Primer on House and Senate versions of proposed tax bill.

[pb4uski]

+1 all for a reduction in corporate tax rates even though 35% to 20% seems a bit too generous to me but also need to get rid of those loopholes... even if we phase the loopholes out to keep the peace.

 

[audreyh1]

+1 but it seems that many only judge these things based on how it impacts them personally rather than based on common sense or equity and fairness.

I think a lot of people are judging this overall on common sense and fairness. It's just that many people do not agree on what is common sense and what is fair!

 

[MarieIG]

Being from a high COL and property tax area, I suspect that we will end up paying more. I will not miss the AMT however. I would like to see the corporate tax go down as I think that will rev up the economy, and would like to see the estate tax and generation skipping tax eliminated.

 

[Senator]

Senator - you might want to recalculate. You lost your personal exemption, so your standard deduction went from 10,650 to 12,000. Not the doubling you think.

For singles 65 and over its like 11,900 to 12,000. Pretty much the same.

It still sounds great.

 

[Golden sunsets]

I'm all for fairness, but I can't help but calculate the effect on our own tax situation. Under both plans we no longer itemize, so we essentially reduce AGI by $24,000. Under the House Plan we pay less in each of the next two years (by about $2,000). Under the Senate Plan we save about $1750 in each of the next two years. So the House plan is a bit more advantageous for us, however the 25% tax bracket threshold is lower under the House plan ($260,000) than the Senate plan($290,000). The proposed plans reflect roughly a 10% savings over total federal tax in 2018 and a 5% savings in 2019, the year that the tax bomb hits us. I think under either plan we should be able to stay in the 25% bracket.

 

[explanade]

I agree with the sentiment that i will take a personal hit if it is overall better for the country or economy.

My issue with this as it is proposed is they initially (as part of the corp taxcut) were also going to greatly reduce the transfer pricing of intellectual capital many corps use to avoid taxes, but when the corps complained they took that out. If i am going to pay more, i want real reform. If corp taxes are to be cut they need to reform the various loopholes such as carried interest, transfer pricing, intangible drilling etc. otherwise it becomes more of a give away.

Same goes for personal tax cuts such as conservation easements, and deductions for appreciated securities at stepped up rather than original basis. None of this was touched

Otoh, what is one persons loophole is another’s livelihood..... but if we are to truely reform, some of these things need to go.

+1

 

[Amethyst]

This may be because we are constrained to keep politics (the overall fairness of a policy is political) out of our discussions, but personal impacts are of interest to each person and are OK to discuss.

+1 but it seems that many only judge these things based on how it impacts them personally rather than based on common sense or equity and fairness.

 

[AndyS]

I agree with the sentiment that i will take a personal hit if it is overall better for the country or economy.
...

"if"

 

[gayl]

I know I'm slow on the uptake but if we're going to pay more + add 1.5T to the federal deficit, why are 'we' doing it?

 

[AndyS]

The standard deduction is "doubled" but the personal exemptions go away (at least in the House bill, I have not looked at the Senate bill). The net effect is about 15-20% increase in the deduction I think -- not "double."

Depends on how many kids an MFJ couple might happen to have upon which to to claim personal exemptions ... as I understand.

Seems to me middle income non-itemizers with four or five kids (like my neighbors) might take a hit.

 

[marko]

All of this might, or might not even come to pass.

In the end, just tell me what I owe and I'll write the check. Can't do anything about it either way and --at least for me--playing what-if doesn't help.

 

[Ian S]

I know I'm slow on the uptake but if we're going to pay more + add 1.5T to the federal deficit, why are 'we' doing it?

That's what I don't get. How can such a huge increase in the deficit be good in the long run for any of us? Especially with the economy in fairly good shape. What am I missing?

 

[ERD50]

That's what I don't get. How can such a huge increase in the deficit be good in the long run for any of us? Especially with the economy in fairly good shape. What am I missing?

Where does the 1.5T number come from? If it is from the CBO, as I understand it, they are required to do a 'static' model, and there are some 'dynamic' models that include the estimated effect of increased business activity from lowering corporate taxes, and I think, returning funds to the US.

Sorry, I don't have sources for that, and don't have time right now to look them up - I haven't paid too much attention to these proposals, as like others have pointed out, they could change a lot and may not get anything passed. But I think the 'static' versus 'dynamic' modeling may be the key to your question.

-ERD50

 

[explanade]

That's what I don't get. How can such a huge increase in the deficit be good in the long run for any of us? Especially with the economy in fairly good shape. What am I missing?

https://www.vox.com/policy-and-poli...use-republicans-tax-bill-donors-chris-collins

 

[MRG]

Where does the 1.5T number come from? If it is from the CBO, as I understand it, they are required to do a 'static' model, and there are some 'dynamic' models that include the estimated effect of increased business activity from lowering corporate taxes, and I think, returning funds to the US.

Sorry, I don't have sources for that, and don't have time right now to look them up - I haven't paid too much attention to these proposals, as like others have pointed out, they could change a lot and may not get anything passed. But I think the 'static' versus 'dynamic' modeling may be the key to your question.

-ERD50

I read yesterday it was scored statically, but I don't recall the source. The folks debating static vs dynamic had wildly different opinions of the effects.

 

[Amethyst]

Some of us will base difficult real-life decisions on the consequences of these changes.

For example, if we can't deduct state/local income taxes or property taxes, it will make financial sense for us to move to another state, even though we would prefer not to.

All of this might, or might not even come to pass.

In the end, just tell me what I owe and I'll write the check. Can't do anything about it either way and --at least for me--playing what-if doesn't help.

 

[PatrickA5]

We will be moderately better off under the House plan vs the Senate plan due to the House having a temporary $300 credit for taxpayer, spouse and, in our case, an over 17 dependent child. So, $900 in credits for a few years.

 

[audreyh1]

Where does the 1.5T number come from? If it is from the CBO, as I understand it, they are required to do a 'static' model, and there are some 'dynamic' models that include the estimated effect of increased business activity from lowering corporate taxes, and I think, returning funds to the US.

Sorry, I don't have sources for that, and don't have time right now to look them up - I haven't paid too much attention to these proposals, as like others have pointed out, they could change a lot and may not get anything passed. But I think the 'static' versus 'dynamic' modeling may be the key to your question.

-ERD50

No, the House and Senate's own scoring came up with just under 1.5T, and they had set themselves a new limit of adding 1.5T to the debt in the new budget that was passed recently.

The Joint Committee on Taxation said the bill would increase the federal deficit by $1.487 trillion over the next 10 years.

http://www.businessinsider.com/trump-gop-tax-reform-bill-deficit-debt-budget-2017-11

CBO says it's going to add $1.7T. The bill writers are trying to keep it under $1.5T so that it can be passed under the reconciliation rules which only require a simple majority.

 

[gayl]

CBO says it's going to add $1.7T. The bill writers are trying to keep it under $1.5T so that it can be passed under the reconciliation rules which only require a simple majority.

Doubt they'll get 60 votes so I'll worry when it happens (& my tax bill goes up)

 

[audreyh1]

Doubt they'll get 60 votes so I'll worry when it happens (& my tax bill goes up)

It doesn't require 60 votes, it only requires 51. (Or 50 votes plus VP tiebreaker?)

I explained that in an earlier post replying to your question..

 

[gayl]

It doesn't require 60 votes, it only requires 51. (Or 50 votes plus VP tiebreaker?)

I explained that in an earlier post replying to your question..

I thought you said if it stays below 1.5T. New estimates are between 1.49T and 1.7T (CBO - they'll need to review again).

Plus
1. have the home building lobbyists contacted the Senators yet?
2. bills are always being modified

 

[audreyh1]

I thought you said if it stays below 1.5T. New estimates are between 1.49T and 1.7T (CBO).

Plus:
1. have the home building lobbyists contacted the Senators yet?
2. bills areally always being modified

I did, sorry. I suppose I'm expecting that they can somehow juggle enough to shave $200B off if necessary, and I'm not sure who's scoring wins. By some measures they haven't exceeded the $1.5T limit.

Lets just say the bill writers are highly motivated not to exceed $1.5T

 

[gayl]

Of course they are but builders are just as motivated to keep home ownership a financially prudent decision and congressmen need money to run for reelection next year

 

[Amethyst]

I expect the mortgage interest deduction is the likeliest to survive the Congressional sausage-making. (I won't say why because that would be political).

Of course they are but builders are just as motivated to keep home ownership a financially prudent decision and congressmen need money to run for reelection next year

 

[mrfeh]

I know I'm slow on the uptake but if we're going to pay more + add 1.5T to the federal deficit, why are 'we' doing it?

https://www.marketwatch.com/story/here-are-the-winners-and-losers-of-the-tax-plan-by-income-bracket-2017-11-03