Trump fans and tax reform

Discussion in 'Political Opinions & Beliefs' started by Sandy Shanks, Oct 12, 2017.

  1. ocean515

    ocean515 Well-Known Member Past Donor

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    LOL. And you think a senior citizen is 60 and over? Try again.
     
  2. Just A Man

    Just A Man Well-Known Member

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    No because I purchase a policy through an insurance company.
     
  3. Just A Man

    Just A Man Well-Known Member

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    You can't take the money with you so it's best to enjoy it. I can't remember the last time I bought a tire, battery, or even a windshield wiper. Not to mention I have had a 20 year warranty. I change the oil once a year.
     
  4. TomFitz

    TomFitz Well-Known Member

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    And just how is that going to affect whether the FEDERAL tax code no longer allows deductions for state and local taxes?????
     
  5. TomFitz

    TomFitz Well-Known Member

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    So does everyone on Obamacare.
     
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  6. Bear513

    Bear513 Banned

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    So you trash trumps plan based on democrats high taxes in those states and saying people are voting against their own interest, holy **** ..lmfao.

    :eek:
     
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  7. TomFitz

    TomFitz Well-Known Member

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    You're not the first full throat supporter of Trump's tax plan to state that they don't actually know what it is. That pretty standard with low information voters.

    I find it dishonest of you to be talking about how you bought your health insurance from a broker when 80% of you health insurance costs are covered by Medicare, which you did not get from a broker.

    Since most people's major asset is their home, and their largest tax deductions are mortgage interest (if you still have one), and state and local taxes (including real estate taxes), the Trump tax plan will amount to a significant overall tax incease for many middle class American, especially in the lower middle class. It will be especially hard on people with modest fixed incomes.

    But you didn't actually read the tax "plan" that you are loudly supporting, did you?

    (BTW, it's only nine pages long).
     
    Last edited: Oct 15, 2017
  8. TomFitz

    TomFitz Well-Known Member

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    That's right.

    Trump's tax plan will punish people who pay real estate or state and local taxes everywhere.
     
  9. Texas Republican

    Texas Republican Well-Known Member Past Donor

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    We should not allow people in states with an income tax to deduct that tax from their federal taxes.

    The states without a state income tax should not have to subsidize the states with an income tax. All Americans should pay their fair share to Washington.
     
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  10. Bear513

    Bear513 Banned

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    So maybe they will finnaly wake up and vote locally with their best financial interest in mind...sounds like a winner to me.
     
  11. Texas Republican

    Texas Republican Well-Known Member Past Donor

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    People in states with a state income tax should not be allowed to deduct the state tax from their federal taxes. That means the people in states without a state income tax subsidize the people who have a state income tax.

    If New York chooses to have a high state tax, why should the people in New Hampshire, Texas, or Florida have to pay for it?
     
  12. GrayMan

    GrayMan Well-Known Member

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    They get +6k more in the standard deduction would core max out of pocket so it would be a zero loss/gain on bad years and on years where they dont hit their max out of pocket they still get the higher standard deduction so thwy would get an advantage over where they are at now.
     
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  13. ButterBalls

    ButterBalls Well-Known Member

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    Governors can propose a reduction just as he can propose an increase in state and local tax's, if the proposal is approved by state legislature then he signs off on it.. There are many state tax's that could be waived, reduced and if agreed to a rebate per household if the state wish's to :)

    Just an example

    Colorado residents could see some green in their pockets thanks to the new recreational marijuana taxes.
    This is one of several reasons for voters to turn their attentions to state economic growth, and strive to reduce entitlements! State legislature and Governors have a lot of say over state money and tax's.. In the case above it's weed, but any commerce or production produces the same results, abundant state treasury!
     
  14. Seth Bullock

    Seth Bullock Well-Known Member Past Donor

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    All states are funded somehow, either through income taxes, sales taxes, or a combination of both. State income and sales taxes are both deductible if you itemize deductions on your federal tax return. You cannot deduct both state sales taxes and income taxes, but you may deduct one or the other. So, you see, states with sales taxes only are not subsidizing states with income taxes because both may be deducted.

    The Republican plan being formulated in Congress would eliminate all of that. This has the effect of taxing us for money we earned that has already been taxed. I paid about $10,000 to my state in income tax last year. Under the Republican plan, the federal government would see that $10,000 as taxable income, and they would tax it too. That makes no sense to me.
     
  15. TomFitz

    TomFitz Well-Known Member

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    I see all the Trumpsters weighing in with this line.

    Of course, not one of them complained how unjust it was that they were deduucting their state and local taxes before.

    And all of them are assidiously trying to avoid admitting that the Trump proposal includes real estate taxes as well, which is the largest local tax paid by most retired people.
     
  16. TomFitz

    TomFitz Well-Known Member

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    There you go again!

    Trying to confuse Trumpsters with facts!
     
  17. Texas Republican

    Texas Republican Well-Known Member Past Donor

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    My brother lives in Connecticut and he makes a very good income. He works in New York. He pays both New York and Connecticut state income taxes. Because of that, he pays nothing in federal income tax.

    I live in Texas. We have no income tax. I pay 100% of my federal income tax because I have nothing to deduct.

    Even though I love my brother, I'm pulling my weight when paying for our federal government. He is not.
     
    Last edited: Oct 15, 2017
  18. Seth Bullock

    Seth Bullock Well-Known Member Past Donor

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    I have read the plan carefully, and I have applied it to last year's income to see if I would have higher or lower taxes. The answer is that I cannot know that yet because the plan does not yet state the income levels that delineate the 12% and 25% tax levels.

    What I have figured out is this ...

    - For taxpayers who do not itemize, this will lower their taxes because the Standard Exemption is being doubled. No doubt about it, this is a tax cut for them.

    - Some taxpayers who have itemized in the past may find that taking the new doubled Standard Exemption lowers the amount of taxable income they have more than itemizing does. This will presumably lower their taxes.

    - But not all will necessarily benefit from this plan. Some people lower their taxable income by deducting state income or sales taxes and their property taxes on their primary residence. They are also entitled to claim a Personal Exemption. Married couples may claim two Personal Exemptions. All of these are slated to be eliminated by the Republican plan, leaving only mortgage interest and charitable donations as deductions. The new Standard Deduction for a married couple is proposed to be $24,000. But if you were itemizing your state taxes, property taxes, mortgage interest, charitable deductions, and claiming two personal exemptions, that amount may be more than $24,000, making it worth it to itemize. But the Republican proposal eliminates state taxes, property taxes, and the Personal Exemptions as deductions, so that taxpayer may be forced to just take the $24,000 Standard Deduction. The net result is that that taxpayer is going to have more taxable income than under the present tax law. And if they have more taxable income, they pay higher taxes presumably. (This will depend on where that 12% - 25% delineation is.) This is the situation I am in. All of my deductions amounted to more than $24,000, but without the state taxes and Personal Exemptions I would have to go with the Standard Deduction.

    - The 12% - 25% delineation is the key in my case, and I presume in the case of other people, but that has not been decided upon. In my case, if that delineation is at about half my taxable income, then it's a wash. If its less than half, I could see a tax increase. If it's more than half, I could see a tax cut. This means that the Republicans who are crowing about this being a "tax cut for all" may not be right. But we cannot yet know if it's right or not because we do not yet know where that delineation will be.

    - The plan leaves in mortgage interest as a deduction if you itemize and don't take the new, doubled Standard Exemption. But who does this benefit? The answer is that it benefits people with expensive properties who are carrying a very substantial mortgage. If you are paying more than $24,000 (married couple) in mortgage interest, chances are that you are in a high income level and living in a large, expensive home. And, if you are in the top 1% ($480,000+), you are also getting a 4% reduction in the tax rate.

    - By reducing the number of middle class taxpayers who can itemize, the plan dis-incentivizes charitable giving, another thing I don't like about it. A better idea would be to leave charitable giving as a deduction regardless of whether the taxpayer itemizes or takes the Standard Deduction.

    - And finally, I oppose the idea of lowering the rate on the 1% at a time when we are running annual budget deficits. I believe that if we can balance the federal budget and run a surplus, then we can talk about lowering the rate on the top earners, but not before.

    My :twocents:

    Seth
     
    Last edited: Oct 15, 2017
  19. TomFitz

    TomFitz Well-Known Member

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    Thanks for an intelligent and thoughful response.

    I only have a couple of issues.

    First of all, the mortgage interest deduction benefits anyone with a mortgage, particularly when the loan is fairly new, and the largest portion of the payment is interest. Since this is ofen a critical factor when first time homebuyers approach their first home, assuming that it only benfits the very rich does not make sense.

    The standard deduction is independent of the mortgage deduction, anyway.

    I cannot actually imagine anyone with a mortage NOT itemizing their taxes, although I am aware that many due.

    I put these folks in with the folks who overpay on their witholdings in expectation of a big refund check. They don't seem to understand that they are voluntarily paying more (frequently a LOT more) in taxes, and making the Federal government an interest free loan to boot!

    The net effect of this is to create the illusion of a tax cut, while, in fact, increasing overall taxes by eliminating discounting of state and local taxes.

    This will have an enormous impact on the finances of state and local governments all over the US. And since state governments have pushed unfunded pension liablilites in many states to localities, this impact will be acute.

    Frankly, this is all academic.

    There will be no tax reform. We are already in the middle of October and no bill has been placed in the floor. As you noted, they haven't even set on the income levels for the brackets.

    Trump doesn't talk about tax reform anymore, in case you hadn't notice. All he says are tax cuts.

    He knows how to talk to his base. And he knows he can get away with promising something for nothing, which is what an empty boast of a "big beautiful tax cut" is.

    (and we haven't even touched on the probability of exploding deficts yet. But then, this is a GOP Adminstration, and Dick Cheney told us what that means).
     
    Last edited: Oct 15, 2017
  20. Seth Bullock

    Seth Bullock Well-Known Member Past Donor

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    Well, of course, I don't know your overall situation. So I am forced to make some assumptions. If you have nothing to deduct, this means that you may not own property, and so you don't pay property taxes. If you have no mortgage interest, it could be that your home is paid for in full or that you rent your home. You are entitled to deduct your state sales taxes if you itemize. To deduct your state sales taxes, you may go through the effort of keeping records and receipts, or you may use a formula based upon your income. You are also entitled to deduct charitable donations if you make any and business expenses if you have them.

    Now even if you don't itemize, you are getting deductions whether you realize it or not. They are the Standard Deduction and the Personal Exemption. If you're single the Standard Deduction is $6300, and the Personal Exemption is $4050, a total of $10,350. If you are married, filing jointly, you are getting twice that amount. If you have dependents (children most likely), you are getting additional exemptions for them. So rest assured, you are getting deductions from your taxable income, just like people who itemize do. People who itemize cannot take the Standard Exemption like you do.

    As for your brother, since he pays income taxes to two states, in my opinion, he should not have to pay federal income tax on that money. That would be taxing money that has already been taxed away from him. But, if as you say, he makes a "very good" income, he must have other deductions such as mortgage interest, property taxes, business expenses, and probably some dependents in order to lower his taxable income to such a low level that he pays nothing in federal taxes. He may also be putting money into a tax deferred retirement account. If that were the case, that "very good" income is not really as good as he says it is because all it is paying for after state taxes and mortgage interest, etc, are the bare essentials. He would be falling into that 47% of people who contribute only 3% of federal revenue. Paying such a low tax rate (or nothing) may sound good on its face, but it really isn't exactly living high on the hog. For example, he may have a nice home, but if he is paying so much mortgage interest that it helps him owe nothing on federal taxes, then he is heavily indebted, and a large amount of his income disappears every month to make his mortgage payment.

    Again, I am making assumptions about your brother, but they are based upon some experience and understanding of how our taxes work. It would be interesting to actually see his tax returns and see how he makes a "very good" income and pays no federal taxes. It can't be from the double state income taxes alone if he is making a "very good" income. I make a "pretty good" income, but if my state income taxes were doubled, I would still owe federal taxes.

    Seth
     
  21. Quantum Nerd

    Quantum Nerd Well-Known Member

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    Good post!

    Can you tell, however, WHY the details of the plan are not specified? I tell you why. It is so the vast majority of the middle class won't realize how bad this plan really is for them compared to the rich.

    There is really no reason to obfuscate matters in tax policy. Any tax preparation software can easily calculate what impact tax rates have on each individual person/family. They really should run these proposals through software and give tables as to which people are helped and which are hurt.

    Of course, they won't do that, because it would show that the vast majority gets a measly $200 tax cut per year or less (or even pay more), whereas the top 1% will make out with $100,000s to millions. We've seen it before and there is no reason to believe this time will be different.
     
    Last edited: Oct 15, 2017
  22. Seth Bullock

    Seth Bullock Well-Known Member Past Donor

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    Tom, you may confusing the Standard Deduction with the Personal Exemptions. Under current law, people who itemize may not claim the Standard Deduction ($6300 for singles, $12,600 for marrieds), but they may claim the Personal Exemptions ($4050 for singles, $8100 for marrieds, and each child is another $4050).

    Under the proposed Republican tax plan, the Standard Deduction will be almost doubled ($12,000 and $24,000, single and married), but the Personal Exemptions will be eliminated completely. The Standard Deduction will still not be available for people who itemize their deductions.

    This means that a married couple will take the Standard Deduction of $24,000 unless they have more that $24,000 worth of deductible expenses. Potentially, there will be winners and losers here. Under the Republican proposal, that couple will not be able to deduct state income taxes (or state sales taxes), nor will they be able to deduct their property taxes, and they will lose the Personal Exemptions - all of which are things they can deduct now. This is probably going to leave them with their mortgage interest and charitable donations as deductions.

    Here's the trouble ...

    Some middle class families, when you total up their mortgage interest, property taxes, state income tax (or sales tax), charitable giving, and Personal Exemptions, have more than $24,000 worth of deductions under current tax law. (Let's say they have $30,000 of deductible expenses.) But the Republican proposal takes away state income and sales taxes, property taxes, and the Personal Exemptions, and without those deductions, that family may find that their remaining deductible expenses (primarily mortgage interest) is only $10,000. So their only option is not to itemize and to take the Standard Deduction of $24,000 instead. The net effect between current law and the Republican proposal is that that family can only deduct $24,000 instead of $30,000.

    This is what concerns me, right there.

    You mentioned the mortgage interest deduction as being an incentive for new home buyers. I agree completely. The trouble is this. Let's say you have a young married couple, educated with some skills, earning $120,000 together. They're smart enough to already be putting away $10,000 into a retirement account, and they pay $10,000 in state income taxes, leaving them with $90,000. Their federal tax is in the neighborhood of $14,000 at that level, leaving them with $76,000.

    That $76k is going to put them in the market for home-buying, but not some gigantic expensive home. It will be nice enough, but modest. This couple is not going to buy a house that is so large and expensive that they are paying $24,000 in interest every year. They will be better off with interest in the $10-12,000 area at the most. But consequently, their mortgage interest is not going to be enough to get them to itemize, especially since, under this Republican proposal, they cannot deduct their state income taxes, their property taxes, or their Personal Exemptions. They'll go with the Standard Deduction of $24,000 and not itemize. It is possible that they would have been better off under the current tax law than under the new law.

    And there goes that incentive for the new home buyer you talked about.

    It is the high income earners who can afford a large mortgage and to pay a lot of interest every year who will benefit from the mortgage interest deduction because they may be paying so much interest that it takes their deductions up over that $24,000 mark.

    See what I'm sayin'?

    And it irritates me also that charitable giving is dis-incentivized as well, unless a person is quite wealthy and can donate very large amounts of money. But the small donor probably cannot donate enough to make itemizing worth it, so that incentive is no longer available to them.

    Seth
     
  23. Sandy Shanks

    Sandy Shanks Banned

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    I get it. Thank you.
     
  24. Sandy Shanks

    Sandy Shanks Banned

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    Yeah, you don't change that stuff. You change the whole damn car. :banana:
     
  25. Sandy Shanks

    Sandy Shanks Banned

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    You can tell by my emphasis that I was stressing the medical deduction. That's why I addressed my remarks to senior citizens.

    But, yeah, you are right. There are probably a few million senior citizens living in those eight states that support Trump. I am informing them that Trump plans on giving them the shaft, a double whammy. Can't deduct state taxes and can't deduct medical expenses.

    Do you have a problem with that? Do you feel those people shouldn't know that just because you are a Trump fan? Well, screw you.
     

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