Posted on 12/04/2017 9:27:32 PM PST by Oshkalaboomboom
Whenever I'm asked if the Trump tax cut is for the rich, I say yes. It is a tax cut for the rich. It is a tax cut for the middle class. It is a tax cut for small businesses. It is a tax cut for the Fortune 100. If you pay federal income taxes, you will, in almost all cases, be getting more take-home pay come Jan. 1.
One of the ironies of the left's "these are tax cuts for the rich" mantra is that many upper-income people I know in states such as California, New Jersey, and New York complain to me they are getting a sizable tax increase. The lower income-tax rates don't compensate for the loss of the state and local tax deductions.
Well, yes, under the Trump tax plan we are no longer going to subsidize big government in blue states. Now those who choose to live in blue states are going to have to join with their neighbors, collect their pitchforks and demand tax and spending cuts from city hall and the state capital.
Here's some advice to blue state pols: Pare the hyper-extravagant pensions, and stop paying your government employees 30 percent more than comparable private-sector workers get.
Liberals from blue states argue that red states tend to get more money from the feds and pay less in taxes. But here again, blue state voters are the ones responsible for these inequities. Blue staters tend to send liberal politicians to office, who then vote for bigger federal spending -- even though a greater share of the money goes to the red states. Maybe somebody needs to write a book called: "What's the Matter With Massachusetts."
What is not true is that the rich get all the benefits of the tax cut and middle-income families pay more.
CATO scholar Chris Edwards recently put the lie to that claim. He examined the impact of the tax bill on the average tax filer in every income group with an income above $40,000. He didn't include people who make less than that because very few in that income range have any income tax liability -- and you can't cut taxes on people who don't pay taxes.
Edwards' remarkable analysis showed that as family income levels go up, the percentage reduction in tax burden goes down: Lower-middle-class people -- who make between $40,000 and $50,000 a year -- will see a 46 percent reduction in taxes paid; people who make more than $1 million will see roughly a seven percent reduction in taxes (again, the exact rate depends on what state they live in).
By the way, the left also leaves out another impact of the tax cut that helps the middle class: a higher stock market. Some 54 million Americans have 401(k) plans. At least another 40 million have IRAs or pension plans. Where do you think that money is invested? Americans should look at their 401(k) accounts right now. They are surging in value in anticipation of the tax cut.
This has contributed to a surge of economic optimism and Christmas shopping and spending. You want to kill the economy -- and Christmas? Follow Chuck Schumer and Nancy Pelosi's advice and kill the tax cut.
That's not likely to happen. There is a high likelihood this tax cut will be enacted before Christmas. My friend Arthur Laffer says that he hopes taxes go up for everyone next year -- because Americans are going to be making a lot more money as prosperity spreads to every state. Talk about a happy New Year.
I see if that way. If one group pays more they are covering those that pay less. Just like with social security payments - those paying in the most get a smaller percentage back and they subsidize those paying less who get all of their money back plus extra.
Those getting the EIC credit are subsidized by those actually paying taxes.
The issue of state taxes is unrelated to federal tax. They should each stand separate, particularly so blue states are forced to take responsibility for over taxing their citizens.
Half of that is from me!
Screw you! I’d bet we pay more in taxes than most on this board.
It’s likely that small increase is the standard deduction (taking into account the loss of the personal exemption) wasn’t enough to cover your SALT.
Sorry about that.
Unfortunately the RINOs are too cowardly to stand up to the democrats, so they increased taxes on some. A simpler across the board cut would’ve been better.
Then we need to remove the new deduction for private school tuition.
I would be happy with the personal exemption change.
If you “deficit hawks” think that raising the top marginal rates, limiting deductions, eliminating exemptions, and lowering the bottom marginal rates will INCREASE federal revenue and close the deficit gap then you are crazy. Federal revenue increases year over year anyway and would have without this “reform”. The only time federal revenue deceases year over is year is when GDP is less than 1.5%. So this is just a punitive tax reform.
RE: Tax Plan Is a Cut for Everyone
No it isn’t. Not to those who live in NY, NJ, CT and CA.
It’s a screw these 4 states and those who invest their money in developing real estate bill.
“From what I have read, it starts in 2018. I can’t wait to lose $600-900 next year.”
How do I know, without looking, that you would be a FR non-Contributor? Too broke to send 10$?
More money in the hands of the people is a good thing. Less money in the hands of bureaucrats in the bloated federal government is good thing.
Can we have more tax cuts? How about reduction in property taxes around the country?
JoMa
I am completely ignoring state income taxes, which I estimate will be less than $1,000 for us next year. What's dinging us is the loss of the deduction for medical expenses.
The premiums for an under 65 retiree plan plus Medicare, Medicare supplemental, and Plan D. along with minimum expected costs, is estimated to be over $12K. The deductible part of that expense, plus nearly $10K in property taxes, plus the mortgage interest (last third of the loan) doesn't get us to $24K.
Under the current plan, when the personal exemption is added in, we end up with a bit over $9K more in deductions. Even with the higher tax rates, we would still end up with $600-800 more in our pockets.
Retiree couples from high property tax states, like California, New York, Texas, Florida, etc., very well will see less money next year.
The Swamp is a master of phraseology to keep the money coming in. Tax Cuts without Spending Cuts = Deck Chair Shuffling.
“What’s dinging us is the loss of the deduction for medical expenses.”
Yeah, they should not have messed with that. I can see the validity of not mingling state and federal taxes, but the medical deduction? There’s no excuse for taking that one away. When people have high medical bills, it’s the only thing that can help them. And these days - a lot of us have high medical bills! Medical costs are outrageous. No matter what state you are in. This could ding people anywhere.
Did they add that in?
Interesting.
Well, parents sending kids to private school are forced to still pay taxes to the local schools that are just freebies for the state. But that is a state issue, so the deduction should go there.
There are far too many games being played in taxes, trying to influence people’s choices by punishing or rewarding them. My choice is a flat tax.
I’m sure that was a joke.
If you’re in Mexifornia, you likely pay a lot. I escaped there 2 years ago and cannot believe my property taxes here! (Although our sales tax is outrageous, if that helps you feel any better).
Those in the high tax Blue states like CA, NY & NJ are 65% liberals and liberals don’t like to pay taxes, they will move and infect the no/low Red tax states.
Two high tax Blue states of Michigan & Wisconsin, just went for Trump, probably won’t again
Then I guess they can vote for a Democrat who will lower their taxes. That’s what they think.
Just to be clear, you can still deduct medical expenses (I think it is being discussed as anything over 7.5% of AGI (current it's anything over 10% of AGI).
The problem is most retirees are not going to hit the standard deduction at $24K, so those excess medical expenses are effectively not a write-off any more.
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