What are the cut offs?
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Trump proposes dramatic tax cuts for companies big and small, and other tax reforms
- Thread starter Tovarisc
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What are the cut offs?
The GOP will never get rid of the mortgage interest deduction because it is a big help to the upper middle class and the rich.
A middle class homeowner may not pay enough interest to exceed the standard deduction.
Someone with a $500,000 to $1,000,000 loan though, benefits from that mortgage deduction. It is worth thousands in tax refunds.
Eliminating the mortgage interest deduction would immediately cool property prices on the coasts as the real costs would increase instantly.
gutter_trash
Banned
demosthenes
Member
This is not true at all...
If someone were to say "I'm a tax expert", 9 times out of 10 they'll be a cpa or nonpracticing cpa.
Fenderputty
Banned
Coming from California it amazes me people think this deduction only helps the upper middle class and the rich. My first house I bought in 2008 resulted in a $240,000 mortgage. I depended on that deduction
No offense, but that's California. In the Midwest, that kind of money buys you a 4 bedroom, big lawn, brick house in a nice neighborhood. My house is wood and stucco in a nice neighborhood and it's $135k. Most middle class here have my house or less.
What kind of house would you need to even make use of the mortgage deduction because it appears they will get rid of the property tax deduction right? So you would need 24k in interest? I mean that's a big loan
smokeandmirrors
Banned
Yeah but its the Midwest
Fantastic question.
water_wendi
Water is not wet!
This seems like its going to be a very hard genie to cork.
jellies_two
Member
Tax reform is hard, who knew. Trump certainly doesn't know.
That tax plan is madness, it pays almost everyone.
Maybe they know this. Maybe It's a ploy to turn around and say: this is why we must obliterate federal entitlement programs especially healthcare.
That tax plan is madness, it pays almost everyone.
Maybe they know this. Maybe It's a ploy to turn around and say: this is why we must obliterate federal entitlement programs especially healthcare.
the-pi-guy
Member
If Republicans can be responsible for the results to the economy and rising deficit, would be nice.
Pin the disaster on Republicans.
But I doubt people would notice...
Pin the disaster on Republicans.
But I doubt people would notice...
See, the anwser is to simply add tariffs to every imported product. What could go wrong?
Fenderputty
Banned
The claim was that it mostly benefits the rich. States like NY, CA and others have plenty of regular people benefitting from this. Cost of living differences among the states ensures that this will always be the case. Cooling off property values on the coats in such a quick way would also have negative effects on normal people. How many people do you think refinanced during these booms to pull some money out while interest rates are low?
RPGCrazied
Member
And anyone see how this can greatly benefit Trump's business?
I love how there are basically zero details of merit on this Tax Plan. Every time someone asks they just say they're working on the details which to me means: We have no fucking clue what we're doing but we can tell you what we want to do!
Well that's the several trillion dollar question.
Ether_Snake
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Same rate as Canada, more reasons for the can dollar to fall.
I have a $320,000 mortgage and I paid $11,000 in interest last year. That is less than half of what that proposed standard deduction would be.
To create jobs....duh.
Yeah, we gotta keep those Hilton and Trump dynasties going forever. /s
The claim was it mostly benefits the upper middle class and the rich.
And I stand by that.
Using your example of a $240,000 loan. At 3.25%, that's roughly $7700 in interest paid the first year (and less paid every year after that).
That's already lower than the standard deduction. Yes, property taxes can help reach over that hump, but as the standard deduction goes up, the mortgage deduction is less of a perk for anyone other than the high end.
If you're dropping $20k+ in interest on a home mortgage year-after-year you're upper middle class by any reasonable sense of the term.
Raising the standard deduction and eliminating the mortgage deduction would result in less taxes for the lower class, neutral for the middle class, and increased taxes for the upper class.
As for price pressure on the high end of homes, as someone living in SF, that wouldn't necessarily be a bad thing.
BlastProcessing
Member
Get rid of it? We should double it, if anything.
Many tax experts are CPAs, but I agree that it's the tax experts and economics that can explain how ridiculous this is...
(unless they support Trump on this for some reason)
Here comes the government shutdown.
Yep. Should be interesting to watch them squirm their way around this.
It would depend on where they pegged them, but it's doubtful since the thresholds would almost certainly be higher than the current ones.
What could result in a tax hike for some middle-income families is if they do away with personal exemptions like Trump's campaign proposals promised.
Abinash117
Member
There's already two posted articles in the thread that stated that GOP doesn't like it.
But why read
Ahaha, I just laughed out loud in my office.
Isn't the deadline this Friday with them still not having voted on any version yet?
Ozzy Onya A2Z
Member
Putting Trump/politics aside for a moment as a family business owner I'm curious how you Yanks would go with a lower 15% company tax rate. I want the same in Australia, crap I agreed with Trump on something... Overall I'm really curious how employment, growth, innovation, families etc would all be affected by this.
If they actually held large corporations out of this benefit and truly made it for small-medium businesses it could have a real shot at something great, some European govts have done this successfully, even greater tax cuts too. So USA you go first and then Australia will get back to you soon about following suit
When you look at tax on a sale vs staff member like this in Australia it does your head in as a company director:
Gross profit of $1.00 inc tax
less tax (called GST in Aus) - $0.09
less superannuation for employee - $0.095
less income tax for employee - $0.45 (high wage tax rate)
Net profit of $0.365
The above is grossly oversimplified but you can see why I'm interested in the impact of a 15% company tax rate in the USA.
If they actually held large corporations out of this benefit and truly made it for small-medium businesses it could have a real shot at something great, some European govts have done this successfully, even greater tax cuts too. So USA you go first and then Australia will get back to you soon about following suit
When you look at tax on a sale vs staff member like this in Australia it does your head in as a company director:
Gross profit of $1.00 inc tax
less tax (called GST in Aus) - $0.09
less superannuation for employee - $0.095
less income tax for employee - $0.45 (high wage tax rate)
Net profit of $0.365
The above is grossly oversimplified but you can see why I'm interested in the impact of a 15% company tax rate in the USA.
White House wants to push tax overhaul without Democrats
A senior administration official said Thursday the White House plans to push its tax overhaul without any support from congressional Democrats.
It's a sign of the intense partisanship over President Donald Trump's outlines for cutting tax rates in hopes of stimulating faster economic growth, increasing business activity and helping the middle class. The proposal unveiled Wednesday would also repeal several taxes that target the wealthy but eliminate many deductions they use. Democratic lawmakers say the plan would favor the wealthy and blow a deep hole in the federal budget.
An independent estimate by the nonpartisan Committee for a Responsible Federal Budget estimates federal revenue would plunge $5.5 trillion over a decade under the Trump plan, likely causing the deficit to balloon. Treasury Secretary Steven Mnuchin has suggested faster economic growth of 3 percent or more would replace the lost tax revenue, a position most budget experts dispute.
The administration official, who spoke on the condition of anonymity in order to discuss private deliberations, suggested Thursday that the White House might also find a way to work around a Senate rule that requires a 60-vote majority to pass bills that increase the deficit over the longer term. Under the rule, measures passed by a simple majority that increase the deficit expire in a 10-year window.
The official indicated that the administration might not necessarily need to follow a 10-year window, noting that budget forecasts are often inaccurate. It was unclear how the suggested maneuver would overcome Senate procedure.
....
On Tuesday, Senate Majority Leader Mitch McConnell, R-Ky., said he planned to pass a tax overhaul without Democratic support, but only if it didn't add to long-term deficits.
"Regretfully we don't expect to have any Democratic involvement in" a tax overhaul, McConnell said. "So we'll have to reach an agreement among ourselves."
Source: apnews.com/19562e912a8e4a809cadb6c3f5b7a2a7
A senior administration official said Thursday the White House plans to push its tax overhaul without any support from congressional Democrats.
It's a sign of the intense partisanship over President Donald Trump's outlines for cutting tax rates in hopes of stimulating faster economic growth, increasing business activity and helping the middle class. The proposal unveiled Wednesday would also repeal several taxes that target the wealthy but eliminate many deductions they use. Democratic lawmakers say the plan would favor the wealthy and blow a deep hole in the federal budget.
An independent estimate by the nonpartisan Committee for a Responsible Federal Budget estimates federal revenue would plunge $5.5 trillion over a decade under the Trump plan, likely causing the deficit to balloon. Treasury Secretary Steven Mnuchin has suggested faster economic growth of 3 percent or more would replace the lost tax revenue, a position most budget experts dispute.
The administration official, who spoke on the condition of anonymity in order to discuss private deliberations, suggested Thursday that the White House might also find a way to work around a Senate rule that requires a 60-vote majority to pass bills that increase the deficit over the longer term. Under the rule, measures passed by a simple majority that increase the deficit expire in a 10-year window.
The official indicated that the administration might not necessarily need to follow a 10-year window, noting that budget forecasts are often inaccurate. It was unclear how the suggested maneuver would overcome Senate procedure.
....
On Tuesday, Senate Majority Leader Mitch McConnell, R-Ky., said he planned to pass a tax overhaul without Democratic support, but only if it didn't add to long-term deficits.
"Regretfully we don't expect to have any Democratic involvement in" a tax overhaul, McConnell said. "So we'll have to reach an agreement among ourselves."
Source: apnews.com/19562e912a8e4a809cadb6c3f5b7a2a7
RPGCrazied
Member
"White House might also find a way to work around a Senate rule that requires a 60-vote majority to pass bills that increase the deficit over the longer term. Under the rule, measures passed by a simple majority that increase the deficit expire in a 10-year window."
Thanks. Missed that part. So they're going to try and find a way to not increase the deficit while having massive tax cuts?
Well, then I guess the White House isn't going to get this current plan through without Democratic support.
Ozzy Onya A2Z
Member
Here's a list of just zero income tax based countries:
-Oil tax subsidised-
UAE
Qatar
Oman
Kuwait
Saudi Arabia
-Others-
Cayman Islands
Bahrain (bank capital of the word, hundreds of international banks operate out of here)
Bermuda
Bahamas
Brunei
Monaco
Andorra
Vanuatu
Isle of Man
I find it interesting as Australia is similarly a huge exporter of natural resources and I like what the oil based countries are doing with personal tax income tax vs large utility corporations.
demosthenes
Member
And I'm a cpa too!
I think the deficit impact has to end within 10 years. Not the tax cut. Isn't that the whole point of the discussions a couple of days ago that a cut to 15% for 3 years has major impact in the second decade, whereas a cut to 15% for just 2 years does not have a long term impact, but also does not have an impact on jobs and growth?
They'd notice. It's just after ~8 years, they'd forget.
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