I am all for more money in my pocket with tax cuts, however I am not convinced that these cuts "will pay for themselves" - even with dynamic scoring methods. The libertarian in me cheers for a smaller and less involved government, but cutting taxes without also reducing spending will just further add to our deficit and debt.
Either we need to cut spending and cut taxes (ideal but impossible for our elected officials), or simply acknowledge our spending cannot be reduced and come up with a simplified tax structure to support what we need.
That being said, once an entitlement is added, it becomes cruel and unusual to try to take it away, thus the natural inertia of government and programs is to forever grow... Maybe we cut taxes to starve the government, eventually programs may shrink as we cannot afford them...
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thanks for posting the link
to my mind, this is not a huge middle finger to doctors, with all due respect. i surmise there are a fair number of doctors in this group who are 1%ers who would apparently get a significant increase. depending on your personal beliefs this may or may not be unfortunate. yes the 1/3 making between 150k and 300k may pay more but it doesn't look like a huge amount more. i do feel for those who work hard and are in HCOL areas where 150k may not be that much, but for 1-2k differences, it is not enough to make me meaningfully change behaviors.
i'm pretty sure i accidentally pay that much extra by not being super tax efficient like most of you guys.
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from the taxpolicycenter link
(--the formatting is all messed up it was a cut and paste, my apologies)
In 2018, taxes would decline by nearly $1,600 on average, increasing after-tax incomes by 2.1 percent (table 2). Tax payer groups in the bottom 95 percent of the income distribution would see modest tax cuts, averaging 1.2 percent of after-tax income or less. The benefit would be largest for tax payers in the top 1 percent(those making more than $730,000), who would see their after-tax income increase 8.5 percent.
In 2018, about 12 percent of taxpayers would face a tax increase of roughly $1,800 on average. More than a third of taxpayers making between
about $150,000 and $300,000 would pay more, mainly because most itemized deductions would be repealed.Leave a comment:
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According to the Tax Policy Center, 60% of individuals making $150,000-$300,000 will see a tax increase. On average, people in that income group will pay $800 more in taxes with the Trump plan.
http://www.taxpolicycenter.org/publications/preliminary-analysis-unified-framework/full
This is a huge middle finger to doctors, the most heavily taxed group in America with no relief.Leave a comment:
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I wasn't referring to anything you said, sorry. It's just a common thing that rebulicans have campaigned on for years. I was pointing out the irony of their current plan in light of what they claimed they would do.Leave a comment:
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What, you can't make final calculations on tax burden on the comprehensive, complete 7 -page proposal on tax reform?
I do agree - for the vast majority this shuffling the deck chairs. If it simplifies, I'm all for it. I do hope that the LLC for our business will lower -- that would definitely probusiness move for many middle America to level field against big corporate America (and a giant loophole too so have to be careful when fluffing out that 7 page executive summary).Leave a comment:
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I have read nothing in the proposals and analyses thereof to make me believe that I (and most docs) will benefit from lower taxes from the changes that will be advanced. At best, I will break even. With the minimal amount of detail provided, it is impossible to tell for certain. I guess if the 15% tax bracket goes to $500k, and the 25% bracket to $1M, then, yeah, sure we will all likely benefit, but that ain't gonna happen.Leave a comment:
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I’m actually for a simpler, easy tax code — it levels the playing field to a reasonable amount of tax avoiding strategies — and then what will this and Bogglehead forums talk about with that mostly gone !?!
I fully support tax code simplification, flat tax, etc. but have zero hope that it will ever come about.Leave a comment:
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AMT is actually the flat tax that people have been yammering about over years, and now hitting upper middle class folk -- and they don't like it.
Well, it's a flat tax system --- too many deductions pushes one into AMT. We hit it long ago with being in Cali and all our deductions.
I'm actually for a simpler, easy tax code --- it levels the playing field to a reasonable amount of tax avoiding strategies --- and then what will this and Bogglehead forums talk about with that mostly gone !?!
Leave a comment:
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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.
The real gift to Trump and other uber wealthy Americans is the elimination of the AMT. Trump gets hit hardest by this when he does actually pay taxes, so it’s no wonder it’s first and foremost on his list of priorities. It’s kind of hilarious how blatantly selfish he is.
catch me up. aren’t there complaints over the years that the AMT has crept up and snagged a bunch of so called middle class americans?
we have been over the top of amt for as long as i can remember. which these days, isn’t that long.
AMT is bad and should be removed.Leave a comment:
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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.
The real gift to Trump and other uber wealthy Americans is the elimination of the AMT. Trump gets hit hardest by this when he does actually pay taxes, so it’s no wonder it’s first and foremost on his list of priorities. It’s kind of hilarious how blatantly selfish he is.
catch me up. aren't there complaints over the years that the AMT has crept up and snagged a bunch of so called middle class americans?
we have been over the top of amt for as long as i can remember. which these days, isn't that long.
Leave a comment:
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So much for “simplifying the tax code.”
I don't recall mentioning this.Leave a comment:
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I think your argument with benefit from just a little bit of nuance. Here is a refresher about the tax choices that we had last year in the US Presidential election:
https://www.nytimes.com/2016/08/13/upshot/how-hillary-clinton-and-donald-trump-differ-on-taxes.html?mcubz=3&_r=0
Clinton would have modestly increased income tax by 4% on very high income earners (>$5m/year) and raised AMT to 30% for people with >$1m/year. This would not have affected 99% of doctors. So essential tax rate for vast majority of doctors would have been about the same. However, the relative tax burden on doctors compared to investment income earners would have been significantly decreased. I don’t mind paying my fair share, it just kills me to pay about double what investors make.
Income is income, why should the sweat of my brow be taxed higher than the passive returns of an heir/heiress who has accomplished nothing other than to be born to someone who died wealthy?
EDIT: I will just add that Clinton’s tax plan would have added $1.1 trillion in federal revenue, the republicans will likely drive us even further into debt by at least this much with their tax cut’s pay for themselves delusion. The choice for economic sanity in the long run should also count for something.
Hit the nail on the head. It's a joke how backwards our system is. Doctors get hit especially hard by this system unless you are savvy enough to find a way to either a.) become independently wealthy and live off of your capital gains/dividends (what most of us are striving for) or b.) set up a pass through corporation and pay the reduced corporate rate, which is becoming rarer these days with the corporate take over of healthcare. Most docs are W-2 employees so our income is heavily taxed with little opportunity for deductions other than the mortgage interest and charitable giving.
Meanwhile Warren Buffett pays only like 17% effective rate and he's worth over 60 billion dollars. Yet we "cant' afford" to balance the budget and all sorts of other things that would actually benefit society (healthcare, the national parks, infrastructure, renewable energy, etc).
And what's sad is most Americans are blissfully unaware of how uneven the playing field is because they're busily distracted by consumerism. As long as they can afford to buy a new iphone or giant TV with their tax refund, they're happy as a clam.Leave a comment:
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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.
The real gift to Trump and other uber wealthy Americans is the elimination of the AMT. Trump gets hit hardest by this when he does actually pay taxes, so it's no wonder it's first and foremost on his list of priorities. It's kind of hilarious how blatantly selfish he is.Leave a comment:
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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.
So much for "simplifying the tax code." The pass through corporations will continue to flourish (and likely grow because of the reduced tax rate) because there's no way for the IRS to accurately distinguish between labor income and business income.
"The problem is that trying to differentiate between the two could require a lot of detailed work by companies to justify their breakdown of labor versus capital income — and intrusive efforts by the I.R.S. to ensure they follow the rules."
https://www.nytimes.com/2017/09/27/upshot/the-republican-tax-plans-magic-asterisk.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-newsLeave a comment:
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I think your argument with benefit from just a little bit of nuance. Here is a refresher about the tax choices that we had last year in the US Presidential election:
https://www.nytimes.com/2016/08/13/upshot/how-hillary-clinton-and-donald-trump-differ-on-taxes.html?mcubz=3&_r=0
Clinton would have modestly increased income tax by 4% on very high income earners (>$5m/year) and raised AMT to 30% for people with >$1m/year. This would not have affected 99% of doctors. So essential tax rate for vast majority of doctors would have been about the same. However, the relative tax burden on doctors compared to investment income earners would have been significantly decreased. I don't mind paying my fair share, it just kills me to pay about double what investors make.
Income is income, why should the sweat of my brow be taxed higher than the passive returns of an heir/heiress who has accomplished nothing other than to be born to someone who died wealthy?
EDIT: I will just add that Clinton's tax plan would have added $1.1 trillion in federal revenue, the republicans will likely drive us even further into debt by at least this much with their tax cut's pay for themselves delusion. The choice for economic sanity in the long run should also count for something.Leave a comment:
Leave a comment: