Next on 'Trump Agenda': Taxes [Update with 2018 tax data] (1 Viewer)

superchuck500

tiny changes
VIP Subscribing Member
Diamond VIP Contributor
Joined
Aug 9, 2004
Messages
44,076
Ratings
57,289
Location
Mt. Pleasant, SC
Offline
Sticky Post
Some financial observers think that the effort for tax reform will be 'easier' than repeal/replace because 'everyone [in the GOP] is in favor of tax cuts.' While that is essentially true, the revenue component can be tricky. The Freedom Caucus and other budget hawks have been beating the drum of fiscal responsibility for many years and they aren't going to simply cut taxes on the back of deficit spending. The revenue side of the equation has to make sense.

In addition, if the GOP intends to use the reconciliation process for the tax bill to avoid Senate filibuster, it has to be revenue neutral. This was going to be challenging anyway, and now without the tax savings that a repeal of ACA would have brought, it makes it an even tougher nut to crack.

Finally, the GOP will need to figure out where the tax proposal is coming from. Trump is likely going to want it to come from the executive (Treasury or White House), especially after getting burned on the ACHA, which came from the House. But Trump doesn't like to give public support to specific plans - he has refused to be pinned down on aspects of tax reform and his support to the ACHA came late and without a command of the bill's particulars. Further complicating the matter is Trump's leadership style, where he likes to have different power centers, with overlapping areas of focus, and all reporting to him directly. This makes a singular effort with unified support difficult.

As Forbes put it today, it isn't going to be easy and could likely be more difficult that healthcare:

Following the collapse of the House GOP health plan, President Trump and many congressional Republicans say they will pivot to tax reform. Passing that initiative, they insist, will be easier. For example, on Friday Treasury Secretary Steve Mnuchin put it this way: “In a way, it is a lot simpler. In health care, it’s a much, much more complicated issue.”

Mnuchin and others could not be more wrong. If lawmakers think rewriting the nation’s health laws are hard, just wait ‘til they tackle full-blown tax reform. There is a good reason why a major rewrite of the tax code has not happened for more than three decades.
https://www.forbes.com/sites/beltwa...r-than-rewriting-the-health-law/#8c6f2925262a



For a detailed account of how the process is setting up and how the fissures from healthcare are going to carry over to tax, from the Washington Post: https://www.washingtonpost.com/news...s-1145a:homepage/story&utm_term=.98e542572fd0


A revenue-neutral simplification of the tax system that lowers corporate tax and brings "repatriation" of off-shore funds would be a big success for all involved, and if they do it smartly, it could be a significant benefit to the economy. Right now, there's not a lot of reason to be optimistic.
 

insidejob

Respect existence or expect resistance.
Approved Blogger
Joined
Feb 3, 2010
Messages
25,058
Ratings
41,397
Location
70005
Offline
Has anyone else seen this commercial that's been being aired a lot lately on buying a book on how to navigate the Trump tax cuts to supposedly reduce your taxes by 20%?

I wouldn't be surprised if it's being published for and owned by Trump to sell to his rubes so they think they'll get a 20% cut on their taxes, not realizing that they're not in a bracket that can take advantage of these cuts anyway.
 

TheRealJRad

The Artist Formerly Known as AgentJRad
Staff member
Tech-Admin
VIP Subscribing Member
VIP Contributor
Joined
Dec 16, 2009
Messages
9,895
Ratings
10,554
Age
35
Location
Baton Rouge
Online
I can't fully apples to apples yet because TurboTax isn't allowing me to view/print my 2018 return. I made $2,488 more in "box 1" wages this year, paid $981 less in taxes, and my return was $144 higher this year. That's comparing W-2s though.

Edit: Single, one income, no kids
 
Last edited:
Moderator #884

mt15

Subscribing Member
Staff member
Super Moderator
VIP Subscribing Member
Platinum VIP Contributor
Joined
Mar 14, 2006
Messages
12,106
Ratings
16,217
Offline
These seem to be in line with estimates of about $1000-$1200 dollars for the middle class. I don’t have a problem with that. What I do have a problem with is the tax break of $30,000 for folks making about 3-4 times what the people make who got back $1000. That’s messed up.
 

Saint_Ward

The Great Eye is ever Watchful
Staff member
Administrator
Gold VIP Contributor
Joined
Mar 1, 2007
Messages
40,455
Ratings
33,201
Location
Fort Lauderdale, FL
Online
These seem to be in line with estimates of about $1000-$1200 dollars for the middle class. I don’t have a problem with that. What I do have a problem with is the tax break of $30,000 for folks making about 3-4 times what the people make who got back $1000. That’s messed up.
We will have to wait for one of our "ballers" to chime in. lol.
 

Saint_Ward

The Great Eye is ever Watchful
Staff member
Administrator
Gold VIP Contributor
Joined
Mar 1, 2007
Messages
40,455
Ratings
33,201
Location
Fort Lauderdale, FL
Online
I can't fully apples to apples yet because TurboTax isn't allowing me to view/print my 2018 return. I made $2,488 more in "box 1" wages this year, paid $981 less in taxes, and my return was $144 higher this year. That's comparing W-2s though.

Edit: Single, one income, no kids
Same boat for me, but I always save and print my filings, so just looked at them to compare.
 

Saint_Ward

The Great Eye is ever Watchful
Staff member
Administrator
Gold VIP Contributor
Joined
Mar 1, 2007
Messages
40,455
Ratings
33,201
Location
Fort Lauderdale, FL
Online
One of my favorite sentences from the IRS.

"Your tax refund is scheduled to be sent to your bank by February 8, 2019."

I love filing early, got approved in 5 days, and that was with a weekend in there.
 
OP
OP
superchuck500

superchuck500

tiny changes
VIP Subscribing Member
Diamond VIP Contributor
Joined
Aug 9, 2004
Messages
44,076
Ratings
57,289
Location
Mt. Pleasant, SC
Offline
These seem to be in line with estimates of about $1000-$1200 dollars for the middle class. I don’t have a problem with that. What I do have a problem with is the tax break of $30,000 for folks making about 3-4 times what the people make who got back $1000. That’s messed up.
We will have to wait for one of our "ballers" to chime in. lol.
Like you pointed out earlier Ward, the best comparison is total tax liability year over year - not a refund comparison, there's too many variables involved there to be meaningful. High-income filers don't typically get refunds anyway. You pay your quarterly estimates based on 90% of your previous year's liability - that makes you "penalty proof" (and no interest until 4/15 of the following year).

I haven't done my own analysis, I have K-1s that don't get finalized until the middle of the year. But for high-income filers, based purely on the brackets, if you made $1M of ordinary income in 2017, your unadjusted federal tax liability would have been $396,000. That same $1M of ordinary income in 2018 comes down to $370,000. So that's a $26,000 savings based simply on the application of the adjusted bracket to ordinary income. Most high-income filers will have a mix of ordinary income (from various sources) and capital gains (of different kinds).
 

Saint_Ward

The Great Eye is ever Watchful
Staff member
Administrator
Gold VIP Contributor
Joined
Mar 1, 2007
Messages
40,455
Ratings
33,201
Location
Fort Lauderdale, FL
Online
It’s exactly 2.6% extra.
I'm just thinking about that 604k of take home pay now being around $630k. before any credits and what not. You can buy your kid a new Corolla, low end Camery, or something without batting and eye.

I can fix a corolla with my change in tax liability (including kids), without the kids, looking at just the normal tax liability of a married couple, I'd be able to get an oil change and some gas.
 

Tapxe

Coalescing the vapors of human existence
Joined
Jul 19, 2001
Messages
20,894
Ratings
50,259
Location
Now
Online
Admittedly a very biased site using some anecdotal evidence, but if it holds that the numbers are true then this isn't good news for the tax plan.

 

Saint_Ward

The Great Eye is ever Watchful
Staff member
Administrator
Gold VIP Contributor
Joined
Mar 1, 2007
Messages
40,455
Ratings
33,201
Location
Fort Lauderdale, FL
Online
Admittedly a very biased site using some anecdotal evidence, but if it holds that the numbers are true then this isn't good news for the tax plan.

I've seen a lot of stuff on Twitter with the #GOPTaxSCAMStories complaining mostly. However, a lot of people are comparing their refund amounts from last year and either a smaller refund or owing taxes. They aren't comparing their overall tax burden. So, hard to say if they're actually paying more taxes, or just stupid at math.
 

Tapxe

Coalescing the vapors of human existence
Joined
Jul 19, 2001
Messages
20,894
Ratings
50,259
Location
Now
Online
I've seen a lot of stuff on Twitter with the #GOPTaxSCAMStories complaining mostly. However, a lot of people are comparing their refund amounts from last year and either a smaller refund or owing taxes. They aren't comparing their overall tax burden. So, hard to say if they're actually paying more taxes, or just stupid at math.
Perception can become reality. My own situation I cannot judge because of a personal situation which change tax filing status mid year. I actually expected to owe more than I do, but this is the first time ever I've been hit with a penalty for not withholding enough. I claim married and 1but that changed to single before the end of the year. I looked and my withheld amount actually dropped after changing the w2. I'm hoping this doesn't continue next year when it should be normalized.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

Users Who Are Viewing This Thread (Users: 0, Guests: 1)



Saints Headlines (The Advocate)

Headlines

Top Bottom