Tax Reform Framework

[Craigy]

Only way tax prep goes out of business is if personal income tax is abolished.  1040EZ is already 1 page.  Tons of people with a W2, a mortgage interest statement and a 1099 for their $11 of interest on their checking account still pay tax preparers to file their taxes.

Plus, as mentioned above, these H&R blocks make tons of money essentially payday loaning tax refund money.  People love to walk out with a check.

[amphora]

I think this is dead in the water.

I can't imagine the the loss of the state tax deduction if Trump counts on support from CA/NY Congressional Republicans. Also the pass through tax break seems designed to specifically give Trump himself a tax break.

Also, this will require 60 votes in order to not end after 10 years.

[StarTrekDoc]

What a Californian Republican exists? 

Issa almost lost last year to a novice.   Sunsets always the problem.  Was so the last Bush cuts too.

The whole reason for 'repeal/replace' was to get more $$$ to reconcile to make tax reform balance.   Now their job is a lot harder because of less $ to play around with 'reform'

 

[SwanSong]

hightower wrote:

None of this is any surprise of course, given the ego maniac, twitter freak they elected president.

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You know, this forum is a lot better without attack politics.  I guess it's not a rule, but it's simply a suggestion.  You come across as more rational, and it doesn't add anything to the conversation to get like this.

[SwanSong]

StarTrekDoc wrote:

The whole reason for ‘repeal/replace’ was to get more $$$ to reconcile to make tax reform balance.   Now their job is a lot harder because of less $ to play around with ‘reform’

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I wonder if the thought might be to add another tax bracket as a bargaining chip to bring more Democrats on board with a higher tax bracket.  There was some talk in the White House of making a 44% tax bracket.  That would certainly generate more revenue and mitigage the talk of "tax break for the rich" talk.  It's interesting that the capital gains tax again is left alone.  All of this talk about taxing the "rich," and yet no one ever goes after that one.

[StarTrekDoc]

There's a reason --- the long term capital gains and dividend helps all boats across the tax spectrum.   There's little/no support for a HIGHER tax bracket, especially at the 44% level (aside from uncle Bernie who would use that for single payor healthcare--not a bad idea, but not passable in USA).

What's proposed is already going to be a Herculean lift.  The SALT (State And Local Tax) provision is a major hurdle.   Not only CA/NY but swing states going to be some fighting --

• Minnesota 9.85%


• Iowa 8.98%


• New Jersey 8.97%


• Vermont 8.95%


• Wisconsin 7.65%

[djohnflatfeecfp]

I shared this with my clients last week.  Years ago I met my first person who made 8 figures annually.  He never complained about how much he paid in taxes.  His comments were always directed at why did he pay more because his income was higher than the person who inherited their wealth.  Bloomberg had a nice article on it too. https://www.bloomberg.com/news/features/2017-09-12/why-american-workers-pay-twice-as-much-in-taxes-as-wealthy-investors

Considering I don't expect much to happen with substantive tax reform I certainly hold out no expectation they would consider anything where income tax cuts are offset by changes to how unearned income is taxed.

On a side note, I am already getting emails from all my CPA contacts about the upcoming tax changes.  I have so far fought the urge to respond asking them to specifically identify which ones will go into effect.

[ScientistPhysician]

I've never understood why so many docs have historically backed republican tax plans.  Apparently they enjoy paying high taxes on wage income to subsidize low capital gains taxes for people who are already wealthy.

[MPMD]

StarTrekDoc wrote:

Just like healthcare process — the devil is in the details and I don’t think they will do that either and end up with a crappy partisan vote that goes no where.

It would great to see some bipartisan work on this and maybe, just maybe, it’ll get some life in it.

I can see it getting muddled with DACA and Immigration bill or at least with Budget and ceiling extension since that was punted to holiday season.

As others have said — snowballs chance at this time, but, hey at least they are talking and ‘trying’.

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:lol:  :lol:  :lol:  :lol:

[djohnflatfeecfp]

Good article here.  Short version is the numbers are not adding up right now for permanent tax cuts approval via reconciliation process.  Either net tax cuts need to be scaled back, revenue increased, cuts become temporary or 8 Democrats come on board.  https://www.forbes.com/sites/anthonynitti/2017/09/27/release-of-gops-long-awaited-tax-plan-reveals-exactly-why-tax-reform-is-so-hard/#1e64f0414597

[StarTrekDoc]

Good read and breakdown of the process and reasons.  Not bad for a guy recovering from anesthesia.

This is why they wished healthcare to pass first to give them precious dollars to pass the tax reform in reconcilation.

 

[nachos31]

Great explanation/analysis--thanks for sharing that article.

[jfoxcpacfp]

Listened to Pat Toomey interview this morning and he said any corporate tax reduction will exclude professional services. He specifically mentioned doctors, accountants, and hedge fund managers - I'm in rarefied company.

While I think there is a lot of tweaking to be done, I'm cautiously optimistic.

[StarTrekDoc]

Ha;  conveniently lawyers not mentioned in that bunch

[jfoxcpacfp]

StarTrekDoc wrote:

Ha;  conveniently lawyers not mentioned in that bunch

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They would be included, also  . This was just an interview, not a testimony, and just threw out examples.