CDZ MATH: How the GOP proposed tax bill does not help middle class Americans

[usmbguest5318]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

 

[BuckToothMoron]

I doubt many people will read your entire post. I certainly didn’t, but I have little faith in either party ever doing any significant tax reform. And let’s just be honest about it. The problem is spending not revenues.

 

[Weatherman2020]

I'm still waiting for my $5K a year savings in healthcare.

 

[Pete7469]

Logic.

Collectivist "math" always leads to bankruptcy.

 

[TNHarley]

I'm still waiting for my $5K a year savings in healthcare.

I got mine. But it cost me 6k

 

[Weatherman2020]

And for the record, I'm very happy they are going to stop having deductions for college education and state taxes. Let the people enjoy the leftist fees on their own.

 

[usmbguest5318]

I doubt many people will read your entire post. I certainly didn’t, but I have little faith in either party ever doing any significant tax reform. And let’s just be honest about it. The problem is spending not revenues.

Be that as it may, the income tax code, which is this thread's topic, is about revenue. By all means, do create your own thread about spending if you are so moved.

 

[Ricky LIbtardo]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.


Pardon me, I made a mistake. There is a 10% bracket. So with that said I did the taxes for both examples.

Under current law with a 10% tax bracket and using the $23,775-$14,450=$9,325

10% up to $9,276
15% on difference of $9,325-$9,276=$49 * 0.15 = $7.35

For a total tax bill of $934

New tax proposal doesn't tax anything on income up to $12,000 after deductions. SOOOOO

$23,775-$12,000=$11,775.

SO THEY PAY NO INCOME TAX

They save $934

 

[Pete7469]

Be that as it may, the income tax code, which is this thread's topic, is about revenue. By all means, do create your own thread about spending if you are so moved.

I did, you didn't seem interested in it I suppose. Of course I don't leave a lot of space for pseudo-intellectual drivel.


.

 

[deanrd]

Help the Middle Class?

We are talking about Republicans.

They haven't helped the Middle Class since the 1950's.

 

[Unkotare]

There is absolutely NO tax reform that leftists wouldn't shriek and wail about - no matter how much it cut taxes for the middle class - unless if was primarily a punishment on the wealthy. There is NO way ANY reform would not trigger the democrat talking points (tax cuts for fat cats! an increase on middle class taxes! punishing the poor! etc.) if it also did anything for the wealthy and/or corporations. Every comment from the left about this or any other tax reform proposal was prepared long in advance regardless of what any such reform might include. They know that all they have to do is repeat themselves endlessly and leave the rest to their whores in the media.

 

[usmbguest5318]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

First off there's no such thing as a 10% tax bracket.

I provided a link that shows the tax brackets.

Also, I think you missed this very important group of words in the early portion of the OP:

in the current 10% marginal rate taxable income (not gross income) bracket

(23,775-12,000) * 0.12) = 1,413

You're right. My mistake. TY for pointing it out that I understated the extent to which the GOP/Trump plan is worse than I'd initially stated.

That said, paying $1,413 instead of my mistakenly presented $1,177 is not better for the single parent with a child individual(s) who have taxable incomes of zero to $9325 in taxable income inasmuch as those individuals currently would pay, at most, just over $900 in federal income taxes. Accordingly, rather than being "just shy of a 20% increase" in a low income single parent's federal income tax liability, it's a more than 20% increase in it, a 35% increase as a matter of fact (1 - (932/1413)). I'm sure that's comforting to such individuals than is the picture I presented.

 

[Toddsterpatriot]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

 

[Ricky LIbtardo]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

First off there's no such thing as a 10% tax bracket.

I provided a link that shows the tax brackets.

(23,775-12,000) * 0.12) = 1,413

You're right. My mistake. TY for pointing it out that I understated the extent to which the GOP/Trump plan is worse than I'd initially stated.

That said, paying $1,413 instead of my mistakenly presented $1,177 is not better for the single parent with a child individual(s) who have taxable incomes of zero to $9325 in taxable income inasmuch as those individuals currently would pay, at most, just over $900 in federal income taxes. Accordingly, rather than being "just shy of a 20% increase" in a low income single parent's federal income tax liability, it's a more than 20% increase in it. I'm sure that's comforting to such individuals than is the picture I presented.

I just posted the corrections in my previous post and with the new tax proposals there's no tax on income after deduction on the first $12,000. So the example you proposed pays NOTHING under the new tax plan for a $934 savings.

Facts are facts.

 

[Indeependent]

The Republican meme is Trickle Down.
"The Middle Class doesn't create jobs".
Give the off-shorers the tax breaks and well...yawn.

 

[usmbguest5318]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

First off there's no such thing as a 10% tax bracket.

I provided a link that shows the tax brackets.

(23,775-12,000) * 0.12) = 1,413

You're right. My mistake. TY for pointing it out that I understated the extent to which the GOP/Trump plan is worse than I'd initially stated.

That said, paying $1,413 instead of my mistakenly presented $1,177 is not better for the single parent with a child individual(s) who have taxable incomes of zero to $9325 in taxable income inasmuch as those individuals currently would pay, at most, just over $900 in federal income taxes. Accordingly, rather than being "just shy of a 20% increase" in a low income single parent's federal income tax liability, it's a more than 20% increase in it. I'm sure that's comforting to such individuals than is the picture I presented.

I just posted the corrections in my previous post and with the new tax proposals there's no tax on income after deduction on the first $12,000. So the example you proposed pays NOTHING under the new tax plan for a $934 savings.

Facts are facts.

with the new tax proposals there's no tax on income after deduction on the first $12,000.

Excuse me? Have you lost your mind? All income after reducing AGI by whatever deductions to which one is eligible is taxable income, whereafter tax credits are applied to one's "provisional" tax liability to directly reduce the tax liability, that is the sum one must remit to the federal government.

Basic federal income tax calculation process:

Gross income
Less: pre-adjusted-gross-income deductions
Adjusted gross income (AGI)
Less: Itemized or standard deduction
Provisional taxable income (on which one's provisional tax liability is calculated)
Times: tax rate
Provisional tax liability
Less: tax credits
Gross tax liability
Less: tax payments made during the year
Net (remaining) tax liability (this is the amount of the check one must submit with one's return)​

 

[deanrd]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

View attachment 158277

OK, you posted a table.

Now what?

 

[usmbguest5318]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

View attachment 158277

OK, you posted a table.

Now what?

I believe he posted it in refutation of the other member's assertion that there currently is no 10% tax bracket.

there's no such thing as a 10% tax bracket.

He may also have posted it to show that I didn't show the "up to and after" aspect of tax liability calculation. In my "100K" example, I didn't, and I didn't for simplicity's sake.

 

[Toddsterpatriot]

According to GOP advocates of the currently proposed tax code changes, the following are the "goodies" it offers to middle class Americans:

1. Maintains the deferred-taxation status of the 401(k) contributions
   • This isn't giving people anything they don't already have. I don't know why they're even touting this.
2. Nearly doubles the standard deduction (SD) to $12K and $24K for single and married joint filers, respectively. The GOP are touting that doubling as though it's among the best things since sliced bread. (It's worth noting that among median income earners, one in five (20%) itemize rather than taking the SD and 30% of filers overall itemize.)
   • Std. Deduction values for 2017:
     • Single: $6,350
     • Married filing jointly: $12,700
     • Head of household: $9,350
   • Now read the "fine print" on how the standard deduction increase is being implemented: "To simplify the tax rules, the additional SD and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." In other words, personal exemptions go the way of the dodo.
     
     What's the math on that? Well, for a simple example, let's look at a single filer in the current 10% marginal rate taxable income (not gross income) bracket. Currently s/he would, assuming they don't itemize, would take the SD plus one personal exemption of $4,050, $10.4K total. If one is 65 or older, one takes an additional exemption bringing the total to $11.65K. Seems good, right? Give the single person a child. Personal exemptions don't exist in the GOP plan, so now that single middle income parent under the age of 65 is limited to a $12K deduction whereas currently they have $14,450 in SD plus exemptions. What share of American households are single parent households? 34%.
     
     That's a lot of low and middle income folks who are going to be paying more. Who won't pay more, well, among middle income folks with kids, probably not many, but one has to read the rest of this section to see why.
   • The hurt doesn't stop there; instead it gets worse for low income people.
     
     GOP leaders have the gall to state, "Typical families in the existing 10% taxable income bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process."
     
     The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!
     
     The short of this and the preceding bullet point in this section is that the GOP/Trump plan eliminates the personal exemption -- $4050 per person in a given household -- and provides nothing in place of it.
   • As if that weren't enough, the GOP/Trump tax plan gets rid of a number of other deductions.
     • State and local tax deduction --> Gone in excess of $10K.
       
       Right now, itemizing taxpayers who, for example, earn $100,000 but pay $20,000 in state income and local property taxes, have a $20K deduction. Say bye-bye to that. How much is that deduction worth? Well, let's see; I'm going to do the example for a single filer with one child and I'm apply only the things I've discussed so far -- SD and now this deduction.
       • Currently:
         • Gross income: $100,000
           • Personal exemptions: (8100)
           • Itemized state and local tax: (20,000)
         • Less: Total deductions: $28,100
         • Taxable income: $71,900 (putting the person in the 15% bracket)
         • Tax liability: $10,785
       • GOP/Trump Proposal
         • Gross income: $100,000
           
         • Less standard deduction: $12,000
         • Taxable income: $88,000 (putting the person in the 25% bracket!!!)
         • Tax liability: $22,000
       • What does that mean? It means that just to break even with the current tax provisions, brackets and rates, that taxpayer has to come up with $11,215 in additional tax reductions in the GOP's/Trump's tax code.
     • Deduction for medical expenses --> Gone. Whom do you know that's paying out-of-pocket to some extent (above the floor for this deduction) for something like nursing or elder care?
     • Student loan interest deduction --> Gone. Who doesn't have student loan interest? People who are well-off enough not to have to take out student loans.
3. Adds a family tax credit (FTC)
   • I have yet to find any figures and provisions pertaining to just how much the FTC would be, how it'd be applied and to whom it would apply. The scuttlebut I've heard about it is that it would increase the child tax care credit by $600. Clearly given the math above, that's not nearly enough; it's at least $400+ not enough for a low taxable income taxpayer who is also a low gross income taxpayer.
4. Caps the mortgage deduction for new homes at $500K
   • I don't know why anyone thinks this is a good thing. It's going to hurt people on the high side of middle income who live in high COLA areas, and it's going to hurt the real estate industry, and its going to hurt mortgage lenders industry.

What is the impact of the GOP/Trump tax plan's provisions that affect low and middle income taxpayers? The short of it is that it pushes more people into taking the SD and giving up deductions that currently lower their tax liability, in turn, increasing their tax burden. Furthermore, to the extent one lives in a state that "piggybacks" off one's AGI or taxable income, as reported on one's federal 1040 form, as the departure point for calculating one's state tax bill, it's going to increase one's state tax burden, something I've only heard a handful CPAs and financial advisors discuss.

First off there's no such thing as a 10% tax bracket.

2016 Federal Income Tax Brackets
Tax rate Single Married, filing jointly
15% $9,276 to $37,650 $18,550 to $75,300
25% $37,650 to $91,150 $75,300 to $151,900
28% $91,150 to $190,150 $151,900 to $231,450
33% $190,150 to $413,350 $231,450 to $413,350

Second, whomever did the math here was obviously a byproduct of a union public school.

(23,775-12,000) * 0.12) = 1,413

The math above shows how that's simply not the case, but let's look at the insult that compounds the injury. Continuing with our 10% bracket filer who has one child and who took their $12K SD, because they are single and in the 10% bracket, we know their gross income must be, at most, $23,775. Under the current tax code, that "at most" taxpayer would pay, $932 ((23,775-14,450) x 0.10). Under Trump's/the GOP's tax plan, the 10% bracket is eliminated; thus our low income single parent would pay ((23,775-12,000) x 0.12) = $1,177. That's just shy of a 20% increase in that low income person's tax liability!

So to recap the reality of this bogus mess of propaganda, under current law they would pay $1,398 and the new proposal before going to committee is $1,413.

So if you want to argue it's an increase fine, it's $15. But quit putting out lieberal propaganda it's a 20% increase.

View attachment 158277

OK, you posted a table.

Now what?

Now everyone knows there is a 10% bracket.

 

[usmbguest5318]

There is absolutely NO tax reform that leftists wouldn't shriek and wail about - no matter how much it cut taxes for the middle class - unless if was primarily a punishment on the wealthy. There is NO way ANY reform would not trigger the democrat talking points (tax cuts for fat cats! an increase on middle class taxes! punishing the poor! etc.) if it also did anything for the wealthy and/or corporations. Every comment from the left about this or any other tax reform proposal was prepared long in advance regardless of what any such reform might include. They know that all they have to do is repeat themselves endlessly and leave the rest to their whores in the media.

There is absolutely NO tax reform that leftists wouldn't shriek and wail about - no matter how much it cut taxes for the middle class - unless if was primarily a punishment on the wealthy. There is NO way ANY reform would not trigger the democrat talking points (tax cuts for fat cats! an increase on middle class taxes! punishing the poor! etc.)

1. I haven't written about "any" tax change proposal. I've written about specific changes the GOP/Trump have proposed and that the GOP/Trump have touted as being better for middle class Americans. I've shown the actual tax impact of several of the provisions in that proposal to low and middle income Americans.
   
   If the GOP/Trump come up with a different proposal, I will perform the same detail-level analysis of it so that I'll understand what impact it will have on low and middle income Americans. I don't do the analysis for my own situation. I don't because I have a financial advisor who does that and provides me with detailed analyses similar to that I've shared above, though what I get from him is vastly more detailed and more complicated.
   
   The reason I bother to perform some basic analysis of the impact on people in low and middle income brackets is because I prefer to understand the full impact of such things and I know damn well that I'm not going to get a full story from any news organization. You see, my ethical system calls me to realize that such things as national policy, in this case tax policy, its impacts and whether or not any given policy (set thereof) is good or not is a function of more than just whether it's good for me, or even bad for me if it's bad in a minor way.
2. Do you have something to say that accurately and quantitatively contravenes the analysis I shared in the OP? If so, I'd like to see the quantitative analysis to that effect that you've got to share.
   
   Did I make errors in my presentation? I did, but even with those errors, upon correcting them, one finds that the Trump plan still causes middle and low income earners to pay notably more tax.
   • FWIW, I misread the tax rate chart and correlated the $71K in taxable income to a current rate of 15%, but it should have been 25%. That mistake on my part lowers the difference between the Trump plan and the current tax code to just over $4,000 rather than $11,000. Be that as it may, that's still $4K more that $100K taxable income earner will have to pay. I submit that to people in that income range, $4K is a material sum of money.
3. While my analysis is imperfect on a couple calculation points, it's spot on in its theme: the Trump tax plan does not help middle class Americans or low income Americans. Low income people will pay more and so will middle income people, and I bid you to find a middle or low income taxpayer who thinks their having to pay more federal income taxes is helpful to them.
   
   Contrast that with the email I got today from my financial manager wherein I learned that the Trump/GOP plan, based on what's known right now, will lower my taxes by more than $200K. (I knew the GOP plan would be "good" for me, but I didn't expect it'd be that good. and yet it's not going to alter my lifestyle. That's crazy! That's about how much my oldest son earns from his job! It's more than most people make at all.) There is nothing ethically right about a set of tax provisions that do that while also increasing the taxes far less well-off folks pay. (Click here to get a sense of how many Americans are going to see their taxes markedly decrease by a very handsome sum. Relative to the total population, it's not many people.) I am in no way ashamed or proud of being comfortable -- that is what it is -- but I don't need to be made "more comfortable" by dint of federal income tax provisions and at the expense of people who are nowhere near as comfortable as I.
   
   
4. Does it gall me to write a quarterly check, made payable to Uncle Sam, for a more than a hundred grand? It sure does. Every single time. Will you find me gleefully begging to pay more in taxes? No. Nobody wants to pay more; however, the fact remains that some people can and suffer no change in their lifestyles. If thus situated people are bid to pay more so that less advantageously placed folks can pay less, the least the former group's members can do, IMO, is refrain from "woe is me," because nothing could be farther from the truth. And let's not pretend that well-off folks don't get something in return for paying more in taxes than do other people. The reality is that well-off folks get a regressive tax code that allows them to pay, after deductions, at, near and sometimes less than the effective tax rate realized by taxpayers who earn far, far less.