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Started By
Message
re: Trump Tax Plan Thread - Stream is over (Cliff's in OP)
Posted on 4/26/17 at 5:09 pm to imjustafatkid
Posted on 4/26/17 at 5:09 pm to imjustafatkid
quote:Well I certainly don't think providing the income cutoffs for your brackets is asking too much.
Exactly how complicated do you want tax law to be?
1
Posted on 4/26/17 at 5:14 pm to Iosh
Yeah the bands on those brackets are pretty important.
Posted on 4/26/17 at 5:31 pm to elposter
Going to do a comparison for a low income family making $50,000/yr as a married couple between Obama's existing tax plan and Trump's new proposed tax plan.
Under Obama's existing tax plan:
Standard deduction = $12,600 - leaves $37,400 taxed (progressively)
1. $0-$18,550 @ 10% = $18,550 x .10 = $1,855 ($37,400-$18,550 = $18,850)
2. $18,551-$75,300 @ 15% = $18,850 x .15 = $2,828
Total tax paid = $4,683 (about 9.4% overall tax rate)
Under Trump's newly proposed plan (assuming he's using the brackets he proposed originally during his campaign):
Standard deduction = $24,000 - leaves $26,000 taxed (progressively)
1. $0-$75,000 @ 10% = $26,000 x .10 = $2,600
Total tax paid = $2,600 (about 5.2% overall tax rate)
That's a big tax cut (-$2,083). Nearly a 45% reduction and around $174/month for a typical low income family making $50k/yr.
=============================================
Now let's look at a middle class family making $150,000/yr as a married couple.
Under Obama's existing tax plan:
Standard deduction = $12,600 - leaves $137,400 taxed (progressively)
1. $0-$18,550 @ 10% = $18,550 x .10 = $1,855 ($137,400-$18,550 = $118,850)
2. $18,551-$75,300 @ 15% = $56,749 x .15 = $8,512 ($118,850-$56,749 = $62,101)
3. $75,301-$151,900 @ 25% = $62,101 x .25 = $15,525
Total tax paid = $25,892 (about 17.3% overall tax rate)
Under Trump's newly proposed plan (assuming he's using the brackets he proposed originally during his campaign):
Standard deduction = $24,000 - leaves $126,000 taxed (progressively)
1. $0-$75,000 @ 10% = $75,000 x .10 = $7,500 ($126,000-$75,000 = $51,000)
2. $75,001-$225,000 @ 25% = $51,000 x .25 = $12,750
Total tax paid = $20,250 (about 13.5% overall tax rate)
That's a pretty significant tax cut (-$5,642). Nearly a 22% reduction and around $470/month for a typical middle class family making $150k/yr.
=============================================
Now let's look at a family making $500,000/yr as a married couple.
Under Obama's existing tax plan:
Standard deduction = $12,600 - leaves $487,400 taxed (progressively)
1. $0-$18,550 @ 10% = $18,550 x .10 = $1,855 ($487,400-$18,550 = $468,850)
2. $18,551-$75,300 @ 15% = $56,749 x .15 = $8,512 ($468,850-$56,749 = $412,101)
3. $75,301-$151,900 @ 25% = $76,599 x .25 = $19,150 ($412,101-$76,599 = $335,502)
4. $151,901-$231,450 @ 28% = $79,549 x .28 = $22,274 ($335,502-$79,549 = $255,953)
5. $231,451-$413,350 @ 33% = $181,899 x .33 = $60,027 ($255,953-$181,899 = $74,054)
6. $413,351-$466,950 @ 35% = $53,599 x .35 = $18,760 ($74,054-$53,599 = $20,455)
7. $466,951+ @ 39.6% = $20,455 x .396 = $8,100
Total tax paid = $138,678 (about 27.7% overall tax rate)
Under Trump's newly proposed plan (assuming he's using the brackets he proposed originally during his campaign):
Standard deduction = $24,000 - leaves $476,000 taxed (progressively)
1. $0-$75,000 @ 10% = $75,000 x .10 = $7,500 ($476,000-$75,000 = $401,000)
2. $75,001-$225,000 @ 25% = $149,999 x .25 = $37,500 ($401,000-$149,999 = $251,001)
3. $225,001+ @ 35% = $251,001 x .35 = $87,850
Total tax paid = $132,850 (about 26.6% overall tax rate)
That's a pretty minor tax cut (-$5,828). About 4% reduction in taxes paid and an overall 1.1% difference between the two plans for the wealthy.
But of course the Left will spin this to make it sound like the lower and middle class are getting tax hikes while the wealthy are getting tax cuts. Just watch.
Under Obama's existing tax plan:
Standard deduction = $12,600 - leaves $37,400 taxed (progressively)
1. $0-$18,550 @ 10% = $18,550 x .10 = $1,855 ($37,400-$18,550 = $18,850)
2. $18,551-$75,300 @ 15% = $18,850 x .15 = $2,828
Total tax paid = $4,683 (about 9.4% overall tax rate)
Under Trump's newly proposed plan (assuming he's using the brackets he proposed originally during his campaign):
Standard deduction = $24,000 - leaves $26,000 taxed (progressively)
1. $0-$75,000 @ 10% = $26,000 x .10 = $2,600
Total tax paid = $2,600 (about 5.2% overall tax rate)
That's a big tax cut (-$2,083). Nearly a 45% reduction and around $174/month for a typical low income family making $50k/yr.
=============================================
Now let's look at a middle class family making $150,000/yr as a married couple.
Under Obama's existing tax plan:
Standard deduction = $12,600 - leaves $137,400 taxed (progressively)
1. $0-$18,550 @ 10% = $18,550 x .10 = $1,855 ($137,400-$18,550 = $118,850)
2. $18,551-$75,300 @ 15% = $56,749 x .15 = $8,512 ($118,850-$56,749 = $62,101)
3. $75,301-$151,900 @ 25% = $62,101 x .25 = $15,525
Total tax paid = $25,892 (about 17.3% overall tax rate)
Under Trump's newly proposed plan (assuming he's using the brackets he proposed originally during his campaign):
Standard deduction = $24,000 - leaves $126,000 taxed (progressively)
1. $0-$75,000 @ 10% = $75,000 x .10 = $7,500 ($126,000-$75,000 = $51,000)
2. $75,001-$225,000 @ 25% = $51,000 x .25 = $12,750
Total tax paid = $20,250 (about 13.5% overall tax rate)
That's a pretty significant tax cut (-$5,642). Nearly a 22% reduction and around $470/month for a typical middle class family making $150k/yr.
=============================================
Now let's look at a family making $500,000/yr as a married couple.
Under Obama's existing tax plan:
Standard deduction = $12,600 - leaves $487,400 taxed (progressively)
1. $0-$18,550 @ 10% = $18,550 x .10 = $1,855 ($487,400-$18,550 = $468,850)
2. $18,551-$75,300 @ 15% = $56,749 x .15 = $8,512 ($468,850-$56,749 = $412,101)
3. $75,301-$151,900 @ 25% = $76,599 x .25 = $19,150 ($412,101-$76,599 = $335,502)
4. $151,901-$231,450 @ 28% = $79,549 x .28 = $22,274 ($335,502-$79,549 = $255,953)
5. $231,451-$413,350 @ 33% = $181,899 x .33 = $60,027 ($255,953-$181,899 = $74,054)
6. $413,351-$466,950 @ 35% = $53,599 x .35 = $18,760 ($74,054-$53,599 = $20,455)
7. $466,951+ @ 39.6% = $20,455 x .396 = $8,100
Total tax paid = $138,678 (about 27.7% overall tax rate)
Under Trump's newly proposed plan (assuming he's using the brackets he proposed originally during his campaign):
Standard deduction = $24,000 - leaves $476,000 taxed (progressively)
1. $0-$75,000 @ 10% = $75,000 x .10 = $7,500 ($476,000-$75,000 = $401,000)
2. $75,001-$225,000 @ 25% = $149,999 x .25 = $37,500 ($401,000-$149,999 = $251,001)
3. $225,001+ @ 35% = $251,001 x .35 = $87,850
Total tax paid = $132,850 (about 26.6% overall tax rate)
That's a pretty minor tax cut (-$5,828). About 4% reduction in taxes paid and an overall 1.1% difference between the two plans for the wealthy.
But of course the Left will spin this to make it sound like the lower and middle class are getting tax hikes while the wealthy are getting tax cuts. Just watch.
Posted on 4/26/17 at 5:43 pm to BeefDawg
It depends on what AGI ends up getting defined as. In some ways what was outlined and talked about today is pretty smart. I suspect the elimination of state tax deduction is going away. I suspect c-corp will be lucky to get to 20%, and pass through lucky to get to 25%.
Not tinkering with specific elimination of deduction, or releasing the income brackets allows all the criticism to be brought, and allows them to figure out what they can get passed. Which will likely be a reduction in rates, and some minor tinkering with income brackets.
So, as an example, look at what has already been discussed on here. No detail, blah, lah blah. It's already working, and I believe all it takes is a simple majority in the Senate. An elected official told me two things long ago. If you get 50% of what you want, and prevent stupid stuff from happening, it's about the best you can expect. He also said, never tell the anything, they're all idiots.
eta, Whatever happens will also impact MAGI, which in turn impacts ROTH IRA eligibility. Not exactly a small consideration. I mentioned it on here before, those that favored the House Plan, and argued it was largely the same as Trump's various outlines were first incorrect, and second were going to be surprised when they found out what they'd be paying, and saw the impact on their ROTH eligibility.
Not tinkering with specific elimination of deduction, or releasing the income brackets allows all the criticism to be brought, and allows them to figure out what they can get passed. Which will likely be a reduction in rates, and some minor tinkering with income brackets.
So, as an example, look at what has already been discussed on here. No detail, blah, lah blah. It's already working, and I believe all it takes is a simple majority in the Senate. An elected official told me two things long ago. If you get 50% of what you want, and prevent stupid stuff from happening, it's about the best you can expect. He also said, never tell the anything, they're all idiots.
eta, Whatever happens will also impact MAGI, which in turn impacts ROTH IRA eligibility. Not exactly a small consideration. I mentioned it on here before, those that favored the House Plan, and argued it was largely the same as Trump's various outlines were first incorrect, and second were going to be surprised when they found out what they'd be paying, and saw the impact on their ROTH eligibility.
This post was edited on 4/26/17 at 5:46 pm
Posted on 4/26/17 at 5:44 pm to Bard
I don't think I have ever seen a tax plan that is so blatantly racist...
Posted on 4/26/17 at 5:49 pm to BeefDawg
quote:
That's a pretty minor tax cut (-$5,828). About 4% reduction in taxes paid and an overall 1.1% difference between the two plans for the wealthy.
You have to remember, that by eliminating many of the deductions, Buffy doesn't get to deduct her decorating, errr home improvements, Biff doesn't get to deduct his home office and car, and they don't get to deduct their vacations, errr, business trips to Vegas.
So they probably will end up paying more.
Posted on 4/26/17 at 5:54 pm to Jax-Tiger
quote:
You have to remember, that by eliminating many of the deductions, Buffy doesn't get to deduct her decorating, errr home improvements, Biff doesn't get to deduct his home office and car, and they don't get to deduct their vacations, errr, business trips to Vegas.
So they probably will end up paying more.
That's why nothing I have involves itemized deductions. It's a baseline to show an actual accurate comparison between the two tax plans.
Posted on 4/26/17 at 5:58 pm to Jax-Tiger
What gives you the idea that business trips would no longer be deductible? A proposed elimination of a personal tax deduction? You don't think if it is a legitimate business trip, a business owner will just report less business income, and the trip would be expensed on his business return?
Biff and Buffy are going to be o.k. As will anyone able to maneuver.
Biff and Buffy are going to be o.k. As will anyone able to maneuver.
Posted on 4/26/17 at 5:59 pm to Bard
quote:
---Taking current 7 tax brackets and reducing them to 3: 10%, 25% & 35% (income ranges to be determined)
quote:
----Eliminating most tax breaks (home ownership/mortgage interest & charitable giving excluded)
This combination could be pretty bad for middle class depending on how the brackets shake out. I am glad mortgage interest is still a deduction though. That would have buttfricked home owners.
Posted on 4/26/17 at 6:31 pm to BeefDawg
quote:
That's why nothing I have involves itemized deductions.
I understand that, but only the new plan eliminates all but a few deductions. So it is not really a fair comparison to compare the baseline, since anybody who has a lot of income will pay some smart people to find as many possible deductions as they can.
The baselines are close, but if they maximize their deductions under both plans, the new one will, in all likelihood, result in them paying more taxes.
Posted on 4/26/17 at 7:13 pm to Jax-Tiger
So reading the scenarios above it looks like I get another $6k a year?
Use standard deduction. Married with 2 little ones. Our combined income is basically 150k.
My wife will love this. It basically pays for a Disney trip or another vacation every year.
Use standard deduction. Married with 2 little ones. Our combined income is basically 150k.
My wife will love this. It basically pays for a Disney trip or another vacation every year.
This post was edited on 4/26/17 at 7:27 pm
Posted on 4/26/17 at 7:20 pm to TigerFanatic99
So Trump basically went to his accountants and asked what changes would be most helpful to himself? Because that's what a lot of this shite looks like.
Posted on 4/26/17 at 7:25 pm to montanagator
84% of taxpayers will pay less
Posted on 4/26/17 at 7:46 pm to Jax-Tiger
quote:
but only the new plan eliminates all but a few deductions. So it is not really a fair comparison to compare the baseline, since anybody who has a lot of income will pay some smart people to find as many possible deductions as they can.
It's fair because the VAST majority of tax payers utilize the standard deduction. And the VAST majority of the rest owe the use of itemized deductions to their mortgage.
Posted on 4/26/17 at 7:47 pm to montanagator
Again.... It will not affect anyone like you in the less than 24k bracket! Quit whining!
Posted on 4/26/17 at 7:50 pm to montanagator
quote:
So Trump basically went to his accountants and asked what changes would be most helpful to himself? Because that's what a lot of this shite looks like.
No, not even close. If anything, Trump would pay more.
You are such a crybaby hater.
Posted on 4/26/17 at 7:51 pm to HailHailtoMichigan!
(no message)
This post was edited on 1/10/21 at 7:00 pm
Posted on 4/26/17 at 7:56 pm to Bard
This is intended as a 10-year expiration date plan correct?
Posted on 4/26/17 at 8:09 pm to montanagator
quote:
Trump basically went to his accountants and asked what changes would be most helpful to himself? Because that's what a lot of this shite looks like.
I'm guessing trump has a shite ton of itemized deductions. Sounds like this plan puts a stop to a lot of that. He may actually have to pay more.
Posted on 4/27/17 at 7:23 am to Tigerdev
quote:
This combination could be pretty bad for middle class depending on how the brackets shake out.
In what world? The middle class will be getting the most breaks.
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