Tax Reform Under Trump 2017

So much this. The more people are thrown onto the individual market, with no individual mandate (with actual teeth) in place, young (20’s/early thirties) healthy people will say, fuck it, I’ll take my chances, driving up the premiums for the rest of the participants in the market, causing yet more to drop out because they can’t afford the premiums. More visits to the emergency room ensue, only some of which patients actually pay for. That care has to be paid for somehow so prices negotiated with group insurers go up, leading to higher premiums there.

I can’t believe that there is anyone who hasn’t observed that, over time, cost shares for health care coverage at work have become a thing*, copayments have gone up, etc., and employers are encouraging people to do the HSA thing instead of choosing something like Kaiser.

*when I started at my company in '94, health care coverage was fully paid for by the company. Less than 10 years later there was already a cost share.

Worse, every year the cost of our benefits goes up at a significantly higher rate than our pay and, to stem those costs as best as possible, the plans get a little shittier every year. I’ve been taking effective pay cuts for five years now, despite getting raises every year.

And that’s definitely going to get a lot worse now that the mandate is gone.

This is not true. People don’t stop using all healthcare just because they don’t have insurance. Who do you think pays for that when they don’t pay?

A house bought 10 years ago at $600-650k in an area in CA that has seen increased valuation, can easily cost $9-10k of property taxes, even with prop-13 enforced assessments. I am not sure why you couldn’t qualify for $500k loan on $120k income - credit score and loan-to-value ratios also matter.

Like I said, $130-150k household income, $10k property tax and $500-600k mortgage is extremely common in Bay Area. The resulting loss of CA income taxes, plus CASDI, plus other taxes like VLF from itemized deduction total is a big deal.

May be in RI, but not in CA. You can do the math yourself - $150k household income, $9-10k property tax, $22-25k mortgage deductions, for a family with no child. They will pay more in taxes.

I can’t disagree more. To get more tax revenues from those earning million dollars or more, you can increase the tax rate in the highest bracket. There is no need to put an idiotic cap that affects everyone (and includes double taxation) while at the same time reduce the tax brackets so people with extremely high income end up with disproportionately less taxes.

Getting more tax revenues from highest earners was never a goal in this new tax plan in any case.

The mortgage is still deductible. For a CA couple with 9K property tax 6200 in state income tax 24K mortgage.
I find their tax liability to be $17,153 under the current system and $16,792 so slightly lower in the new plan. The numbers are certainly close so it is possible is some case they may pay more, but after running a dozen case I’ve yet to find one, where people pay more under the new system. Anyway please show me the math where I’m wrong.

Well, I could point to dozens if not scores of case deductions are phased for high earners this is true in both the federal and most case state income tax. Generally, the party pushing for these phaseouts was the Democrat, (at least when there were a true progressive party instead of focused on lowering tax for the elite members). Certainly, raising rates at the top is another way of making the tax system more progressing. I find dropping the rate to be one of the worse.things the new tax law does.

However if you talked both liberal and conservatives economist about the right approach to reforming the tax code, both side would talk about “lowering the rates and broadening the base.” Broadening the base means cutting exemptions that benefits the few at the expense of the many.

Your taxes in the country should be a function of exactly two things. How much you make and how many people in your household. Period.

It shouldn’t be a function of how much you give to your church, or the local dog shelter, or Daughters of the American Revolution. It also shouldn’t be a function for a big house you live in, how much you pay for your nursing home, or your Nanny, if you chose to live in low or high tax state.

It certainly should not allow such travesty as was allowed under the old tax code, of allowing Rich taxpayer A to take out a very low interest “mortgage” to buy a sports car, yacht, or $300K kitchen and getting a tax deduction. While forcing poor taxpayer B who doesn’t own a home to pay both a higher interest and not allowing any interest deduction for his pick up truck or fishing boat.

By moving the country from a situation where 70% take the standard deduction to probably 90% do, we are moving to a fairer and simpler system.

I’d buy into it more if they hadn’t changed the estate tax, and hadn’t lowered the top rate.

I’d buy into it more if it didn’t doom my kids into paying for it.

From the calculators posted here and elsewhere, it looks like I’m liable to save a huge amount, personally. But that’s short-term thinking – SOMEONE has to pay for that $1.5T eventually. And if the GOP is right and a future congress makes the personal cuts permanent a few years down the line, the total bill will end up being far more than that.

So the price for making my personal life more comfortable for five years or so is presenting me and my kids with a massive bill a decade from now.

I’m basically being handed a wad of cash now while only half-being aware of the loan in my name that was used to secure it.

At least here the teachers are now paying for part of their insurance coverage when at one time they didn’t. That amount will only increase over time. The same thing is happening for many workers on the private side as well.

They ended up not making that much of a dramatic change on the estate tax though, if I remember right. As for lowering the top rate, I agree with you there.

They doubled the exemption to eleven million dollars. The last estimate I saw is that it is expected to cost the treasury $60 billion.

Yup, here’s an article about it: https://www.forbes.com/sites/ashleaebeling/2017/12/21/final-tax-bill-includes-huge-estate-tax-win-for-the-rich-the-22-4-million-exemption/#23fb4ce51d54

Yeah, it’s 11 million per person too, which means that for a couple it’s effectively 22 million.

That’s a long way from just getting rid of it though. And really, a proper tax accountant and attorney would find a way to hide that much anyway.

Are you sure about this? When a decedent has a living spouse, presumably there is no tax because the spouse usually co-owns all their property. So the estate tax would usually only apply to unmarried decedents.

Yep.

This is due to a law they passed in 2013, that allows for portability of the estate tax exemption.

It allows for a surviving spouse to use the estate tax exemption of the deceased. So, one person dies, and instead of using their exemption, it transfers to their surviving spouse. Then, when they die, they get to use the exemption of both people.

(correction, this portability existed prior to 2013, but was made permanent in 2013)

You can try http://www.taxplancalculator.com. CA, married filing jointly, 150k household income, no children, 10K property tax, 22K other deductions (which I’d consider on the low side). That family 'd pay more tax.

Reduce the income to $130k, now they’ll pay even more tax.

There’s nothing fair in this new tax bill. It could have solved long standing problems permanently but it didn’t. The bill removed permanent personal exemptions that were available to 100% of the population, and balanced it by expanding child credits that will expire in few years. All the give and take at the middle-class and upper middle class level were simply done to keep the deficit under the limits where the bill could pass with simple majority, and the highest earners and/or those organizing their income as pass-through business, would get highest returns.

Paying more taxes is fine, but not when it’s done for the benefit of highest earners.

Huh. TIL. Thanks, Timex.

Ya, I only learned it this past year.
It’s why the argument that the old estate tax was harming farms and stuff was bullshit.

At $5.5M, it was possible to have an impact. But at $11M? The number of “family farms” impacted was essentially negligible… and they were freaking rich people. If you have $11M in assets? You are fucking rich as shit.

Jetblue is doing $1000 bonuses too.

What the hell is going on with this… I do not understand the company’s angle on this at all.

If I make some really good investments and I make 10 million dollars, I pay capital gains on that. But if that income comes from inheriting, my net worth jumps by 10 million tax free. It should at least be taxed as much as capital gains.