I made a separate thread for Condo impact or High earners state income tax affects the tax
This means most BA low end primary owners screwed !
Here is the example. A family earns taxable income 125000/year (assume after IRA/401k)
The current standard deduction for a family is $12600.
They pay appx $8720 as state income tax.
They own a condo with $550000 loan at 4% interest rate. They pay $22000 as mortgage interest.
Current scenario (2017).:
Their itemized (simplified) comes to $22000+$8720 = $30720. However, standard deduction is $12600. They are allowed to deduct $30720 (as this is higher than standard deduction) from $125000.
Their taxable income is $94280.
After Trump tax implemented(2018):
The standard deduction is $25200. State tax is not considered in itemization(void). Their Mortgage interest is $22000.
Their taxable income is $125000 - 25200 = $99800.
A family rent a home, no mortgage, with same pay. They pay the same $99800 taxable income.
There is no point in paying mortgage interest for condo owners who pay less than $25200 mortgage interest.
High state income tax states like California and New York is getting affected.
High end earners, such a dual income in bay area makes appx 250k, they pay appx $20500 as state income tax which will not be allowed in itemized deduction as per Trump.
The Trump plan could, at the margin, make renting a home more attractive financially than buying one.
…nullify the current tax benefits of owning a home for the vast majority of tax filers,” and could cause home values to “plummet,” the National Association of Realtors said in a press release.
I propose to eliminate mortgage interest deduction in return for repeal of rent control.
Since renters do not get rent payment deduction, it’s ok for homeowners to lose mortgage interest deduction.
Also mortgage interest deduction encourages people to take on debt. Tax should be neutral on debt, maybe mortgage interest deduction was lobbied by mortgage bankers.
That’s what they want Current economy model is based on population and debt = money. Population growth + growth in debt = economy growth. Do you have an alternative model?
It would benefit over 90% of the country. Now everyone that stayed silent about taxing the 1% thinking it won’t affect them are coming to the realization the government will reach below the top 1% to increase tax revenue. Simple math shows taxing every dollar of top 1% income wouldn’t close the budget deficit or satisfy the government’s desire to spend. The top 10% aren’t a big enough voting block to do anything about it. Congrats on the realization that we have a target on our backs, and most Americans want the government to take more from us and redistribute it in the name of fairness.
In the name of looking good in his 100 days, something Twhitler didn’t believe in, he has thrown anything at the wall expecting something to stick. It’s all about ego, nothing else.
Buying confidence is at the lowest level, people are scared of this guy. We don’t see any action in congress if it wasn’t to nominate the supreme court guy, otherwise the constant signature of EOs and the usual photo opportunity is in the menu, every day.
He is killing the environment, selling our national monuments, allowing oil, mine exploration on them. China is developing a clean and renewable industry, solar is a big time over there, he is reviving coal. China is closing their coal power plants, this petulant guy is opening them. We are going backwards in history.
Last night I met more people than I have ever met in my meetings. Many real estate guys saying something is going on, but they are afraid to speak up. 401Ks are being mentioned as a way to explore if they can be cashed out or not. Most said “are there any other options than real estate?”
Same as in real estate, speculation is what drives the market sometimes, or most of the times. Why not throw the notion of eliminating the property tax as a deduction, and even if the new taxes work better with the first $24K taken out, people drive their feelings on speculation. Nobody wants to find out it was good or bad at the moment they do their taxes, that’s for sure.
Nothing better than a guy who wakes up twitting, throwing stupid things online, pissing off people and countries, none the less, the new tax cuts helping more the rich than the media class.
Trickle effect economics has never worked! Time to bury it.
You’re likely correct that less than 10% are worse off but billionaires are not part of that 10%. Billionaires are likely to gain the most since many of them run their life around LL and corporations, dropping tax rate to 15% benefits them tremendously. To hide this from plain sight, sugared peanuts are given to the 90% less the billionaires.
True, but how much benefit can you give to 42% who pay zero income taxes? You can’t lower their taxes. The only way to make it better for them is create credits to give them free money.
But he was against Goldman Sachs and wall street during his campaign to gather some poor and down to earth and ignorant people voting for him. Then, he hires them. Duh!
I propose to tax everybody the same at 40%, no depreciation on anything, no 1031 exchange, no property taxes to be paid, no exceptions for anybody. You buy and sell anything, a home, a car, go ahead, we thank you, now pay your taxes please.
Except we are forgetting some things are voted in by we the people and uncle Sam is not involved, or can’t change a thing about it…somehow.
Flat rate of 20% for corporate tax, personal income tax and capital gain (both long and short term) tax.
Standard deduction of $25k per person.
No other deductions allowed. Hate all those hair splitting special interests. They should take personal responsibility and manage their own problems.
Flat tax rate, same tax rate for individuals and corporations, will greatly simplify the tax code. We should have a tax code which could be covered in 1 page instead of thousands of pages.
It’s funny that none of the congressmen and none of the past presidents fully understand the tax code. Probably not a single person in the world fully understand US tax code. It’s scary to have such a complex and corrupted tax code with so many purposeful loopholes and ambiguities.
Simplicity can kill many evil things. Evil thrives in complicated mess
Current economy model is based on population and debt = money. Population growth + growth in debt = economy growth. Do you have an alternative model?