I said it's simplistic. The big component of SALT (property tax) is included in my calculations, no? Property Tax Deduction row.
Why itemize if you save money by not doing so? I think people do the tax both ways and choose the lesser tax to pay. It really depends on the effective tax rate.
Bill Gates would pay 20% (or whatever the tax is) on all the money he spends, borrowed or not. That will be a shit pile of cash compared to someone scraping by.
...... If you have a mortgage interest deduction and property tax deduction larger than the standard, you itemize.
Facepalm. You were arguing with your chart for them to take the standard when the itemized was larger and would decrease their taxes more. Which shows your calculation to be silly.
I was not. I posted that someone making $250K has their tax go up. And asked if that level of income is middle class. The $150K example, including state income tax of 10%:
I was getting a little nervous but the wife and I are usually in between the top two red arrows somewhere so it can't be too bad. For us anyway.
BTW, I didn't fully explain the sales tax idea. Not only would there be a flat tax (income or sales, preferably sales), there would also be a negative income tax, or flat refund of $4K (or something like that) per person. $4K for an individual $8K for a married couple $12K for a married couple with one child etc. In 2017, the government spent $12,485 per capita. The refunds would leave it $8,485 per capita to spend still. Obviously a number of government programs that also write checks to people would be obsolete. $4K to someone scraping by is BIG money. $4K to bill gates is chump change. But it's fair - everyone gets the same.
Lol. Agi and taxable income arent the same thing. Which again shows your chart is stupid. Someone with taxable income at 108,000 would not have an effective tax rate at 25%. Effective tax rate is the average rate someone is taxed at. You're missing the 10% at 18,500, and 15% from 18,501 through 74,900 etc. If we are gonna go ahead and say AGI is taxable income, someone with 108,000 would pay like 18,500. 10,452 plus 25% excess of $75,900 income. $32,000 times 25% is $8,000. 18,500ish. 17% effective tax rate.
I'm using the same kind of assumptions your 2nd link does. Obviously people have all kinds of other deductions under current law. Schedule C, Schedule A, etc. I'm overstating the state income tax at 10%, FWIW.
No you're not. You're assumptions don't even make sense. You're adjusting the effective tax rate willy nilly. The effective rate on the right would be 17%ish based on the hypothetical brackets you listed. $75,000 times 12% is $9,000 tax. Remaining $51,000 times 25% tax is $12,750 tax. Total tax of $21,750. Schedule A is the itemized deductions form bro. And Schedule C would already be included in your AGI.
