$1.5 Trillion GOP Tax Cut Thread

[riceowl]

Ms. Capito proposes an amendment, #1393(To help provide tax relief to middle-class Americans by reducing deductibility for Federal tax purposes, of federal deductions, such as the state and local tax deduction which disproportionally favors high-income individuals). The amendment is adopted by a vote of 52-47.

Oh no.

[riceowl]

Maybe people in blue costal states should press state or local governments to reduce tax burden so they don't need deductions.

I'm from Texas y'all. Cruz and Cornyn should be all too aware of how high our property taxes are due to no state income tax. And yet here we are...

[riceowl]

Closeness of the vote makes me pretty confident some form of SALT deduction will remain in the final product.

[riceowl]

So the Dems are now defending a tax deduction that disproportionally favors the wealthy. Why would you do that when you could also vote for a tax cut that disproportionally favors the wealthy ?

It's actually not that incompatible. SALT is used more by middle- to upper-middle-income earners in these suburbs (and yes, the super rich, but the middle income earners outnumber the super rich in the beneficiaries group). This would likely still bring taxes up on people already highly taxed in those states while not closing any real loopholes and slashing income taxes across the board for every other bracket.

Anyway, why would a political committee not do this? Isn't the point of committees to win elections?

Right. Also, a cap on the SALT deduction wouldn't be a horrible idea, but getting rid of it would be so stupid. Texas doesn't even have a state income tax, but does have high property taxes. It's not commonly on the list of high-tax blue states. There are tons of people here that would be affected by that.

[riceowl]

Latest news is that under the GOP plan charities, mortgage interest and real estate taxes will stay as deductions but state and local income taxes will not.  401K deductions not clear.  The plan might raise the cap on how much one can contribute but lower the amount that one use to lower the taxable income.

But that's literally lowering the cap... The whole point of 401(k)s are to lower one's taxable income. Putting money in after tax is just a Roth IRA.

Also, no SALT is probably a deal breaker for at least 15 GOP members, not to mention keeping property tax deduction while ditching the deduction for income taxes inserts the heavy hand of the federal government into local financing decisions, pushing localities to favor a property tax instead of an income tax, which as illinois can attest, can have catastrophic impacts on the finances of a state in the event of another housing bubble / collapse in values.

Eh, it's what Texas has.

Anyway, I'm satisfied now selfishly. I'd like to see this reform favor the poor, but we all know that's not going to happen so!

[riceowl]

Don't like the implications on the deficit probably getting bigger but.....

do like the lower class tax cuts I would benefit from?

Guess I'm thinking more like the average voter on that 2nd one

What lower class tax cuts? Even the middle class tax cuts in this proposal are puny in comparison to the largess for the upper class.

Are you kidding me


If your taxable income is in between 38k-90k your tax rate will drop from 25% all the way down to 12% , and the rich do not get a tax cut(people making a million or more tax rate will still be 39.6%)

*if you're married, which no one on this forum will ever be*

It's actually really pissing me off how people only discuss married tax filer numbers on the shows and etc.

[riceowl]

Hey whyyyyyy is no one talking about the Johnson amendment repeal provision?

[riceowl]

Just a reminder: if you’re married and making under $260,000 annually, you get a tax cut or at least break even. Single and under $200,000, same deal.

I really don’t get why this is “cutting taxes for the millionaires and billionaires.”

Absolutely false. Senate bill raises my taxes $1-2000, and I make 85 a year. Next.

[riceowl]

Just a reminder: if you’re married and making under $260,000 annually, you get a tax cut or at least break even. Single and under $200,000, same deal.

I really don’t get why this is “cutting taxes for the millionaires and billionaires.”

Absolutely false. Senate bill raises my taxes $1-2000, and I make 85 a year. Next.

There must be something relatively special about your situation.   TX does not have state income taxes.  So if we plug 85K for AGI (which I think is an overestimate for you since you might have things like 401K or other above the line deductions.)   Assuming then one went with standard deduction filing as single in 2018, under current law the tax comes out to $14,228.75.  Under the House plan the 2018 tax comes out to $12,050.00 while under the Senate plan the tax comes out to $12,496.00.  Of course this is not to say you will not get a 1-2K increase.  It will depend on the circumstances. 

For example, if the real estate taxes you pay is 20K.  Then your 2018 tax under current law comes out to $10,866.25 while under the House plan the 2018 tax stays at $12,050.00 while under the Senate plan the tax stays at $12,496.00.  So there will be an increase of 1-2K. But it would unusual for someone with an AGI of 85K to own a house that has real estate taxes of 20K. It is possible but unusual.   

I take 18k in deductions, including 6k of property tax. The other 12 remain deductible but hey look at that the new standard is 12.

[riceowl]

There must be something relatively special about your situation.   TX does not have state income taxes.  So if we plug 85K for AGI (which I think is an overestimate for you since you might have things like 401K or other above the line deductions.)   Assuming then one went with standard deduction filing as single in 2018, under current law the tax comes out to $14,228.75.  Under the House plan the 2018 tax comes out to $12,050.00 while under the Senate plan the tax comes out to $12,496.00.  Of course this is not to say you will not get a 1-2K increase.  It will depend on the circumstances. 

For example, if the real estate taxes you pay is 20K.  Then your 2018 tax under current law comes out to $10,866.25 while under the House plan the 2018 tax stays at $12,050.00 while under the Senate plan the tax stays at $12,496.00.  So there will be an increase of 1-2K. But it would unusual for someone with an AGI of 85K to own a house that has real estate taxes of 20K. It is possible but unusual.   

I take 18k in deductions, including 6k of property tax. The other 12 remain deductible but hey look at that the new standard is 12.

Ok.  If so I agree you do lose under the Senate Plan.  For 2018 it goes from $11,366.25 to $12,496.00. But you should back the House plan which would put it at $10,600.00 and would be a reduction.

Of course lets agree that a deduction of 18K on an AGI of less than 85K is pretty unusual.

Sure. And I'd be ok with my taxes going up if I thought it was going to something helpful. Alas.