Posted on 12/02/2017 2:44:33 PM PST by Jim Robinson
Edited on 12/02/2017 2:54:27 PM PST by Jim Robinson. [history]
Updated.
I calculated federal income taxes for two hypothetical working class couples filing jointly under the new senate proposal compared to current law, taking the standard deduction in each case (see the pdf at source).
The first working class family has a combined income of $100,000 and if my calculations are NOW correct would owe $10,948 in federal income taxes under current law with an effective tax rate of 10.9%.
Under the senate proposal, this family's federal income tax would be cut to $8,739 with an effective tax rate of 8.7%. This is a substantial tax cut.
The second working class family has a combined income of $60,000 and would owe $4,948 in federal income taxes under current law with an effective tax rate of 8.2%.
Under the senate proposal, this family's federal income tax would be cut to $3,939 with an effective tax rate of 6.6%. This is a very substantial tax cut.
The tax cuts are even more dramatic if these families have children and can take the $1650 tax credit per child (compared to the $1000 per under current law).
If each of these working class families above have two children they get a tax credit of $1650 X 2
So the family earning $100,000 gets $3300 credit leaving a tax bill of $5,439 or 5.54% eff rate.
The family earning $60,000 gets $3300 credit leaving a tax bill of $639 or 1.4% eff rate.
Very substantial cuts!
Working class families with two children, earning $55,000 or less owe no federal income tax at all.
This will allow the vast majority of "working class" families to receive a substantial tax cut by simply taking the standard deductions.
“They should be proud they pay the most.”
Yeah, Chuck and Nancy can do it...for the children.
and how about the millions of middle class and small businesses that won’t be fined - have $$$ money stolen from tax returns - for not having Obama Care?
No one’s mentioning that...
He's pretty good at that...
(Hopefully he will blindside them)
So, you know what you have to do...reserve the U-Haul.
I addressed it. I’m not for raising taxes on anyone, wherever they live. Tax raising is supposed to be Democrat thing. Republicans are supposed to cut government , not the family budgets of citizens. But the Republicans in Congress have forgotten that. A lot of Freepers have, too
Thanks Jim!!!
I ran my numbers with one of the calculators out there and got a fair reduction in taxes owed - most who carp and wring their hands have read a lot of crap and never done anything to actually check for themselves.
Read #106
This is why this nearly 500 page “tax reform” law is really “deduction reform”. For millions of individual taxpayers it puts a nickel in your left pocket then takes a dime out of your right pocket.
It’s overly complicated, picks winners and losers, smells of crony lobbyist corruption, and fails the campaign promise of cutting taxes for all. It’s phoney tax reform. Just like the phoney Obamacare “repeal” crap Congress was pushing a few months back.
Trump's tax reform HAMMERS me even more.
I don't get any relief as a high income earner and in fact, I lose deductions I have today because I live in Illinois.
I've already had this conversation with my financial planner. I know what I'm talking about here.
The fact that some people keep falling for the Democrat "working class family" bullshit here on FR really irritates me.
Where are TAX CUTS for EVERYONE? True REAGAN STYLE TAX CUTS?!
They don't exist in this legislation. Period. Full Stop.
These are NOT tax cuts, they're political carve-outs that simply mean more people pay less / nothing and fewer people (like me) pay more for the rest.
That's not tax reform! Those aren't tax cuts!
LOL, my fault for trying to make sense of an illogical statement.
You made so sense at all. Ok some that pay no income tax pay sales tax. We all pay sales tax.
So what?
You’re not making a point just throwing out liberal talking points.
What EXACTLY is your point, using different words? Repeating the same illogical, unconnected statement isn’t good enough to warrant a reply from me. You seem to hold firm to it as if you think it brilliant or can’t think of any way to explain yourself in a way that makes sense.
You post is true but irrelevant!!!
Congress can’t lower state taxes, again if you don’t pay”income tax” you can’t get an “income tax cut”!!!
Yeah I’m not saying it’s perfect. It doesn’t simplify our tax code. But I don’t hate it either. And I’m not caring if I pay more or less, but if it gets companies back on US soil, it accomplishes one great thing.
It does seem to selectively punish blue states. Whether by design or chance, I don’t know. But taking the issue of state taxation out of federal calculations is a good thing - states need to stand on their own without relying on federal deductions. In an odd twist, those in red states have been subsidizing blue by paying the full amount of federal tax owed because those in blue states (ie, heavily taxed) get their federal income taxes reduced because of those state taxes. They are separate issues and should never have been combined.
President Trump isn’t responsible for you alimony. If Illinois is unfair you should have moved...or were you ambivalent when it was happening to some one else. Tax and spend states are permitted by voters who agree with their policies. The rest of the country should not have to subsidize socialism!!!
The cash cow are the individual taxpayers who account for 80% of federal taxes between direct income taxes and FICA. This part of the plan is what I'm critical of. Both houses of Congress are playing games with deductibles, exemptions, limits, caps, etc. that are not what anyone ran on in 2016. Keep it simple. Reduce all tax brackets. It takes 1-2 pages of legislation - not 500.
Of course he's not. That's my own stupidity for ever getting married in the first place.
He and the Republicans WILL however be responsible for massive tax hike that's going to be imposed on MILLIONS and MILLIONS of people living in states such as mine, many of us who voted for him in 2016.
BTW: your "argument" that your state subsidizes my state has been debunked here dozens of times here on FR already. Illinois sends 40 BILLION more in FedGov tax revenue than it gets back. That means the state I live in, which is #47 on the list of states who get their money back from the FedGov is subsidizing the state YOU live in.
Pay your fair share, moocher!
Our RINO congress doesn’t have the courage to drastically cut taxes across the board. They play games with ‘paying’ for any cuts because they will never reduce spending.
Just as they will never repeal Obamacare or build the wall.
It’s guillotine time.
But I digress. I do agree with you.
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