https://www.wsj.com/articles/winners-and-losers-under-the-trump-tax-plan-1506542307Winners
People who dont take deductions.
The framework would roughly double the amount of the standard deduction to $24,000 for married couples and $12,000 for singles.
This change would benefit taxpayers who dont break out deductions for mortgage interest, state taxes, charitable donations and the like on Schedule Aand they file about 70% of all returns. Current itemizers might opt to refrain.
But there is a potential catch: in return for the expanded deduction, taxpayers will lose the personal exemption for each family member, which is $4,050 in 2017. It isnt known whether additional changes will make up the difference for families with children.
Heirs of very large estates.
The current estate tax applies only to individuals with assets greater than $5.5 million, and $11 million for couples, which exempts all but 0.2% of estates.
The framework would repeal both the estate tax and the so-called generation-skipping tax, which can impose estate tax if someone attempts to skip one or more layers of tax by leaving assets to descendants.
It isnt clear whether estate-tax repeal will include other tax increases in this areasuch as increasing capital-gains tax at death on very large estates.
Higher-earning owners of so-called pass-through businesses.
The framework wants to lower the tax on pass-through business income. Currently owners of partnerships, limited-liability companies and S Corporations pay tax on income at the owners personal rate.
To stimulate economic growth, the framework would drop the top rate on the owners business income (other than wages) from about 40% to 25%. This change wouldnt help small-business owners with tax rates below 25%, but it would benefit those taxed at higher rates.
Administration officials have said they wont allow this lower rate for so-called personal service providers such as accountants, and this exception could also include doctors, lawyers, architects and others. Critics also worry that taxpayers will try to convert higher-taxed wages to lower-taxed business income by artful planning or outright cheating.
Haters of the alternative minimum tax.
This complex surtax, which rescinds some tax benefits, is slated for total repeal.
Losers
Residents of high-tax states.
Republican lawmakers and Mr. Trump seem determined to repeal write-offs for state and local income, property and sales taxes, which are deductible on federal tax returns.
These deductions currently cost Uncle Sam more than $100 billion a year, and lawmakers would like to use that to reduce taxes elsewhere, according to Scott Greenberg of the Tax Foundation. Lawmakers favoring repeal see it as an inefficient subsidy, he said.
If this write-off ends, the pain would be greatest in high-tax areas, including New York, New Jersey and California. There will likely be stiff opposition from Republican lawmakers representing these areas, so the write-off may be limited rather than repealed outright.
People who take charitable and mortgage deductions.
The framework would specifically preserve these write-offsalthough experts say the mortgage interest deduction could be curtailed to $500,000 of interest rather than $1 million. And a higher standard deduction would mean many homeowners annual mortgage-interest paymentscombined with the repeal of other write-offsmight not be high enough to be worth itemizing.
High-wage earners.
One of the few new elements in the framework is a possible rate above 35% for high earners, to ensure the new system is at least as progressive as the existing tax code. The rate and level of income it would apply to isnt specified.
If such a rate is imposed, it will likely apply to mainly wage earnersnot the business income of so-called pass-throughs or investment income such as capital gains and dividends. If it is coupled with loss of state and local tax deductions, some people could owe much more.
People with large medical or disaster deductions.
Each of these write-offs on Schedule A has significant hurdles and is only available to taxpayers with large unreimbursed expensessuch as from nursing-home costs or Hurricane Harvey flood damage.
Both deductions would probably be repealed under the framework, along with those for investment interest, gambling losses and unreimbursed businesses expenses.
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WSJ: Winners and Losers Under the Trump Tax Plan
- Thread starter Tovarisc
- Start date
KojiKnight
Member
It's really hard to say any of that for sure because there are many many MANY places in the proposed bill that just state "And congress needs to work out the details... or not. Whichever." It also doesn't note that people on the lowest tax bracket also lose. The previous lowest bracket was 10%, this will make it 12%.
BoogieWoogie
Banned
What qualifies as "high wage"?
backflip10019
Member
No matter what happens to tax laws, I always seem to get fucked living in NYC.
As the owner of a pass-through LLC it would effectively halve my annual tax bill.
This is terrible and I should pay my fair share of taxes to support those who live at or below the poverty line and to ensure a safety net for fellow citizens as well as pay my fare share for the infrastructure that supports me. I guarantee that I wind up taking a ton of "soft" money from the government that I don't even know about that goes to support ports of entry, highways, rail yards and other infrastructure projects that I don't even see, and my taxes need to pay their way to keeping those systems intact. Otherwise I'm benefiting off of public infrastructure and not paying into the system to support it.
I fucking hate the fact that Republicans have started treating people as "makers and takers" and I say that from someone strongly in their "maker" camp. I didn't get here alone and daily benefit from being a citizen of the country and I should pay my fair share into the system that provided me with the opportunity to wind up where I am as well as to make sure that there are programs there for those who need them.
This is terrible and I should pay my fair share of taxes to support those who live at or below the poverty line and to ensure a safety net for fellow citizens as well as pay my fare share for the infrastructure that supports me. I guarantee that I wind up taking a ton of "soft" money from the government that I don't even know about that goes to support ports of entry, highways, rail yards and other infrastructure projects that I don't even see, and my taxes need to pay their way to keeping those systems intact. Otherwise I'm benefiting off of public infrastructure and not paying into the system to support it.
I fucking hate the fact that Republicans have started treating people as "makers and takers" and I say that from someone strongly in their "maker" camp. I didn't get here alone and daily benefit from being a citizen of the country and I should pay my fair share into the system that provided me with the opportunity to wind up where I am as well as to make sure that there are programs there for those who need them.
This is a direct shot at hurting the economy in Democratic strongholds. There is no reasonable explanation for this other than the federal government trying to punish liberal states.
The irony of large firms relocating big earners to Texas or Florida and turning those states blue would be amazing. But, this feels directly punitive at the most powerful states who are enemies of Republican programs since it basically is a New Jersey, CT, New York and California punishment.
Randolph Freelander
Member
WSJ just said high wage earners will lose by having their top marginal income tax rate cut from 39.6% to 35%.
WSJ seriously just did that.
WSJ seriously just did that.
Cesare Borgia
Banned
The point is that by eliminating many state write offs, higher earners could end up paying more than they do now.
Randolph Freelander
Member
It wouldn't be a Republican plan if it did that.
D
Deleted member 1159
Unconfirmed Member
Yeah I had trouble taking this list at face value because it was the WSJ and I guess this concern was validated.
Hari Seldon
Member
If I read it correctly they are saying that there might be a rate above 35% for "high earners". I hate this shit, give me the entire plan with all the fucking details, I don't want this spin shit.
Yeah, but I still dont see it as viable. There are a fair number of red states that have high state income and property taxes.
My state has a state income tax of 6%, and property taxes over 2.5% and is ruby red. Not being able to deduct that money is a big change in my AGI, approaching 10%.
Honestly this sounds great for me. My only deduction is the interest on my massive pile of student loans which I can't take full advantage of since I earn above a threshold.
Selfish I know, but doubling the standard deduction will put a lot of cash in my pocket that I could use to get out of the student debt.
Selfish I know, but doubling the standard deduction will put a lot of cash in my pocket that I could use to get out of the student debt.
LegendofJoe
Member
The country is in an economic civil war. The targeting of Medicaid dollars to red states and raising taxes on blue states via the elimination of the SALT deduction should be all the evidence you need to see.
andythinkpad
Member
We got our first baby on the way, are we better off with the old tax plan or new tax plan.
I don't think it's spin. They have 5 trillion in tax cuts they want. A budget promise to only push through 1.5 trillion.
Now they fight over what fits. That's been designated an area they'd prefer 35% but it's an option to add another bracket if it makes something fit that's worth it.
It is in that it punishes blue states with higher tax rates.
ghostwritingduck
Member
This write up makes the overall plan sound way more helpful to the majority of Americans than I would have expected. Higher standard deductions help lower class families and limiting mortgage deductions to a half million wont affect the majority of Americans. My guess is that the overall net impact of this plan will create a crisis requiring massive cuts in the future, but people will be too happy taking more money home to realize this or care that the wealthiest Americans are getting even bigger breaks.
Hari Seldon
Member
This sounds like the people really getting screwed are going to be middle/upper middle class earners that live in high tax urban areas. The one good thing i do like is the limit on mortgage rate deduction to 500k.
What state do you live in and what tax bracket are you currently in now?
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
And you got suckered by the "higher standard deduction." That's a cover. They're ripping away many other deductions families take, like the child tax deduction, which is HUGE for families. Most likely, this will lower or eliminate the EITC as well, which would be another direct hit to the budgets of poor and lower-middle-class families.
It's a massive transfer of wealth to corporations and the rich.
demosthenes
Member
The last time a Republican cut taxes it increased the deficit more than the wars they started. Can't wait to see where we go next!
It doesn't actually double the standard deduction.
http://www.businessinsider.com/trump-tax-plan-doubled-standard-deduction-2017-9
BoboBrazil
Member
Corporate tax rate will only be 20% when they already pay too little. Many credits get like student loans, children, and mortgages will be stripped away. This is worse for most people.
Long term a lower corporate rate and eliminating the mortgage interest deduction are actually good things. They need to be paired with other changes to work though.
the_firewithin
Member
I'm sure my dad will spin this that it's California s fault not the bufoon helping his buddies
TheSecondSpitter
Member
So the cash-flow corporations tax is a non-starter? I only ask because from the perspective of my PhD, i'll need to find a tall tree to hang myself from, if it is.
RustyNails
Member
Lol mortgage interest deduction? Good fucking luck you chumps.
Zaraki_Kenpachi
Member
People dont seem to be understanding that this means you are largely paying the same or slightly worse all the while fucking the northeast + California.
rokkerkory
Member
Child credit of 1k each but no personal deductions = net loss of 3k per person smh
Randolph Freelander
Member
Tax credit is different than the personal deduction. The credit comes off the top of your tax bill, a deduction makes less of your income taxable.
Losing a deduction is a loss of X% of the deductible amount, where X is highest applicable marginal rate based on your income.
Pretty much. And drip feed their red state base with bread crumbs. Just enough to keep them alive, so you can continue to blame those blue state elites for all their woes.
It's brilliant. This is the end game they've been planning for 40 years.
Exactly what it sounds like. If you pull a wage, ie you have a salary, you're screwed.
Investment income is the only thing protected.
Because a bunch of Wallstreet jerkoffs and multinationals sitting on piles of cash are the only true job creators and sole purpose of capitalism. Join their ranks or deal with it pleb.
What's the relevance of 2012 and 2013 numbers?
BoogieWoogie
Banned
The joke is these poor souls are now also fucked, except the couple living off their retirement investment income.
LucidMomentum
Member
What. How does this lower your taxes and why is everyone so intent on not paying taxes?
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