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Republican Tax Plan

For years democrats have been claiming that Republicans tax the middle class to give tax break to the wealthy and it’s mostly been hyperbole.  Well not anymore.  Sad.

The entire plan is a smokescreen to drop the passthrough tax rate to 25%. 

Most of the tax plan - that I’ve read, at least - is fairly benign. The most important part is lowering the rate for corporations. That needs to happen.

The main focus is the corporate tax cut. Other than that, it’s mostly shuffling things around that are likely to have little net effect, but are aimed at convincing voters that they will have a direct benefit as well.

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- Everyone

pretty sure this will **** the coasties that didnt vote for him.

It eliminates the deduction for state and local taxes. That would hurt 40 million people, primarily residents in high-tax states like California and New York. But it would add $1.3 trillion to federal revenues.

As of October 17, 2017, Republicans from high-tax states would vote “no” on a plan that eliminates the deduction.

To win those votes, Congress might allow taxpayers to choose between that and the state property tax deduction. Or it might only eliminate the deductions for households with income over $200,000. They make up 18 percent of those who claim the state property tax deduction, but they receive 40 percent of the benefit. Similarly, they receive 71 percent of the benefit of the state income tax deduction. 

I love my cheese. I got to have my cheddar.

The basis of the plan:

Lower taxes for corps (im fine with this but lets remove significant deductions for them as well - their net tax rate should not be dropping significantly, effective rates large corps pay are low)

Lower taxes for DJT via pass through rate cap: No logical explanation for this - straight hand out Trump giving himself.

Estate tax repeal: DJT handout to the top .01%. This tax is not a huge revenue raiser - and it wasnt meant for that purpose it was to keep families from becoming dynasties. Im fine with increasing the minimum to 20mm or something but making it harder to avoid.

How the plan will be paid for:

Aggressive dynamic scoring & typical right wing accounting that “tax cuts pay for themselves in growth” - ill believe it when i see it. Hasnt worked that way in the past and any growth attributed to it didnt pay for the cuts.

Cutting spending - understandable, but naturally lets shove more money into the military while we are at it

Increasing taxes on people that didnt vote for DJT - political move that doesnt hurt the party in power one bit. Why should they care about the SALT deduction if those states dont vote for them. Will only work to increase the rural urban divide.

The plan is garbage to me, losing deductions is fine. Ill likely net a grand or two less all in with the increase in standard deduction not the end of the world. Its a pretty blatant plan that favors wealthy individuals & red states. 

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

It seems like middle or upper middle class couples with 2 or more kids in a blue states are really getting the dick with no grease here.  I’m not asking anyone to shed tears for me, but there really does seem to be a window between around 150 and 250K for joint filers where you’re getting hit from all sides. 

anyways. does any of this matter. im pretty sure, republicans are going to show that they dont support him through this tax bill, his popularity will drop. then hes going to get impeached. going down as the worst president in america. lol

I love my cheese. I got to have my cheddar.

Most people agree that the corporate rate should be cut, Obama was in favor of this for years.  If they just wanted to cut this rate they could just do it.  The latest budget passed allowed them to pass a tax bill which would add 1.5 trillion to the deficit over 10 years.  Cutting the Corporate tax rate would likely be in that neighborhood. 

We currently receive as much tax revenue from passthroughs as Corporate taxes, in the business revenue segment.  It’s the fast growing segment for US  tax revenue.  There really is no good reason to tax this group at such a drastically lower level than other high income earners (39.6% vs 25%) other than to reward the high income earners which are significantly more likely to receive their income from ownership stakes in passthrough.

On the other hand, it would not be so fair to cut corporate tax rates, but not rates for partnerships, limited liability companies, and other non corporate businesses.

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

Did they release the income ranges? Without that it is basically not even worth discussing with respect to personal taxes.

It’s whatever, just make it count.

- kDot

Not going to pass. GOP can’t agree on sh*it.

Am I reading this right? Mortgage interest deduction capped at $500k. So if you’re paying $600k in mortgage interest the last $100k won’t be deductible? That seems completely reasonable. That’s a ton of mortgage interest. Mine’s like $10k a year or something.

Realtors and homebuilders are saying this is going to throw the housing market into recession. What am I missing here?

That means $500k of loan balance..

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

i think stl understood that.

Affects 15% of new homes sold.

https://census.gov/construction/nrs/pdf/ussoldbypricea.pdf

i actually think they should repeal that ****. why the **** do renters not get a tax deduction but buying a house does. retarded.

I love my cheese. I got to have my cheddar.

The press release states “home purchase” of 500k.  Not sure if this means you can only deduct if the home purchase itself is less than 500k or if the mortgage balance is less than 500k.  Assuming it applies to mortgage balances, it’s not clear if the deduction is gone altogether for loans in excess of 500k or if it’s pro rata where you can deduct the interest derived from the first 500k of mortgage principal.  

its for mortgage balance. its always been. they are jus lowering the limit from 1m. not really sure if its pro rata. i’ve never had a second mortgage. lol. 

in credit cards they made a law that makes it so you pay the highest interest first. itneresting fact!

I love my cheese. I got to have my cheddar.

.

"You want a quote? Haven’t I written enough already???"

RIP

No, that helps but still not entirely clear. If it’s the value of the home at the time of purchase, that’s way too low. If it’s the remaining balance…meh, still probably too low for my liking. I’d be more comfortable with that around $750k. I’m sure those of you on the coasts would say it needs to be even higher.

Why can’t it be dynamic based on your zip code or something? Is that too difficult for the IRS to handle? I guess I just answered my own question.

I’m actually ok with this change. It creates an incentive for people to buy houses in the $600k range, rather than the $1 million range. The economy will be safer from another real estate bubble as a result.

I don’t think there should have been a mortgage interest deduction at all, but that’s another topic.

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

ohai wrote:

I’m actually ok with this change. It creates an incentive for people to buy houses in the $600k range, rather than the $1 million range. The economy will be safer from another real estate bubble as a result.

But then people will be rushing to buy all the $600k houses, driving their prices to $1MM.

This space available.

higgmond wrote:

ohai wrote:

I’m actually ok with this change. It creates an incentive for people to buy houses in the $600k range, rather than the $1 million range. The economy will be safer from another real estate bubble as a result.

But then people will be rushing to buy all the $600k houses, driving their prices to $1MM.

Or all the $1MM+ homes aren’t selling, thereby forcing homeowners to lower their asking prices…

#OnTheFlipSide

This is some fed up bullish!t right here. You can’t buy a home for under 500k in the major cities 

^ thats the point. everything in this tax bill is to pubish the coastal lib elites that dont vote for them anyway and give more to the “real americans” in the heartland while also stuffing as much money as they can in their pockets

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

ohai wrote:

I’m actually ok with this change. It creates an incentive for people to buy houses in the $600k range, rather than the $1 million range. The economy will be safer from another real estate bubble as a result.

I don’t think there should have been a mortgage interest deduction at all, but that’s another topic.

I completely agree, but a lot of other stuff would have to change too…like eliminating income tax altogether. As you say, that’s another topic.

There is one house for sale in my town under 500k (475k) it’s a 2br, 1 bath, and 1100 sqrft.  It’s dated on a very small lot in a congested/commercial area.  House has taxes of 12k.

I don’t like the mortgage interest deduction either, but it’s the law of the land and changing it will have disastrous effects on current home prices, particularly around the new price point. The housing market has made adjustments around the current tax breaks (likely painful  for some whenever the changes were first made), they shouldn’t eff with it now just to raise revenue for tax break elsewhere.  If they want to cut taxes they should cut spending first.

why not add a renter deduction. dont most of the folks in da middle rent?

"You want a quote? Haven’t I written enough already???"

RIP

Try buying a home anywhere in coastal California for $500,000! Just get rid of interest deduction altogether. 

seems weird that they would use a loan balance as a benchmark. why not just cap the overall benefit as a tax credit? you can write off mortgage interest up to a $5,000 tax credit or something like that.

Matt Likes Analysis wrote:

seems weird that they would use a loan balance as a benchmark. why not just cap the overall benefit as a tax credit? you can write off mortgage interest up to a $5,000 tax credit or something like that.

so they can advertise a larger number to make stupid people feel better until they actually file most likely

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

Meanwhile, lost in all of this, the carried interest loophole inexcusably lives on.

https://bloomberg.com/news/articles/2017-11-02/carried-interest-loop...