Money Matters
smerka
member
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Trumps tax plan
So what do you guys think? I really don't want to lose the property tax deduction because that's our biggest expense. Not knowing what the income levels are for the new tax brackets are, I don't know if my income taxes would go up but I would be surprised if they wouldn't.
http://www.cnbc.com/2017/04/26/the-white-house-just-outlined-its-tax-plan-heres-whats-in-it.html
http://www.cnbc.com/2017/04/26/the-white-house-just-outlined-its-tax-plan-heres-whats-in-it.html
Re: Trumps tax plan
I didn't see the property tax deduction talked about (unless I missed it), but it did talk about eliminating the mortgage interest deduction.
But, to me, it's a lot of meaningless without knowing what the new tax brackets are.
I read in a different article that lowering the corporate tax from 35% to 15% would mean $2.4 trillion dollar loss in federal revenues over the next 10 years. That's trillion. With a T. And why in the world would corporations get to pay a lower tax than most citizens?
Sorry, I know this isn't the political board. But I'm finally having the "aha" moment of Trump's ulterior motive con game in becoming President.
'Cause I guess whatever a business doesn't pay into taxes, they can re-invest in the company and pay out more for updates, research, employees, benefits, and buy more whatever (land, materials, employees) they need to expand. Or, am I crazy?
Does this tax break extend to all businesses from large corporations down to the little mom and pops? If so, I totally see it being a good thing, especially if the "little guys and gals" are included.
But if I was writing the tax code from scratch, there would be no deductions, and we would just pay a marginal rate on income and a lesser rate on capital gains, plus I would impose a consumption tax similar to VAT in Europe, in lieu of state sales taxes. Functionally this means your tax return would be a single page, and employers would be able to withhold EXACTLY the right amount of tax from your paycheck. It would help close the tax gap - which is currently around $400 billion - because compliance would be simple, and people wouldn't be able to use employer withholdings as a way to manipulate the system. The IRS would also be able to audit far more people each year.
The only reconciling I would do on a tax return is allow a tax credit for charitable contributions up to a certain percentage of the tax paid - say 25%. So if my total tax liability is $40,000, I have the option to send $10,000 of it to charities of my choice, and I can get a refund for that credit. This would dramatically increase charitable contributions - because I'm pretty sure EVERYONE would rather send money to charity than to the IRS. And charities are often better equipped to help serve local needs than the federal government.
In exchange I would like to see a single payor health system and lower marginal rates.
I know it's a pipe dream, but that's what I would do. Regardless, we need some new policy. The last time the tax code was overhauled was 1986. I'm most interested to see what happens with partnership and corporate taxation - not in terms of rates, but in terms of HOW those entities are taxed. Currently corporate/deal lawyers spend an awful lot of time structuring transactions to maximize pass-through taxation of partnerships and minimize double taxation of corporations, and word on the street is that these sections might finally be overhauled so that LLCs and corporations are treated the same way. That would literally change everything in my world.
https://www.whitehouse.gov/the-press-office/2017/04/26/briefing-secretary-commerce-steven-mnuchin-and-director-national
My understanding is that the tax cuts are also geared toward small business as well at least.
In any case, the plan as written has almost no chance of passing the Senate. They can only avoid a Democratic filibuster if they can prove the plan won't increase the deficit outside of a ten year window, which they have yet to do. Whatever ultimately passes will be either much less drastic or temporary.
Speaking of Reagan, the whole "we'll make up for in growth what we lose from corporate revenues" is sounding really Trickle-Down Economics-esque.
Which doesn't work.I also think we need a balanced budget amendment with a provision that requires us to actually pay off the debt in some reasonable time frame.
@MommyLiberty5013 there was no POA in my current case - her ex-husband literally forged her signature. It happens all. the. time. I would say that in most marriages one person "does the taxes" and then the other person just signs assuming they are fine. But once you sign, the IRS can go after you for the entire amount. Of course you trust your spouse to do the right thing and report everything honestly, but I have seen taxes get screwed up by one spouse who then keeps the other spouse in the dark on a number of occasions. In one of my cases the spouse who falsified everything literally disappeared, and the IRS could not find him... so they went after the guy's ex-wife instead who was on a need-to-know basis about the family's finances for her entire marriage to him. He had formed multiple companies that she did not know existed.
I would like a system where everybody has to file their own returns to avoid those kinds of situations. It disproportionately affects women. The vast majority of innocent spouse cases are women. Literally one of the factors the IRS looks at is whether there was physical abuse in the relationship. The whole framework is appalling, and since our current system disincentivizes filing separately there are a lot of people (women) who get caught by it. At the very least people should be able to choose whether to file jointly or separately without there being penalties for choosing one vs. the other.
However, regardless, at least in our circumstance, it'd still be me doing both of ours. So maybe it helps someone, but I don't see how it would stop either spouse from saying "go ahead and do our taxes and let me know where to sign".
Sorry, not trying to be a jerk, but I just finished helping my parents do theirs across state lines. Joint federal + mock separate federals for each parent + resident Virginia + resident North Carolina + non-resident Virginia (my parents are in the process of retiring/moving). That's in addition to my brother's return and my wife and I's joint return.