Replies

In before the ZOT.

Reagan NEVER spoke the lie that debt was the result of his tax cuts. The economic activity that resulted from Reaganomics doubled the income to the Treasury. Congress, led by Tip O’Neill (in the House) created the debt by increasing spending exponentially.

The final tax bill isn’t finished yet and the Senate version hasn’t even been passed yet...let alone worked out in the reconciliation process. So the situation described in the article is nothing but pure conjecture. 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.

Take your lies someplace else.

Lies?

“The bill actually helps big business.
Yes, the proposed tax bill helps corporations, but not your type of corporation. One of the centerpieces of the tax plan is a corporate tax cut from 35 percent to 20 percent. Who doesn’t like a big fat tax cut like that? Sign me up.

Unfortunately, we didn’t get that.

Let’s get geeky for a sec: Most small businesses are run either as sole proprietorships (boo hiss, but that’s a column for another day), partnerships (ditto), S corporations (that’s me, and probably you, too), or Limited Liability Companies (LLCs.) Big corporations—the Amazons and Exxons of the world—are legally organized as C corporations.

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.

Oh, the bill also cuts taxes for multinational corporations on overseas earnings from 35 percent to 10 percent. I bet that describes your business for sure, right?

Maybe this helps: There is a small middle-class tax break, mostly coming from a doubling of the standard deduction. That assists you, right? Err, probably not. Many small business people itemize deductions instead of using the standard deduction. Drat! We almost had a winner.

Maybe there is a glimmer of hope here: One provision of the bill reduces the pass-through tax rate from 39.6 to 25 percent for some small-business owners. Which ones? Ah, there’s the rub. Under the proposal, many small-business owners are assumed to be exempt from the new, lower pass-through rate — people like lawyers, doctors, financial professionals, etc. Other small businesses can claim only 30 percent of their income under the new, lowers rate”

https://www.inc.com/steve-strauss/the-republican-small-business-tax-ruse.html

“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.”