Latest updates to GOP tax draft bill

[RogueDadMD]

Trump isn't getting impeached unless the Democrats take the House, and he won't get thrown out unless they take the Senate.  Not even worth discussing.

The GOP would do irreparable harm to their brand if they impeached him.  That's why they aren't going to bother -- the upcoming primaries are going to feature a lot of Trump Jr's on the ballot, and many of them will win the primaries.  If they dump Trump they are going to kill off their chance at a lot of Congressional seats by alienating Trump voters.

Unless Mueller comes up with a "smoking gun" on Trump directly, he has no reason to resign, but Mueller being fired is certainly a possibility if things progress.

[MPMD]

Rogue Dad, M.D. wrote:

Trump isn’t getting impeached unless the Democrats take the House, and he won’t get thrown out unless they take the Senate.  Not even worth discussing.

The GOP would do irreparable harm to their brand if they impeached him.  That’s why they aren’t going to bother — the upcoming primaries are going to feature a lot of Trump Jr’s on the ballot, and many of them will win the primaries.  If they dump Trump they are going to kill off their chance at a lot of Congressional seats by alienating Trump voters.

Unless Mueller comes up with a “smoking gun” on Trump directly, he has no reason to resign, but Mueller being fired is certainly a possibility if things progress.

Click to expand...

That would all be true under a conventional president.

The 3 unique factors here are the following:

1. Increasingly credible allegations of the biggest scandal in modern American political history

2. Potential laundry list of very serious criminal charges against Trump, his family, and his campaign staff

3. A POTUS who doesn't believe in or engage in alliances or party politics.

 

If Mueller concludes something spicy and Trump responds by issuing pardons then trying to help Bannon primary a bunch of mainstream Republicans that's worse damage to brand than impeachment and replacement with Pence.

 

[The White Coat Investor]

Rotish wrote:

-401k pretax contribution limit to be lowered to ~10k
-property taxes can be deducted
-no state or local income tax deduction
-repeal of estate tax

http://abcnews.go.com/Politics/house-tax-plan-lowers-caps-401k-cuts-state/story?id=50861872

Click to expand...

I admit I was pretty excited about tax reform. I'm getting less excited the more of this kind of plan I hear about.

My property taxes are 1/20th my state income taxes. I wish they'd quit punishing work and punish spending instead.

The estate tax is probably fine where it's at. $10.5M and indexed to inflation seems pretty reasonable to me. Not going to affect most high income professionals.

The 401(k) thing is probably smoke and mirrors though. Even if the employee contribution is $10K, if they don't change the $54K limit it isn't going to affect me much. that one is far more important to high income professionals.

[ENT Doc]

Wow.  People have gone political cuckoo here.  There is no basis for impeachment at this point, and all evidence at this point does not point to this as a likely event.  Regarding this being a plan for the ultra rich, that is preposterous.  What was posted in the OP was a segment of the overall tax plan, was it not?  If you're going to say it only benefits the ultra wealthy then you've seemingly purposely neglected the other aspects of the plan.  The estate tax is immoral, regardless of who it benefits.  Repealing that can be justified on those grounds alone.  As for repealing the deductions, I'm fully in favor of all deductions going away.  All they do is create market distortions that don't make people realize the full cost of whatever is being deducted. Think this had nothing to do with the housing crisis?  People living in high tax states that want to provide any and all services under the sun are being subsidized by all Americans in the form of foregone revenue, which essentially translates into our national debt.  These deductions account for hundreds of billions in foregone revenue.  And repealing them is by no means immoral.  In fact it brings things back to more normal market function.

[Zaphod]

ENT Doc wrote:

Wow.  People have gone political cuckoo here.  There is no basis for impeachment at this point, and all evidence at this point does not point to this as a likely event.  Regarding this being a plan for the ultra rich, that is preposterous.  What was posted in the OP was a segment of the overall tax plan, was it not?  If you’re going to say it only benefits the ultra wealthy then you’ve seemingly purposely neglected the other aspects of the plan.  The estate tax is immoral, regardless of who it benefits.  Repealing that can be justified on those grounds alone.  As for repealing the deductions, I’m fully in favor of all deductions going away.  All they do is create market distortions that don’t make people realize the full cost of whatever is being deducted. Think this had nothing to do with the housing crisis?  People living in high tax states that want to provide any and all services under the sun are being subsidized by all Americans in the form of foregone revenue, which essentially translates into our national debt.  These deductions account for hundreds of billions in foregone revenue.  And repealing them is by no means immoral.  In fact it brings things back to more normal market function.

Click to expand...

Maybe not, but impeachment is mostly political (clinton) and once someone becomes a toxic asset things just start to happen. All the evidence we have at this point is very bad, we will see how high it goes, but its definitely not something to be brushed off. I dont think anything just changes overnight, but as this goes on I expect it will become more clear. Had totally nothing come out of the first two people different story.

[MPMD]

ENT Doc wrote:

Wow.  People have gone political cuckoo here.  There is no basis for impeachment at this point, and all evidence at this point does not point to this as a likely event.  Regarding this being a plan for the ultra rich, that is preposterous.  What was posted in the OP was a segment of the overall tax plan, was it not?  If you’re going to say it only benefits the ultra wealthy then you’ve seemingly purposely neglected the other aspects of the plan.  The estate tax is immoral, regardless of who it benefits.  Repealing that can be justified on those grounds alone.  As for repealing the deductions, I’m fully in favor of all deductions going away.  All they do is create market distortions that don’t make people realize the full cost of whatever is being deducted. Think this had nothing to do with the housing crisis?  People living in high tax states that want to provide any and all services under the sun are being subsidized by all Americans in the form of foregone revenue, which essentially translates into our national debt.  These deductions account for hundreds of billions in foregone revenue.  And repealing them is by no means immoral.  In fact it brings things back to more normal market function.

Click to expand...

It's not cuckoo dude. Zaphod and I were both clearly up last night and start talking a little politics.

We're not saying it only benefits the ultra wealthy, we're saying it's tilted towards them in a way that is telling.

From prior discussions you sound like a pretty conservative guy. Were you happy when Obama briefly proposed shutting down the 529?

[Zaphod]

The tax plan at first glance is total garbage, basically is only a corporate cut. Hopefully not a chance it passes.

[Rotish]

Where are the brackets?

[hightower]

No brackets yet. But, based on numbers they talked about in 2016, there's a good chance that those currently in a 33% bracket (myself and many, many physicians) would end up being pushed into a 35% bracket.  So, docs may see their income taxes go up.

Good news is they are keeping the 401k program intact

They are allowing SALT deductions up to 10k.  For those in LCOL areas, that will be fine.  HCOL areas will get hit by this.

They are going to still allow for the mortgage interest deduction on existing mortgages and new mortgages up to 500k.  That will also harm those in HCOL states.  I wonder what that will mean for those of us that do a cash out refinance?  I guess the new refinanced mortgage will be seen as "new" and therefore as long as it fits under the 500k limit, will still be deductible?

Another thing they haven't specified yet (because it's very difficult to do) is how they will prevent high income earners (like people on this site) from incorporating and benefiting from the lower tax rates on pass through entities.  If they lower that tax rate to 25%, most of us would have a very strong incentive to form a business and start being paid through that business instead of as W-2 employees. Am I correct on this?  If this is true and possible for me to do, I will certainly be looking into this.  I'd even be willing to start doing locums instead of my current job.

In summary:

Winners in this plan: Big business and ultra wealthy individuals who earn most or all of their income via investments/businesses

Losers: Middle to High income earners living in HCOL states who earn most of their cash via W-2's.

Doesn't make much difference either way: low to lower-middle class income earners

Do you all agree?

[VagabondMD]

Brackets here:

https://www.wsj.com/articles/republicans-stick-with-big-corporate-tax-cuts-in-house-bill-1509629510

I will likely be a loser in the Republican Tax “cut”, in the $15-25k range/year, if things stay as they are proposed.

I would also likely benefit from a large end-of-year 2017 contribution to my Fidelity DAF because my charity will likely exclusively be donated from this vehicle going forward.

[FIREshrink]

This is [bad for] anyone in a high cost of living state.

Moderated by WCI

[Zaphod]

Apparently the ability to pass through is very regulated which means docs will be hard pressed to get a break. No health care deductions for SE individuals which will really hurt, brackets increase for most docs and slight break for high earning ones, no student loan deduction. I think there are too many no gos for widely different interest groups to make this passable as current.

[Marko-ER]

This is [bad for] anyone in a high cost of living state.

Moderated by WCI

 

Hahaha, is this officially a "family-friendly" forum?

[hightower]

Zaphod wrote:

Apparently the ability to pass through is very regulated which means docs will be hard pressed to get a break. No health care deductions for SE individuals which will really hurt, brackets increase for most docs and slight break for high earning ones, no student loan deduction. I think there are too many no gos for widely different interest groups to make this passable as current.

Click to expand...

I'm definitely no expert in this area (in fact, I don't have a clue what I'm talking about), but according to this article it doesn't sound like pass throughs are currently very regulated at all.  Additionally, it sounds like trying to regulate them heavily would be very difficult.  This is a good read on the subject...

 

https://www.nytimes.com/2017/09/27/upshot/the-republican-tax-plans-magic-asterisk.html

[Zaphod]

hightower wrote:

Zaphod wrote:

Apparently the ability to pass through is very regulated which means docs will be hard pressed to get a break. No health care deductions for SE individuals which will really hurt, brackets increase for most docs and slight break for high earning ones, no student loan deduction. I think there are too many no gos for widely different interest groups to make this passable as current.

Click to expand…

I’m definitely no expert in this area (in fact, I don’t have a clue what I’m talking about), but according to this article it doesn’t sound like pass throughs are currently very regulated at all.  Additionally, it sounds like trying to regulate them heavily would be very difficult.  This is a good read on the subject…

 

https://www.nytimes.com/2017/09/27/upshot/the-republican-tax-plans-magic-asterisk.html

Click to expand...

Thats old and speculative now (more than ours this instant at least). It appears theyve basically said any professional services dont count.