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Tax plan finalized, ready for vote


F3SS

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https://www.cnbc.com/2017/12/15/gop-releases-its-final-tax-plan--heres-whats-in-it.html

Here are some of the provisions the bill contains, according to a Republican summary:


- The proposal would maintain seven individual income tax brackets at slightly different rates: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent. The top rate would fall from the current 39.6 percent. The House originally proposed collapsing the system to four brackets, saying it would simplify the filing process. (Click here to see which bracket would apply to you.) The changes would phase out after 2025.


- The bill would scrap the personal exemption but increase the standard deduction to slightly less than double its current level. It would go to $12,000 for an individual or $24,000 for a family.


- It would drop the corporate tax rate to 21 percent from the current 35 percent. The change would take effect next year.


- The plan would set a 20 percent business income deduction for the first $315,000 in income earned by pass-through businesses.


- The bill would scrap Obamacare's provision that requires most Americans to buy health insurance or pay a penalty, beginning in 2019. Doing so is projected to lead to 13 million fewer people with insurance and raise average Obamacare premiums, according to the nonpartisan Congressional Budget Office.


- The plan would eliminate the corporate alternative minimum tax, which the Senate added back to its plan at the last second to raise money. House leaders and corporate groups said the tax would stifle research and development. It would also increase the exemption from the individual AMT.


- The estate tax, or so-called death tax, would remain but the exemption from it would be doubled.


- The child tax credit would double to $2,000 per child from $1,000. It would be refundable up to $1,400 and start to phase out at $400,000 in income. The tweak would end after 2025.


- The plan would limit state and local tax deductions. It would allow the deduction of up to $10,000 in state and local sales, income or property taxes.


- It will not change the mortgage interest deduction for existing homeowners. For new homes, taxpayers can deduct interest on up to $750,000 in mortgage debt, down from $1 million currently.


- Tax breaks for charitable contributions and retirement savings plans would remain.


- The bill would not include the controversial first in first out stock sales change, which sparked backlash in the investing community.

 

I understand a lot of it but I wish I had a better grasp on what everything means exactly. However I see a lot of good things in there for average joe. One thing I certainly don’t understand is what those couple items that expire after 2025 means. What happens then?

Edited by F3SS
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  Yeah, looking at it so far and it isn't that bad.  The expiring part means they go away.  They are just temporary to sell the plan to keep the permanent stuff.  Healthcare is going to go up, but I figured that was going to happen.  The $10,000 local, state and property taxes pushes my personal limit, but it is pretty close to covering my old deductions.  My 401k is still tax-free.  People with mortgages aren't getting screwed.  I haven't seen anything on capital gains yet, so I am not sure how my investments will do, but I am fairly confident that it will be lowered or stay the same considering who primarily invest in those things.  So I don't think my personal taxes are going up.

  Lots of stuff on the corporate side.  The wife has a S-corp and a C-corp.  We'll have to see how the pass-through taxes work out to see if it is worth it to convert the s-corp into a c-corp or not.

  The only big red flag for me so far is what effect this will have on the deficit.  The logic behind the plan is similar to what the conservatives in Kansas thought.  Basically, that lowering taxes would generate more government revenue by spurring business.  That simply didn't happen.  So, we'll see on that aspect.

Edited by Gromdor
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Hmm, actually reading up more on the pass-through income makes me think that it might be advantageous to set myself up as an S-corp or individual owner and get my individual income through that.  Sub-contract for a tax-break, actually.  If I am interpreting it right, you should get a good break there Fess.

 

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I think I will be too. There’s the business stuff plus kids plus the doubling the standard deduction. I wish I could understand the business taxes better. That’s what I have an accountant for but in all the years I’ve used her and asked questions she can’t speak in laymen’s terms. She’s retiring this year so next year when I find a new cpa maybe I’ll get a better grip.

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4 hours ago, F3SS said:

 

I understand a lot of it but I wish I had a better grasp on what everything means exactly. However I see a lot of good things in there for average joe. One thing I certainly don’t understand is what those couple items that expire after 2025 means. What happens then?

What happens then is the middle and lower classes get taxed to high heaven, in all likelihood (just my speculation). And at the very least that is when any benefits for them will end.

Make no mistake, this is a tax cut for billionaires. The US will suffer the consequences of this monstrosity for decades, if not longer.

Edited by ExpandMyMind
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You're a glass half empty kind of guy aren't you. EMM? :P

That sounds like a whataboutism or whatever that word is you keep throwing around.

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Well in EMM's defense, they really were talking about getting rid of mortgage deductions, 401K tax exempt status, the state/property tax deduction, medical expense deductions, etc. to pay for the business cuts.   All of that would have screwed the poor/middle class.  The fact that they didn't makes me wonder where they came up with the revenue to pay the bills.

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24 minutes ago, Michelle said:

You're a glass half empty kind of guy aren't you. EMM? :P

That sounds like a whataboutism or whatever that word is you keep throwing around.

How is it whattaboutism? It was directly related to the subject.

It's going to add $1 trillion dollars to the deficit. I'd say my glass is at an acceptable level. At least this time :D 

It's also going to start taxing alimony (what justification can there be for taxing the transfer of money from one person to another when no services have been rendered?), and even Republicans have said that it's a nasty piece of legislation.

Edited by ExpandMyMind
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29 minutes ago, ExpandMyMind said:

How is it whattaboutism? It was directly related to the subject.

It's going to add $1 trillion dollars to the deficit. I'd say my glass is at an acceptable level. At least this time :D 

It's also going to start taxing alimony (what justification can there be for taxing the transfer of money from one person to another when no services have been rendered?), and even Republicans have said that it's a nasty piece of legislation.

There is a thread about "Forbidden words" I submit for our sanity "whataboutism" should be included.

LOL, am I the only one? That one got old quickly :huh:

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6 hours ago, Gromdor said:

The only big red flag for me so far is what effect this will have on the deficit.  The logic behind the plan is similar to what the conservatives in Kansas thought.  Basically, that lowering taxes would generate more government revenue by spurring business.  That simply didn't happen.  So, we'll see on that aspect.

This is where I am too.  The middle class folks like me seem to have dodged a lot of bullets from the early versions to the final bill.  Good on that.  Doesn't look like things got a lot simpler to file though.

So far in history, from Reagan to Kansas "rocket fuel for the economy" only boosts the upper stage, doesn't result in more money, more tax revenues, and deficit reductions.

The likely outcome in a few years will be  the lament that we just can't afford all of these entitlements like social security and medicare with a huge deficit.  And of course, health care is not a right.  Cutting social programs will be the balance used to offset the corporate windfalls that will not result in a lot of good paying jobs.  I would worry most about young people, millennials.  They are going to have a really tough time in the gig economy and a plethora of low paying jobs with no benefits.   FML as they say.

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During the Obama years this would have sat on the tables for a year and a half, and then either suddenly declared an emergency demanding an instant vote regardless of who had even read it or not, or everyone would have had to have been backed into a corner formed by an imminent vacation and their prospects for votes next year...

:sleepy:

Golly,  what a difference a totally new POTUS makes in DC, eh? 

 

 

(for those of you who are unsure, that was something called sarcasm)

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36 minutes ago, AnchorSteam said:

During the Obama years this would have sat on the tables for a year and a half, and then either suddenly declared an emergency demanding an instant vote regardless of who had even read it or not, or everyone would have had to have been backed into a corner formed by an imminent vacation and their prospects for votes next year...

:sleepy:

Golly,  what a difference a totally new POTUS makes in DC, eh? 

 

 

(for those of you who are unsure, that was something called sarcasm)

“We have to pass the legislation to know what’s in the legislation”. 

Can you imagine the furore if that happened today?

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16 hours ago, Sir Wearer of Hats said:

Can you imagine the furore if that happened today?

Same as the furor created then, just a change in majorities. Get a vote, declare a win, kick the can down the road for someone else to deal with.  Nothing really gets fixed; fixes take cooperation, big majorities, and courage.  Maybe some common interests too.  I did kind of like the Republican who said that if they didn't pass a tax cut their wealthy donors would stop contributing.  If the bill had failed, maybe it would have killed two birds with one stone:  limit the pace of the top 1% and multinational corporations from stealing our children's future and get rid of some of their lap dogs in congress on both sides of the aisle.

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Quote: - It would drop the corporate tax rate to 21 percent from the current 35 percent. The change would take effect next year.

I like this part.  In Canada our Corporate tax rate is 17%.  And it spurred growth, development, investment and more tax revenue.  This is the biggest part of the whole Trump tax plan.  

I'm self employed and switching to being incorporated has expanded my business.  Giving me the opportunity to hire new employees and spend more money adding to the tax base... Which I hate of course.. but whatever.. lower taxes has created growth personally so I applaud this Trump plan.

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24 minutes ago, acidhead said:

Quote: - It would drop the corporate tax rate to 21 percent from the current 35 percent. The change would take effect next year.

I like this part.  In Canada our Corporate tax rate is 17%.  And it spurred growth, development, investment and more tax revenue.  This is the biggest part of the whole Trump tax plan.  

I'm self employed and switching to being incorporated has expanded my business.  Giving me the opportunity to hire new employees and spend more money adding to the tax base... Which I hate of course.. but whatever.. lower taxes has created growth personally so I applaud this Trump plan.

If you’re business is incorporated, does that mean we can buy shares in it?

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12 minutes ago, Sir Wearer of Hats said:

If you’re business is incorporated, does that mean we can buy shares in it?

Yes

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20 hours ago, acidhead said:

Quote: - It would drop the corporate tax rate to 21 percent from the current 35 percent. The change would take effect next year.

I like this part.  In Canada our Corporate tax rate is 17%.  And it spurred growth, development, investment and more tax revenue.  This is the biggest part of the whole Trump tax plan.  

I'm self employed and switching to being incorporated has expanded my business.  Giving me the opportunity to hire new employees and spend more money adding to the tax base... Which I hate of course.. but whatever.. lower taxes has created growth personally so I applaud this Trump plan.

Gromdor story time! 

The first construction company I worked for was a small corporation.  The owner made it that way because he was fond of the idea of having his employees buy the company stock as a retirement/investment option.  This would motivate them to work harder as they have a vested interest and make them more loyal because they were part "owners".  He was a fairly smart man, church elder, and die hard republican and I talked to him quite a bit about various things. 

One day he let slip that his company didn't make profit.  He disliked the idea of paying taxes and the idea of paying dividends or disbursements.  So every year the company made the minimum profit to stay a corporation.  To do this he would buy new tools, trucks, expand the shop, etc.   Those things in themselves weren't bad and helped the company grow.  He could claim them as expenses and drop his taxable income.  He also adjusted his and his wife's pay scale.  He would go from $60,000 on an average year (This was 20+ years ago) to upwards of $120,000 for himself and his wife on a good year.  And the company would pay the alternative minimum tax- 20%.

So basically his employees were paying him for partial ownership of a company that would never pay them back.  That and I never understood who really pays the regular corporate tax rate or why anyone would need to lower the corporate tax rate to expand/hire new people- especially considering those things are tax deductions in themselves.

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The bill over the course of 10 years will:
*Cut taxes by 6 trillion disproportionately on richer people and red states.
*Raise taxes by 4.5 trillion disproportionately on poorer people and blue states.
*Increase the national debt by 1.5 trillion, and the annual deficit by 150 billion.
*Will by 2027 have raised taxes on a majority of the population.
*Will enrich the people who passed it personally by a huge amount.
*Repeals the mandate, thus gutting the ACA.

The first draft was passed with hand written notes in them as the GOP put in bribes to get enough votes. In the case of Bob Corker, who admitted having not read the bill, he stands to profit by millions thanks to tax cuts to his businesses. The bill has the support of roughly a third of the population and several law makers have admitted that this is a bad bill but feel the need to pass something, mainly because their donors have told them to either pass it or they'll be cut off from funding. Even then this bill could screw over major GOP supporters such as ranchers and the coal industry, as one major coal baron in WV has said that tax bill would ruin him. Ryan has also already basically said that with the huge loss of income from this bill that the GOP will use the deficit as an excuse to gut social programs such as medicare and social security. In addition there seems to be little indication that the major corporations, who will benefit the most from this bill, will bother investing their newfound wealth back into the US.

Bottom line is that for the first few years taxes will drop before rising to higher than they are now in addition to tons of programs being gutted due to the loss of revenue. The only people who will see a long term tax cut are the extremely wealthy. This bill is basically politicians screwing over the people they claim to represent in order to directly enrich themselves. It's everything these forums claim to be against.

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The GOP will pay for this with votes for decades.

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3 hours ago, ExpandMyMind said:

The GOP will pay for this with votes for decades.

but it was bipartisan in the House....right?

I mean ...some Republicans voted against it....that's bipartisan isn't it?

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11 minutes ago, joc said:

but it was bipartisan in the House....right?

I mean ...some Republicans voted against it....that's bipartisan isn't it?

Maybe bipartisan in thinking it was a bad idea......

 

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10 hours ago, Corp said:

The bill over the course of 10 years will:
*Cut taxes by 6 trillion disproportionately on richer people and red states.
*Raise taxes by 4.5 trillion disproportionately on poorer people and blue states.
*Increase the national debt by 1.5 trillion, and the annual deficit by 150 billion.
*Will by 2027 have raised taxes on a majority of the population.
*Will enrich the people who passed it personally by a huge amount.
*Repeals the mandate, thus gutting the ACA.

The first draft was passed with hand written notes in them as the GOP put in bribes to get enough votes. In the case of Bob Corker, who admitted having not read the bill, he stands to profit by millions thanks to tax cuts to his businesses. The bill has the support of roughly a third of the population and several law makers have admitted that this is a bad bill but feel the need to pass something, mainly because their donors have told them to either pass it or they'll be cut off from funding. Even then this bill could screw over major GOP supporters such as ranchers and the coal industry, as one major coal baron in WV has said that tax bill would ruin him. Ryan has also already basically said that with the huge loss of income from this bill that the GOP will use the deficit as an excuse to gut social programs such as medicare and social security. In addition there seems to be little indication that the major corporations, who will benefit the most from this bill, will bother investing their newfound wealth back into the US.

Bottom line is that for the first few years taxes will drop before rising to higher than they are now in addition to tons of programs being gutted due to the loss of revenue. The only people who will see a long term tax cut are the extremely wealthy. This bill is basically politicians screwing over the people they claim to represent in order to directly enrich themselves. It's everything these forums claim to be against.

Just curious.. how did you calculate these numbers?  Or did you read this doom and gloom somewhere? The market never has been better.. the market is booming right now... Central bank interest rates are rising as they should in booms. You assume that precious gov programs designed to help the less fortunate are going to be slashed to cover losses if a loss in taxes. That's never going to happen.  The less fortunate will always be taken care of as they always are.  Trump's a business guy .. when the economy is cruising you lower taxes increase central bank interest rates.  There is no straight economic road.  Unless of course your projection is emboldened in commie propaganda.

Edited by acidhead
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5 hours ago, acidhead said:

Just curious.. how did you calculate these numbers?  Or did you read this doom and gloom somewhere? The market never has been better.. the market is booming right now... Central bank interest rates are rising as they should in booms. You assume that precious gov programs designed to help the less fortunate are going to be slashed to cover losses if a loss in taxes. That's never going to happen.  The less fortunate will always be taken care of as they always are.  Trump's a business guy .. when the economy is cruising you lower taxes increase central bank interest rates.  There is no straight economic road.  Unless of course your projection is emboldened in commie propaganda.

Red States tend to be less populated and have cheaper home and property tax rates.  So the mortgage deduction and property tax deduction rates will hit the caps faster in the east and west coast blue states. (average home cost in Brooklyn is $788,000- cap is $750,000)  The Congressional Budget Office was the one that published the increased debt numbers.  The tax cuts expire for most of the population by 2027.  The tax cuts will indeed help the millionaires in congress more considering a 2.6% rate drop for someone making a million a year is an amount of money greater than what minimum wages pays gross in a year. (You would have to drop the rate 100% for some of the middle class even to match the amount of money some of what congress makes) It could be argued that Trump wont personally benefit because he he pays 0% already because he is "smart".  https://www.politico.com/story/2016/06/donald-trump-no-taxes-224498

And it does indeed the individual mandate which everyone Republican and Democrat alike have said will increase premium rates for people who have and will maintain their insurance.

Edited by Gromdor
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21 hours ago, ExpandMyMind said:

The GOP will pay for this with votes for decades.

It comes as no surprise that the Left will say so, but there is actually more to life than election results. 

Quality of life matters too, but the Left is the side that is always telling us that America's best days are over, we should all make do with less, and that lower life expectancy and the hatred of the entire world world is just our due. We were born in sin because we are Americans, after all :rolleyes:

Wrong.

THIS IS YOUR SIDE PAYING FOR ROTTEN POLICY, FORCED SOCIAL ENGINEERING AND YOUR NIHILISTIC ATTITUDE TOWARDS ALL HUMAN ACTIVITY.

Get used to it.

And I suppose that the Democrouts will go all-out to blow up the budget so that they can claim that tax cuts cause deficits, just as they did with Reagan. I was there, I saw it happen (, and the 1980s were the best time to be alive that I have experienced).  

The "rich"? Let me tell you something; our Corporate tax rate drops from 35% to 21%. The reason that matters is because the average for the Industrialized world is 22.5%. Corporations that the IRS could not touch will be coming home, some already are. Lower tax rates will increase overall revenue for the Govt, but you can't explain that to folks how have no idea how an economy works.... ie; Socialists.

So go ahead and fantasize about the next election all you like. 99% of your focus will be propaganda distributed by media outlets that nobody can respect anymore, so who cares?

 

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22 hours ago, Corp said:

The bill over the course of 10 years will:
*Cut taxes by 6 trillion disproportionately on richer people and red states.
*Raise taxes by 4.5 trillion disproportionately on poorer people and blue states.
*Increase the national debt by 1.5 trillion, and the annual deficit by 150 billion.
*Will by 2027 have raised taxes on a majority of the population.
*Will enrich the people who passed it personally by a huge amount.
*Repeals the mandate, thus gutting the ACA.

The first draft was passed with hand written notes in them as the GOP put in bribes to get enough votes. In the case of Bob Corker, who admitted having not read the bill, he stands to profit by millions thanks to tax cuts to his businesses. The bill has the support of roughly a third of the population and several law makers have admitted that this is a bad bill but feel the need to pass something, mainly because their donors have told them to either pass it or they'll be cut off from funding. Even then this bill could screw over major GOP supporters such as ranchers and the coal industry, as one major coal baron in WV has said that tax bill would ruin him. Ryan has also already basically said that with the huge loss of income from this bill that the GOP will use the deficit as an excuse to gut social programs such as medicare and social security. In addition there seems to be little indication that the major corporations, who will benefit the most from this bill, will bother investing their newfound wealth back into the US.

Bottom line is that for the first few years taxes will drop before rising to higher than they are now in addition to tons of programs being gutted due to the loss of revenue. The only people who will see a long term tax cut are the extremely wealthy. This bill is basically politicians screwing over the people they claim to represent in order to directly enrich themselves. It's everything these forums claim to be against.

You guys are so funny. 

This is going to make tax revenue explode, and bring massive amounts of jobs back. 

How are the Dems ever going to get back in power now, by promising to raise taxes?? Lol good luck with that. 

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