I'm gonna go ahead and vouch for someguy. Not because I know him, but I know enough about taxes that I understand his comments. He's right on point. The big tax deductions are heavily skewed to the wealthy. One of the reasons (although not the main reason) I bought a home was in fact to take advantage of the mortgage interest deduction, and if this passes, that benefit is nowhere near as valuable.
Trump Tax Reform and Home Prices
- Thread starter Goriot
- Start date
NEW -> Contingent Buyer Assistance Program
Some guy is right. Just a big tax break for the ultra rich and a big fu to upper middle class in coastal states with big state taxes.
For most of us here in Irvine, we get hit with amt because of the property tax and state tax deduction. Remove the deductions and we wouldn't hit amt anyway. This only benefits the super rich like trump.
Don't worry, this will never pass in its current. This is just like the health care bill. Won't make it out of the house.
This is coming from guy who pays way more taxes than I think I should. This won't help me at all and will probably be a net negative.
Food for thought:
Jack and Jill earn degrees, get jobs, work their butts off for 50 weeks to bring home $200k. Their top tax bracket is 25 or 28%. In aggregate, they might end up paying 20% for federal tax, and state tax, FICA etc...
Mr. Richguy inherited $1o mill and puts all of it in safe bonds earning 2%, that is $200k. He sits on his butt entire year and write a check to IRS for 15% capital gain. No FICA and all the crap. And, in all likelihood, he will have bunch of tax shelter mechanisms in place so that he has to pay even less than 15%.
Dear Jack and Jill, keep working hard, buy car, buy gas, buy clothes, put your kids in daycare, travel for work..keep economy engine humming and we'll screw you at tax time so that Richguy can...who know...spend entire year outside USA vacationing and pay less taxes while doing absolutely nothing to contribute to the economy.
Revenue act of 1913.
Income Normal rate/Additional rate/Combined rate
0 1% 0 1%
$20,000 1% 1% 2%
$50,000 1% 2% 3%
$75,000 1% 3% 4%
$100,000 1% 4% 5%
$250,000 1% 5% 6%
$500,000 1% 6% 7%
Exemption at $3k (single) and $4k (joint). $20K put you in the lifestyle of the 1%-ers at that time. Most people didn't pay any federal income tax when it started.
But the State tax deduction is one of the first things (along with property taxes) gets taken away once you hit AMT...ask me how I know.
Wah. I can't pay off my mortgage.
#MortgageDeductionMatters
A budget resolution was passed by the Senate (50-50 + tie breaker vote by Pence). This opens the door for the reconciliation process where Congress comes up with a bill that then would only need 51 votes in the Senate to be approved. Without reconciliation it would have taken 60 votes which would have needed bi-partisan support. Congress is currently coming up with their bill and not much is known about it at all. Initial talks were about doubling the standard deduction, getting rid of state and local tax exemptions, getting rid of the estate tax, reduction of incremental tax rates, lowering of the corporate tax, limits on 401k plans, taxation of employer provided health insurance, $1.5tn deficit. CA/NY/NJ are opposed to getting rid of state and local tax exemptions and if they decide to not support the bill, it could not pass a vote in Congress. Let's see how much our representatives care about the fact that we'd be paying more in taxes.
undecided said:
Some guy is right. Just a big tax break for the ultra rich and a big fu to upper middle class in coastal states with big state taxes.
For most of us here in Irvine, we get hit with amt because of the property tax and state tax deduction. Remove the deductions and we wouldn't hit amt anyway. This only benefits the super rich like trump.
Don't worry, this will never pass in its current. This is just like the health care bill. Won't make it out of the house.
This is coming from guy who pays way more taxes than I think I should. This won't help me at all and will probably be a net negative.
Well, the sweetest deal is that although personal income at the top is going to 35%, corporate tax is going down to 15%. This is immensely beneficial to anyone running a pass-through entity.
Then again this plan will blow up the deficit in the trillions of $$ over the next decade so that sucks for all of us and our children.
Then again this plan will blow up the deficit in the trillions of $$ over the next decade so that sucks for all of us and our children.
usctrojancpa
Well-known member
It'll never pass as it was presented, it will be horse traded and we'll get some kind of muted version of this.
Cornflakes
Active member
Irvine Dream said:
Food for thought:
Jack and Jill earn degrees, get jobs, work their butts off for 50 weeks to bring home $200k. Their top tax bracket is 25 or 28%. In aggregate, they might end up paying 20% for federal tax, and state tax, FICA etc...
Mr. Richguy inherited $1o mill and puts all of it in safe bonds earning 2%, that is $200k. He sits on his butt entire year and write a check to IRS for 15% capital gain. No FICA and all the crap. And, in all likelihood, he will have bunch of tax shelter mechanisms in place so that he has to pay even less than 15%.
Dear Jack and Jill, keep working hard, buy car, buy gas, buy clothes, put your kids in daycare, travel for work..keep economy engine humming and we'll screw you at tax time so that Richguy can...who know...spend entire year outside USA vacationing and pay less taxes while doing absolutely nothing to contribute to the economy.
irvinehomeowner
Well-known member
So just like movies/TV, this is essentially a reboot.
Maybe someone with tax history knows but how did Fed taxes start in the early days? Was it just a flat tax? And then over time they added brackets and all those special interest deductions?
I should Wiki this but every year I do my taxes, I really wish it was just a simple tiered tax with only major deductions for home ownership and other big things (charity and state decuctions should be kept).
Maybe someone with tax history knows but how did Fed taxes start in the early days? Was it just a flat tax? And then over time they added brackets and all those special interest deductions?
I should Wiki this but every year I do my taxes, I really wish it was just a simple tiered tax with only major deductions for home ownership and other big things (charity and state decuctions should be kept).
"Doubling the standard deduction could severely marginalize the mortgage interest deduction, which would reduce housing demand and lead to lower home values," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas."
"By doubling the standard deduction and repealing the state and local tax deduction, the plan would effectively nullify the current tax benefits of owning a home for the vast majority of tax filers," said NAR's President William Brown."
Source:http://thehill.com/policy/finance/3...tgage-interest-deduction-at-risk-in-trump-tax
"By doubling the standard deduction and repealing the state and local tax deduction, the plan would effectively nullify the current tax benefits of owning a home for the vast majority of tax filers," said NAR's President William Brown."
Source:http://thehill.com/policy/finance/3...tgage-interest-deduction-at-risk-in-trump-tax
irvinehomeowner said:
Revenue act of 1913.
Income Normal rate/Additional rate/Combined rate
0 1% 0 1%
$20,000 1% 1% 2%
$50,000 1% 2% 3%
$75,000 1% 3% 4%
$100,000 1% 4% 5%
$250,000 1% 5% 6%
$500,000 1% 6% 7%
Exemption at $3k (single) and $4k (joint). $20K put you in the lifestyle of the 1%-ers at that time. Most people didn't pay any federal income tax when it started.
sgip
Well-known member
The game changer is altering / removing the State tax deductibility. Example:
A) Re-do your 2016 returns on Turbo Tax/Tax Cut by zeroing out your State tax paid on your W-2
2) Recalculate.
III) Scream into a pillow.
This is the UFIA to California and New York for being solidly in the D column.
My .02c
SGIP
A) Re-do your 2016 returns on Turbo Tax/Tax Cut by zeroing out your State tax paid on your W-2
2) Recalculate.
III) Scream into a pillow.
This is the UFIA to California and New York for being solidly in the D column.
My .02c
SGIP
usctrojancpa
Well-known member
Soylent Green Is People said:
But the State tax deduction is one of the first things (along with property taxes) gets taken away once you hit AMT...ask me how I know.
sgip
Well-known member
Also agreed. Removing the AMT is a very big step in the right direction. Without AMT hit, won't more mid to high income earners pay more once the State tax deduction is removed? Seems like a homeowner with $200k income won't be AMT'd, but they do rely on State tax deductions to reduce Federal taxes. W/O that deductibility, it's a tax increase then for the mid to high income bracket, no?
SGIP
SGIP
irvinehomeowner
Well-known member
qwerty said:
Wah. I can't pay off my mortgage.
#MortgageDeductionMatters
Zion said:
A budget resolution was passed by the Senate (50-50 + tie breaker vote by Pence). This opens the door for the reconciliation process where Congress comes up with a bill that then would only need 51 votes in the Senate to be approved. Without reconciliation it would have taken 60 votes which would have needed bi-partisan support. Congress is currently coming up with their bill and not much is known about it at all. Initial talks were about doubling the standard deduction, getting rid of state and local tax exemptions, getting rid of the estate tax, reduction of incremental tax rates, lowering of the corporate tax, limits on 401k plans, taxation of employer provided health insurance, $1.5tn deficit. CA/NY/NJ are opposed to getting rid of state and local tax exemptions and if they decide to not support the bill, it could not pass a vote in Congress. Let's see how much our representatives care about the fact that we'd be paying more in taxes.