The Trumpery Tax Plan

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The Trumpery Tax Plan

Post by T on Sat Dec 02, 2017 1:40 pm

Here's what I've been able to glean from various reports.  Regardless, it's not a done deal.  The House and Senate bills will need to be reconciled, which will result in further adjustments.
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There are seven brackets in today's individual tax code
10%
15%
25%
28%
33%
35%
39.6%

The House bill calls for four brackets
12%
25%
35%
39.6%

The Senate bill calls for seven brackets, but changes the rates on taxable income
10% (up to $9,525 individuals; up to $19,050 married couples/jointly)
12% (over $9,525 to $38,700; over $19,050 to $77,400 for couples)
22% (over $38,700 to $70,000; over $77,400 to $140,000 for couples)
24% (over $70,000 to $160,000; over $140,000 to $320,000 for couples)
32% (over $160,000 to $200,000; over $320,000 to $400,000 for couples)
35% (over $200,000 to $500,000; over $400,000 to $1 million for couples
38.5% (over $500,000; over $1 million for couples)

Eliminates personal exemptions
Currently you're allowed to claim a $4,050 exemption for yourself, spouse, and each dependent.
The Senate and House bills eliminate this exemption.

The House and Senate bills almost double the standard deduction
Single filers - increases it to $12,000 (currently $6,350)
Married couples filing jointly to $24,000 (currently $12,700)
[Note: This will drastically reduce the number of people who choose to itemize their deductions.]

Kills state and local income tax deduction, limits property tax break
Currently, people who itemize can deduct their property, state and local income, or sales taxes.
The Senate bill eliminates the state and local income or sales taxes deduction.
Property taxes may be deducted up to $10,000 (same as the House bill).
[Note: This will have a major impact on Maine residents]

Increases child tax credit
The Senate bill increases the child tax credit to $2,000 per child (currently $1,000)
The House bill increases the child tax credit to $1,600.
[Note: The lowest income families will not get the $1,000 increase if they don't owe federal income taxes.]

Mortgage interest deduction
The Senate bill - you can claim a deduction for mortgage interest up to $1 million.
The House bill caps the loan limit at $500,000 for new mortgages.
[Note: Since the House and Senate bills nearly double the standard deduction, the % of filers who claim the mortgage deduction will drop.]

Preserves the Alternative Minimum Tax
The final version of the Senate bill keeps the AMT in place but raises the amount of income exempt from it.
[Note: The AMT, originally intended to make sure Trump types pay at least some tax, currently the ATM typically hits filers earning between $200,000 and $1 million.]

Estate tax is preserved (but exempts almost everybody)
The Senate bill does not repeal the estate tax, but doubles the exemption levels (currently $5.49 million for individuals, $10.98 million for married couples).
[Note: At current levels, only 0.2% of all estates ever end up being subject to the estate tax.]

Increases teacher deduction
Currently, teachers who buy classroom supplies with their own money may deduct up to $250.
The Senate bill doubles that amount to $500.
The House bill eliminates the deduction.
[Note: It's ridiculous this deduction needs to exist. Why are teachers paying for supplies with their own money to begin with? Sad!]

Expands the medical expense deduction
Currently, itemizers may deduct their medical expenses that exceed 10% of their adjusted gross income.
The Senate bill keeps it but temporarily lowers that 10% threshold to 7.5% for tax years 2017 and 2018.
The House bill eliminates the deduction.

Repeals the ACA individual mandate penalty
This repeal is intended to help offset the cost of the tax bill.
Since people who qualify for subsidies will not be required to buy insurance, fewer will, and the government will spend less.
[Note: This will raise premiums because more healthy people will decide to not buy insurance. As with all insurance, when the risk pool shrinks, costs go up.]

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Re: The Trumpery Tax Plan

Post by T on Sun Dec 03, 2017 10:11 am

Under the Senate bill, the Joint Committee on Taxation and the Congressional Budget Office have calculated that by 2027, people making between $50,000 and $75,000 will pay $4 billion more in taxes, and people making $1 million or more will pay $5.8 billion less.

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Re: The Trumpery Tax Plan

Post by T on Thu Dec 07, 2017 7:58 am


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Re: The Trumpery Tax Plan

Post by T on Sat Dec 09, 2017 9:42 am


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Re: The Trumpery Tax Plan

Post by T on Sun Dec 10, 2017 4:29 pm

They're just "effing" liars.  It blows my mind that anyone, even Mary Jane Newell types, can believe the BS that comes out of Trumpery and Mnuchin's mouthes.  wall
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