https://www.nytimes.com/2017/09/28/...shield-tax-breaks-threatened-by-gop-plan.html Lobbyists Rally to Save Tax Breaks Under Threat in Trump Plan Opposition from the real estate industry was swift and vocal, with trade groups strongly criticizing elements of the plan that they say will make home-buying less attractive and weaken the housing market. While the plan specifically calls for preserving the mortgage interest deduction, real estate agents are warning that a proposal to double the standard deduction will make taxpayers less likely to itemize their tax returns and claim the mortgage deduction. Trump's financial empire is real estate industry. FWIW. A proposal to limit the deductibility of corporate interest has prompted jockeying among powerful groups that rely on debt to help finance their operations, including real estate companies, private equity firms, financial companies and other businesses. ... The most politically fraught proposal is eliminating the state and local tax deduction, which allows taxpayers who itemize to write off their property, state and local taxes. The measure is particularly prized in blue states with high property taxes, but is also widely used in some Republican districts in Virginia, New Jersey and California. Eliminating the deduction, which the real estate industry also opposes, would save more than $1 trillion over a decade and make room for the tax cuts. But Republican members of Congress in affected states have already expressed concern about the provision, and a plan that repeals the deduction could be impossible to pass. Trump's financial empire is real estate industry.
Haven't read all of the updates from yesterday but...... not a fan of this tax reform. Poor people win. Rich people win. Middle class will get fucked.
Seems like those with really expensive houses in California won't get to write off their property tax (nor will Trump with his NYC properties, and others). In my case, the doubling of the personal deductions is far greater than my property tax, so I win. I'm not poor nor rich. FWIW
You have to look at what was said. The headline is misleading. Cohn said that you might find an exception to the rule that someone in the middle class will face a tax increase. Like you said, the poor will make out. They get to pay no taxes at all. Over 10M going from 10% bracket to 0%. Those left at the bottom paying the 12% are getting a cut from their current 15% or 25% bracket.
While that graphic makes it seem like people making $18,550 will be paying 12%... The actual plan is here: https://www.nytimes.com/interactive...ment-Read-President-Trump-s-Tax-Proposal.html
You can put as many graphs as you want. Read that 2nd link. That is exactly how many scenarios play out. Know the mechanics of the tax code and you'd agree. Middle class people that own homes will end up paying more.
From my OP, I specifically included this part because it affects people who own real estate - especially in states with high priced real estate.
From your 2nd link: This is why Trump's plan greatly increases Ann and Bob's taxable income — currently, they pay tax on less than $83,000 of their income, but under Trump's approach they'd be taxed on $96,000. That's why their tax bill would go up. What I don't think they figured in is the change in brackets. If you pay 25% of $83,000 but 15% of $96,000, which is more? Granted, the tax is additive (12% on first $18,500, etc.)
Simplistic, sure. Family of 2, $150K income, $400K home with 20% down payment, 1.25% property tax. 30 year mortgage at 4%.
Obviously this is all hypothetical until it gets finalized. Increased taxable income is bad. I will admit there are scenarios depending on where the brackets end up that could be beneficial to some middle class. But we don't know where that ends up. I find it incredibly hard to believe that lower taxes for the rich and poor ends up equaling less taxes for the middle class too. We shall see.
Seems to me that the biggest issue would not be the change in incremental rates or the question of itemized vs standard deductions, but the elimination of the personal exemptions--which isn't figured into Denny's 'simplistic' chart.
I'm not at all sold on the plan. My preference is one tax bracket, or a sales tax. So fewer brackets spread really far apart is better than lots of brackets close together.
