Politics New Tax Plan

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Denny Crane

Denny Crane

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https://www.nytimes.com/2017/09/28/...shield-tax-breaks-threatened-by-gop-plan.html

Lobbyists Rally to Save Tax Breaks Under Threat in Trump Plan

Opposition from the real estate industry was swift and vocal, with trade groups strongly criticizing elements of the plan that they say will make home-buying less attractive and weaken the housing market. While the plan specifically calls for preserving the mortgage interest deduction, real estate agents are warning that a proposal to double the standard deduction will make taxpayers less likely to itemize their tax returns and claim the mortgage deduction.​

Trump's financial empire is real estate industry. FWIW.

A proposal to limit the deductibility of corporate interest has prompted jockeying among powerful groups that rely on debt to help finance their operations, including real estate companies, private equity firms, financial companies and other businesses.​

...

The most politically fraught proposal is eliminating the state and local tax deduction, which allows taxpayers who itemize to write off their property, state and local taxes. The measure is particularly prized in blue states with high property taxes, but is also widely used in some Republican districts in Virginia, New Jersey and California.

Eliminating the deduction, which the real estate industry also opposes, would save more than $1 trillion over a decade and make room for the tax cuts. But Republican members of Congress in affected states have already expressed concern about the provision, and a plan that repeals the deduction could be impossible to pass.​

Trump's financial empire is real estate industry.
 
Yeah, let's run the nation by lobbyists.

How about, let's not.
 
Haven't read all of the updates from yesterday but...... not a fan of this tax reform.

Poor people win. Rich people win.

Middle class will get fucked.
 
Seems like those with really expensive houses in California won't get to write off their property tax (nor will Trump with his NYC properties, and others).

In my case, the doubling of the personal deductions is far greater than my property tax, so I win. I'm not poor nor rich.

FWIW
 
JFizzleRaider said:
Haven't read all of the updates from yesterday but...... not a fan of this tax reform.

Poor people win. Rich people win.

Middle class will get fucked.
Click to expand...

Doesn't that depend on whether you are a middle class guy that hires a tax man or you are one?
 
JFizzleRaider said:
http://www.msnbc.com/rachel-maddow-...antee-middle-class-wont-face-tax-increase/amp

Team Trump can't 'guarantee' middle class won't face tax increase
Click to expand...

You have to look at what was said. The headline is misleading.

Cohn said that you might find an exception to the rule that someone in the middle class will face a tax increase.

Like you said, the poor will make out. They get to pay no taxes at all. Over 10M going from 10% bracket to 0%. Those left at the bottom paying the 12% are getting a cut from their current 15% or 25% bracket.


trump%20taxes.png
 
JFizzleRaider said:
I did read it. Read the 2nd link i posted.

He said there may be exceptions because he is a politician.

The facts are that MANY middle class end up paying more. If you knew the ins and outs of the tax code you would understand.

I work in taxes and everyone i know that works in taxes knows the middle class get fucked.
Click to expand...

upload_2017-9-29_9-3-15.png

The red arrows are the "middle class" who pay more.

If you make $225K, you're not exactly poor.
 
FWIW, those making $250,000+ are top 5% of earners. Is that "middle class" ?
 
Denny Crane said:
View attachment 16359

The red arrows are the "middle class" who pay more.

If you make $225K, you're not exactly poor.
Click to expand...
You can put as many graphs as you want.

Read that 2nd link. That is exactly how many scenarios play out.

Know the mechanics of the tax code and you'd agree.

Middle class people that own homes will end up paying more.
 
From my OP, I specifically included this part because it affects people who own real estate - especially in states with high priced real estate.

upload_2017-9-29_9-14-58.png
 
From your 2nd link:

This is why Trump's plan greatly increases Ann and Bob's taxable income — currently, they pay tax on less than $83,000 of their income, but under Trump's approach they'd be taxed on $96,000. That's why their tax bill would go up.

What I don't think they figured in is the change in brackets. If you pay 25% of $83,000 but 15% of $96,000, which is more? Granted, the tax is additive (12% on first $18,500, etc.)
 
Simplistic, sure. Family of 2, $150K income, $400K home with 20% down payment, 1.25% property tax. 30 year mortgage at 4%.

upload_2017-9-29_9-59-2.png
 
Last edited:
Obviously this is all hypothetical until it gets finalized.

Increased taxable income is bad.

I will admit there are scenarios depending on where the brackets end up that could be beneficial to some middle class. But we don't know where that ends up.

I find it incredibly hard to believe that lower taxes for the rich and poor ends up equaling less taxes for the middle class too.

We shall see.
 
Seems to me that the biggest issue would not be the change in incremental rates or the question of itemized vs standard deductions, but the elimination of the personal exemptions--which isn't figured into Denny's 'simplistic' chart.
 
I'm not at all sold on the plan.

My preference is one tax bracket, or a sales tax. So fewer brackets spread really far apart is better than lots of brackets close together.
 
JFizzleRaider said:
Doesn't even include possible mortgage points, charitable contributions, medical expenses, SALT etc.
Click to expand...

I said it's simplistic. The big component of SALT (property tax) is included in my calculations, no? Property Tax Deduction row.
 
Denny Crane said:
I'm not at all sold on the plan.

My preference is one tax bracket, or a sales tax. So fewer brackets spread really far apart is better than lots of brackets close together.
Click to expand...
So you want someone barely scraping buy paying the same amount as Bill Gates.

Makes sense.
 
JFizzleRaider said:
Lol that just shows your chart sucks.

Those people would still itemize on the right side.
Click to expand...

Why itemize if you save money by not doing so? I think people do the tax both ways and choose the lesser tax to pay.

It really depends on the effective tax rate.
 
JFizzleRaider said:
So you want someone barely scraping buy paying the same amount as Bill Gates.

Makes sense.
Click to expand...

Bill Gates would pay 20% (or whatever the tax is) on all the money he spends, borrowed or not. That will be a shit pile of cash compared to someone scraping by.
 
Denny Crane said:
Why itemize if you save money by not doing so? I think people do the tax both ways and choose the lesser tax to pay.

It really depends on the effective tax rate.
Click to expand...
......

If you have a mortgage interest deduction and property tax deduction larger than the standard, you itemize.
 
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