of middle-income taxpayers in Johnson County benefit from this deduction.
(Excerpt) Read more at kansascity.com ...
I’m all for cutting the business rate. But they are operating under a democrat rule - the Byrd Rule - that requires “paying” for those cuts. Instead of cutting spending, they’re paying for the cuts by taking in more money from middle class individual filers. That’s what their own budget calculations show. They love it when GOP sheeple refuse to believe they’re doing what they’re doing, because they dont want to be held accountable for their tax-raising
I’ve been thinking of late it would be good to re-introduce the SALT deduction at a value of 50 cents per dollar of state and local tax. SALT, to encourage localism. Only 1/2 to attempt to discourage big government at state and local level.
However, I would allow folks to count 1/2 of income tax AND 1/2 of sales tax (most states have both), rather than either-or. 1/2 of property tax can be counted, too, of course.
California’s top income tax rate is 13.3%, approved by lots of dumb people in a referendum. I’m sure they would enjoy deducting 1/2 of that from Fed taxes until the Sacramorons gain some sanity and control their spending.
Umm, no. I'm not whining. I want to be on your side but I don't see it. Show me the numbers and win me over or quit whining yourself.
What is it that the rich are getting out of this? They aren’t reducing the rate for them. The only reason they benefit is that they also pay the lower tax rate that the middle class gets for the first dollars of their income. So this certainly does not represent a shift from the middle class to the rich.
You can argue that it’s an overall tax increase rather than a cut I suppose, but the Democrats definitely don’t believe that. Maybe you could also argue that Reagan’s tax cut was actually a tax increase since it resulted in an increase in taxes collected.
But the rates are going down. The standard deduction is doubling. They are getting rid of the SALT deduction but that benefits the rich disproportionately. The only real argument that it increases the middle class burden is the elimination of the personal exemption. I suspect that’s not actually going to happen. But even if it does, it’s not going to fully offset the benefit of the rest of the provisions as far as the middle class is concerned. It might result in a small increase for some large middle class families though.
“Even if the elimination of the State tax deduction happened the vast majority of middle income Americans in those few high tax states would still come out ahead from the doubled personal exemption and lower rates at higher incomes.”
just not true.
so just as the cost of obamacare was being shouldered by all the healthy young people who had to sign up or pay a fine, this tax bill is being paid for by the average middle class taxpayer for the benefit of big permanent tax cuts for corporations and the wealthy. Touting this as a tax cut to all the middle class deplorables who elected Trump is the same as obama promising that you would save $2500 on your insurance premiums and could keep your doctor. This isn’t a tax cut, but a tax increase for the average American.
the standard deduction is being not quite doubled, but then they are eliminating the individual personal exemptions of $4050 for yourself, your spouse and your dependents. so they give with one hand but take away with the other. in addition, they are eliminating the extra deduction for those over 65 or blind.
if you take the standard deduction, you cannot then itemize; therefore, giving up the normal deductions for medical expenses, long term care insurance expenses, state and local taxes, property taxes [under the senate bill], mortgage interest deduction limits, student loan interest deductions, moving expenses, alimony, dependent care assistance accounts, casualty and theft losses, unreimbursed job expenses and tax preparation fees.
a further listing of credit and deduction eliminations:
“Exclusions and exemptions. The measure would repeal personal and dependency exemptions (which is $4,050 per individual in 2017), exclusions for employee achievement awards, employer education assistance, qualified tuition programs, dependent care assistance, qualified moving reimbursements, and adoption assistance. Contribution to Coverdell education savings accounts would be barred, but funds in existing accounts could be rolled over to 529 plans. Deductions. Certain deductions from gross income as well as itemized deductions would be eliminated. Deductions from gross income set to be axed include the alimony deduction (for divorce or separation agreements entered into after Dec. 31, 2017, student loan interest (although the Senate version would retain this deduction), interest on U.S. savings bonds redeemed for higher education, the moving expense deduction, the deduction for contributions to Archer medical savings accounts, out-of-pocket educator expenses, and expenses of performing artists and certain government officials. Itemized deductions on the chopping block include the medical expense deduction, state and local income or sales taxes, the casualty and theft loss deduction (except for casualty losses in federally-declared disaster areas), and miscellaneous itemized deductions for tax return preparation and unreimbursed employee business expenses. Tax credits. The bill would repeal the credit for the elderly and permanently disabled, the credit for mortgage certificates, and the credit for plug-in electric vehicles. The bill would eliminate the lifetime learning credit by consolidating it into the American opportunity credit. The credit would be available for five years of higher education (instead of four years), but the amount in the fifth year would half the usual maximum (including the amount eligible for the 40 percent refundable portion of the credit).”
Now look at its impact on the economic strata of taxpayers to see who benefits the most:
“...the highest-income taxpayers (0.1 percent of the population, or those with incomes over $3.7 million in 2016 dollars) would experience an average tax cut of nearly $1.1 million, over 14 percent of after-tax income. Households in the middle fifth of the income distribution would receive an average tax cut of $ 1,010, or 1.8 percent of after-tax income, while the poorest fifth of households would see their taxes go down an average of $110, or 0.8 percent of their after-tax income.”
Again, you are chewing on details that at this point are ASSUMPTIONS and nothing more.
Next, IF we focus in on the PROBABLES you both are still missing the boat.
Yes, there is a lowere business tax bracket, as there should be. This is how this is actually a jobs bill. From the SBA.gov of a few years back:
“Small businesses make up: 99.7 percent of U.S. employer firms, 64 percent of net new private-sector jobs, 49.2 percent of private-sector employment, 42.9 percent of private-sector payroll, 46 percent of private-sector output, 43 percent of high-tech employment, 98 percent of firms exporting goods.” Larger businesses will bring @ $3 TRILLION in capital that is currently held hostage overseas.
Decreasing business taxes WILL create more jobs. It is inarguable. My small business is one example. Want to benefit from that too? Easy. Start a business. Maybe you’ll hire some people too.
Regarding deductions vs. higher personal exemptions, MANY Americans, especially retired Americans can’t itemize now. This would be a big win for them. For others who can lower rates on higher income brackets will still be a big win.
Regarding home mortgage deductions, it will be negotiated (IMHO) to have a limit on the amount of mortgage debt interest that can be applied. $1 million and $500K are amounts that have been discussed. FEW “middle income” Americans have mortgage debt substantially higher than those amounts, and they will only miss the deduction for the overage.
The House bill has high income earners taxed at the SAME RATE as they do now. The Senate has an additional, even higher “ballon” bracket” starting at $1 million to negate the advantage of having a lower bracket and rate on the amounts under $1 million. The rich are, unfortunately, getting hosed. The only thing they get is elimination of the federal death tax and they have to die to get it.
The ones who will have to pay more in taxes, with few exceptions, will be Hollywood types who get paid multimillion via 1099 and own multimillion dollar homes in high taxed states like California. I shed no tears for them because that like high taxes anyway.
I would prefer a flat tax of 10% or 15% on EVERYONE with no deductions. This bill isn’t that. But it is not what you say it will be either.
Read my post again and tell what kind of tax bill I was supporting.
Your knee jerk reaction is misplaced.
You are totally correct. Posters who argue that a measly doubling of the standard deduction equals removing all the deductions and exemptions are either clueless or simply uninformed. It is a tax increase on two earners to pay for the corporate donors permanent tax cut. Paul ryan and lying kevin dirtbag brady both should be hung from lampposts. Another gop establishment scam. The gop voters never seem to learn how the dirtbags con them every year. Time and time again.
“And who gets this tasty tax cut? Yep, C corps. Big companies with lots of shareholders. That’s your business, right? Exactly. I haven’t known even one small business that is run as a C corp.”
Hello. Nice to meet you. Now you have. My small business has, for a variety of reasons, C Corp status. I have my own personal S Corp for my individual business as well. My partners and I own our office instead of renting so we have an LLC as well for the real estate.
I stand completely corrected and apologies to you for my lack of reading comprehension. You are correct. This tax bill is NOT the one that will bring big victories in November.
I believe our Kamikaze Republicans are ready to sacrifice their very political lives to protect The Swamp.
Seriously.
That’s why I want anything, ANYTHING, that will get us to November 2018 in a winning position.
Trump has smoked out so many of our enemies, most of them fly the Republican flag, that it’s staggering to think of how bad things are.
Some days it looks like Steve Bannon is his only ally.
Agree. Poor trump. He is so anxious for a legislative victory that he’s probably willing to sign practically anything at this point and that even assumes that he knows the establishment has been playing him for a fool on this tax reform . Ryan,mcconnel and dirtbags like brady are the real enemies of america. They would sell the country out to the globalist corporations in a heartbeat . They truly are anti-American .
They are eliminating the personal exemption, which largely negates increasing the standard deduction from $12,000 for single and $24,000 for married couples. In fact, eliminating the personal exemption has terrible consequences for many, many families.
The 'doubled standard deduction' in the GOP tax plan is a lie
I have to agree.
Middle class families and people who voted for Donald Trump who object to the Feds raising their taxes are "the swamp"?
Black is White. Up is Down.
Correct.
The massive tax cut of coroporations from 35% to 20% has to be "paid for." The middle class and upper middle class are getting the bill for that.
Oh - and the "evil" SALT deduction for corporations? Well, they get to keep it. They will still be able to deduct their property taxes, local taxes, and state taxes.
Exactly.
I don’t think ‘poor Trump’.
I believe God spent Trumps entire life preparing him for this battle. And he’s ready, willing, and enjoying every moment of it.
We truly are seeing ‘a Battle of Titans’, as in the days of yore, and I tell everyone to watch closely and to savor it.
History of gigantic proportions is being written in front of our very eyes.
Not many people have been so privileged as to see what we are witnessing.
The GOPe decided to pick "winners" and "losers."
The corporations and their rich donors are the designated winners. The losers have to pick up the tab.
http://www.businessinsider.com/chris-collins-donors-trump-tax-plan-bill-2017-11
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