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.
I didn’t run one for single, but doubt that very much.
No I don’t admit that. Haven’t run the spread sheets, but the rates are down in each bracket. If you want to give me your numbers, I’ll run it.
Maybe in california. Not for those of us that already don’t itemize.
And they eliminate the individual mandate!!!
Fact of the matter is”if you don’t pay taxes, you can’t get a tax cut” !!!
Advice for young couples — try to live “below your means” and not in a MacMansion. And have more kids. “Make do!” Hand-me-down clothes build strength of character. America will be stronger and better if our young people are more like this.
You shouldn’t post stuff like that - JR may hear about it. (LOL)
We’re supposed be angry as hell about these tax cuts...at least that’s how it seems.
I’ve seen some folks argue that it just ain’t so..
To such a degree that it all becomes confusing.
Me, I’ll trust Trump about it before some self-proclaimed smart people.
Trump didn’t make billions by being stupid about money.
I must be crazy.
I just got a check for $13,000 and IRC Feds took $2k.
Ain’t 10%.
And! Whoever that MotherFICA is, I swear I’m gonna accidentally run into him with a shiv about 10-20 times...
“Advice for young couples — try to live “below your means” and not in a MacMansion. And have more kids. “Make do!””
What are you, some kind of HERETIC? If they don’t buy the McMansion, idiot, then they won’t be able to write off the taxes and mortgage on it, and thus they will be poorer!!!
(just making a point about how tax policy makes dumb people do stupid things)
OK, let’s take an example — husband: 90,000; wife: 70,000. — so 160,000 joint. In California, that’s middle class.
For every dollar above around 70,000, they’re paying a 9.5 percent at state level in California, right?
What’s the difference in federal taxes if they can’t deduct that heavy sum paid to the state?
Remember, they are also deprived of the personal exemptions (totaling 10,400), under the new tax bill.
Hard for me to believe their federal taxes aren’t going up. That’s the whole point of getting rid of the state and local tax deductions - to raise revenue in order to offset the business tax cuts.
I think you’re falling for the GOP talking points that “average” taxpayers will get their taxes reduced. Your examples look simple enough. But the Senate bill is almost 500 pages. God only knows what was added/subtracted at the last minute.
Since individuals pay taxes not “averages” you need to factor in the loss of deductions like long-term medical expenses, SALT, mortgage interest, adoption credits, and others. Throw in the loss of one of these exemptions and your examples fall apart.
One has to ask oneself why a simple tax cut bill needs 500 pages and talks three lawyers to read and understand? The goal was simple rate reductions. Like the Obamacare bill, Congress loaded this thing with crony attachments to satisfy one interest or another.
We should demand more from a party that has full control of the federal government.
If they're earning 60K to 100K, the larger standard deduction probably means they wouldn't have enough to itemize anyway.
The numbers are what they are. The “Working class” people are getting tax cuts. The democrats are claiming ALL the cuts go to the rich. Well, the rich pay the most in taxes, so they probably will get pretty good tax cuts, but so will the 90 some odd percent of us who aren’t rich.
Within the specified income brackets, they probably are not itemizing.
And not stated: the death of the individual mandate penalty will give a lot of people a major boost.
AGI=65000
new standard deduction = 12000 (I don't know if they increase it for over 65 or blind)
taxable income = 53000
22% tax bracket, so you pay 4453.5 + (53000-38700)x22%= $7599.50
My current itemized deduction + exemption is greater than the new standard deduction, so I lose out there. The only thing bringing down my taxes is the reduction in rates. I figure my savings would be about $1600 from what my 2017 taxes will be. (I had just spent an hour making an estimate of my fed and state taxes to see if I will get a refund or owe, so I had all my current numbers in a spreadsheet).
The party has control, but the establishment has control of the party. "Everyone" in the party wanted Obamacare gone, but only took three establishment RINOs voting with the dems to torpedo all attempts.
It's a miracle that this bill has advanced as far as it has.
I currently pay about $1200, so $3-4K is not out of the question.
The calc for a single man making $140k in CA with a $400k mortgage and paying alimony really sucks though.
Bigly.
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