Most people are getting tax cuts (only temporary though as the changes aren't indexed for inflation), but the biggest beneficiaries are the rich. It continues to grow an already massive deficit. Here in Georgia, where the standard deduction is tiny ($2,300 for single, $3,000 for MFJ), those that itemized in the past are going to lose every dime they might have been saving. That aspect doesn't really bother me despite it specifically hurting me, but that isn't putting more money in people's pocket. Once we have a finalized bill, it will be interesting to see it. One thing they don't really seem to be accomplishing is simplifying the tax code.
If you want an equivalent situation then you'd have nearly half of the states paying nothing at all in taxes and have California, Texas, and New York pay 60% of all taxes rather than a number in the 30's. So to be "fair" we need to double the taxes paid by those 3 states and completely eliminate taxes paid by the 25 poorest states. Let's get on it.
I'm happy about the middle class getting a tax cut, its just the majority of the tax break benefits go to a very, very few ultra rich. The bill didnt have to be setup that way.
Can you please link to facts that show the "majority" of the tax breaks go to a very, very few ultra rich? How do you define "majority"? I'm open minded to hear what you have to say.
The Estate tax repeal (or just an increase in the exemption for the Senate bill) No more AMT in the House bill Those are the two big obvious inclusions for the rich, not the middle class.
The AMT starts kicking in at 150k. I have a friend who is very middle class who is paying it. I've looked into it, and it appears the House version of the bill is considering raising the limit where it kicks in...but haven't found any info about what the amount might be. If you have the info, I would be grateful if you provided it. The Estate tax repeal would eliminate double taxation. The money was already taxed once. I don't begrudge anyone for that repeal, even the rich.
AMT still doesn't end up affecting most people. For most that it does, it is from adding back State Income taxes and personal exemptions, which would no longer be deductible. I'm for repealing it, but it was a total move for the wealthy. The estate tax isn't really double taxation. So much of your estate includes built in gains that you were never taxed on. When you die, your heirs receive stepped up basis in the assets.
If they were eliminating the AMT alltogether, then yeah I would agree. However, I don't' agree that folks that make 150K are "wealthy" as you describe them. As for the state and local exemptions you mention, many folks live in states where that doesn't apply. I'm assuming you don't have a link for the AMT changes? If the money was TRULY never taxed ever, I would agree with this. But I have a really hard time believing this happens. Can you give examples of "built in gains that were never taxed"?
I've only been doing tax returns and tax planning for the last decade. I see hundreds of them a year, from people making less than $10K to people making $10M. I didn't describe folks that make $150K as wealthy. The few non-wealthy people that pay AMT, do so as the result of something that will no longer exist (the add back of state income tax deduction and personal exemption deduction). Built in gains that were never taxed? I own a CPA firm. If I die, my heir can sell the firm tax free because their basis in my company would be the FMV on my date of death. I didn't pay taxes on that Goodwill. It was value created out of thin air. Think about somebody like Zuckerberg. He created Facebook for basically nothing. If he dies, his heirs can sell all of his Facebook stock with no income tax paid on the value of the stock. If he sells it in life, he will pay income taxes on virtually all of it because he has no cost basis. The wealth gap is one of the major issues facing our country, and the estate tax repeal would widen it. Does money get double taxed? Sure, but don't I get double taxed when I pay sales tax? What about fuel tax? What about intangible tax? Property tax? Occupation tax? I pay so many of them it makes my head spin. I'm all for cutting spending, so we can cut taxes, but we'll cut taxes and grow spending. This is the tired reality of my lifetime.
Not sure what you mean by 'for the wealthy'? It was designed to target the wealthy...is that what you meant? It certainly doesn't give them anything. Then capital gains taxes would/should apply, and the estate tax still wouldn't be necessary. Anything beyond that is definitely double taxation. Someone earns, say $1M, and pays all the associated taxes on it. They then give it to someone else, who then pays taxes on it...again! That said, the estate tax exemption is quite large. $5.4 M currently.
Eliminating AMT, is a benefit for the wealthy. They are the targets of its existence, and usually who pays it (keep in mind in that year we saw Trump's return it was the only reason he paid income taxes). The problem is it is often hard to find historical cost basis for a deceased person. Most large wealth is not built with salary, it is built through stock and real estate appreciation. When the exemption was only $1M and not indexed for inflation, it was certainly a far different story. The ultimate goal of the estate tax is to spread the wealth. To get $$$ spent directly into the economy. To prevent too few families from controlling too many assets.
So, the tax cut cuts more from those who pay more taxes? That is your issue? On paper. Without adequately considering impact on economic growth. Plus, fwiw, the debt is already ginormous, and that isn't going to change. So, I'd much rather have more money in my pocket, than in the hands of some entity which is completely without any fiscal control (ie, our government). The tax cuts, even without considering economic growth, add $150 billion to the deficit. Not a huge number, and made up with even a very modest economic growth (about 1/2%, I believe). The bills do seem to hit different states differently, and also those who itemize. Fair enough, and agree---we need to see what the final bill looks like. I do hope it ends up simplifying things somewhat.
Yes, in which case at least cut the taxes. The less money I send to the crazy uncle down the street who has no fiscal responsibility, the better. Plus, the only real way to grow tax revenue is to grow the economy. Cutting taxes may or may not do that (I'm hopeful it will)...raising taxes certainly would not.
The fact that you speak with such certainty that raising taxes won't stimulate the economy is hilarious. Taxes aren't some thing where money goes to die, or given solely to the lazy and stupid. Taxes create jobs, taxes help fund projects, taxes do more so than you're giving credit. Maybe I'm not a republican with a hard R here, but I see there has to be a balance between all taxes and no taxes. Think about the bold business start-ups that are funded by grants. Where do they get that money? How about the research that drives innovation in the private sector? A lot of that work relies on research in the public sector too. So yes, raising taxes can most definitely stimulate the economy. It's a necessary evil, and above all it can give the little guy a chance to take on the big guy with a new and inventive idea. Isn't that the American dream?
So raising taxes never increases revenue? That's an interesting voodoo economic theory that you subscribe too.
If you let a rich guy pee on you long enough, eventually his piss turns into wine. Look it up, that's in the bible.
