Tax Update
Dec. 16th, 2017 04:27 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
livingdebSince my last post on how the new tax plan would affect me, I have double-checked my math and found a serious error. Plus I looked up the sales tax deduction and looked up the new final version of the plan.
New conclusion: If I bunch my deductions, I would pay only 7% more taxes on the new plan (not the 50-70% I had calculated before). So that's good, but not what I'd call "tax relief for middle class Americans."
When I itemize, I would pay $1,318 in federal income taxes under the new plan versus $794 under the current plan. That's because all the deductions would be the same for me, but the personal exemption has been removed.
When I don't itemize, I would pay $1,759 under the new plan versus $2,080 under the current rules. That's because the proposed standard deduction is higher than the current standard deduction + personal exemption and because my marginal tax rate would go from 15% to 12% (and they are keeping the bottom tax rate at 10% after all instead of making it 12%).
I also calculated my savings from bunching. (I don't like bunching and only recently started it.) Currently I'd save an average of $643/year; seems worth it. Under the new plan I would save $221/year; still real money, but much less.
Another thing that effects me is that the disappearing personal exemption is set to reappear in 2025. And they have lowered the fine for not having health insurance to $0, which is expected to raise insurance rates for everyone who still gets it.
Most of my readers are in a higher tax bracket, so your mileage may vary.
I do like one of the tweaks in the new system--They've decided not to start taxing graduate student tuition waivers or student loan interest after all.
But I also hate one of the tweaks--there will be no corporate alternative minimum tax at all. Currently this AMT is 20%, but the new maximum is going down from 35% to 21%. My guess is that under the new plan all the companies that are good at finding loopholes would stop paying taxes altogether. I don't know exactly what kind of behavior these deductions encourage, so maybe it's not as bad as it sounds. Oh, and there's still a huge deficit, which Republicans are supposed to hate, but apparently they are going to use it as an excuse to cut Social Security, Medicare, and Medicaid.
There's still time to call your Representative and Senators and ask them to vote no on this. Also, Congress has the power to reinstate Title II protections to net neutrality. CHIP still isn't funded. There's still no DREAM Act. Well, I won't list all the issues.
Sometimes getting inundated by calls and letters does change things. You just never know which things. If you call, make sure you mention that you are a constituent because apparently it's common practice to ignore anyone outside their jurisdiction. As if their decisions affect no one else.
New conclusion: If I bunch my deductions, I would pay only 7% more taxes on the new plan (not the 50-70% I had calculated before). So that's good, but not what I'd call "tax relief for middle class Americans."
When I itemize, I would pay $1,318 in federal income taxes under the new plan versus $794 under the current plan. That's because all the deductions would be the same for me, but the personal exemption has been removed.
When I don't itemize, I would pay $1,759 under the new plan versus $2,080 under the current rules. That's because the proposed standard deduction is higher than the current standard deduction + personal exemption and because my marginal tax rate would go from 15% to 12% (and they are keeping the bottom tax rate at 10% after all instead of making it 12%).
I also calculated my savings from bunching. (I don't like bunching and only recently started it.) Currently I'd save an average of $643/year; seems worth it. Under the new plan I would save $221/year; still real money, but much less.
Another thing that effects me is that the disappearing personal exemption is set to reappear in 2025. And they have lowered the fine for not having health insurance to $0, which is expected to raise insurance rates for everyone who still gets it.
Most of my readers are in a higher tax bracket, so your mileage may vary.
I do like one of the tweaks in the new system--They've decided not to start taxing graduate student tuition waivers or student loan interest after all.
But I also hate one of the tweaks--there will be no corporate alternative minimum tax at all. Currently this AMT is 20%, but the new maximum is going down from 35% to 21%. My guess is that under the new plan all the companies that are good at finding loopholes would stop paying taxes altogether. I don't know exactly what kind of behavior these deductions encourage, so maybe it's not as bad as it sounds. Oh, and there's still a huge deficit, which Republicans are supposed to hate, but apparently they are going to use it as an excuse to cut Social Security, Medicare, and Medicaid.
There's still time to call your Representative and Senators and ask them to vote no on this. Also, Congress has the power to reinstate Title II protections to net neutrality. CHIP still isn't funded. There's still no DREAM Act. Well, I won't list all the issues.
Sometimes getting inundated by calls and letters does change things. You just never know which things. If you call, make sure you mention that you are a constituent because apparently it's common practice to ignore anyone outside their jurisdiction. As if their decisions affect no one else.
no subject
on 2017-12-17 06:56 pm (UTC)Sigh.
-Cat
no subject
on 2017-12-18 12:52 am (UTC)Ever since I read that Monopoly study, I've been appalled at humanity. (One player got more money every time they passed Go than the other person, plus many more blatant advantages. After playing a while, of course the advantaged person was winning, but *most* of them also felt that it was partly because of their superior skill--even though they knew the deck was stacked in their favor.) Just sickening. In the real world, the different rules can be much more hidden. I know I'm still learning ways that I am privileged (as you saw on your blog entry about blue filters on lights letting you sleep better).
(I do know that some of them are racist, sexist, entitled pieces of excrement, too. Or they know they're no better than anyone else but are willing to do whatever it takes to stay on top anyway. I prefer de-horrifying the bottom so that wherever you land it's okay.)
no subject
on 2017-12-18 08:12 am (UTC)I also read an article about president Obama's ancestry once that had a very interesting little tidbit embedded in it. Apparently on his (white) mother's side one of his ancestors was actually one of the first Africans to be enslaved in this country. Somebody named Bunch or Punch? Anyhow, this guy was black, but I believe he was married to a white woman... which (the interesting part) was not actually considered scandalous at the time (early 1600s). The article went on to say that people didn't really consider blacks to be inferior until AFTER they started enslaving them en masse. So it wasn't that they thought blacks were sub-human and therefore they could justify enslaving them... it was the other way around. They started enslaving them, and then decided that they were sub-human in order to justify their behavior.
I don't know how true that description of early race relations actually is, but it sort of fits with my general observations about privilege. People know on some level that their privilege is arbitrary, but apparently that knowledge doesn't sit well, so they convince themselves that they somehow "deserve" it. Sorta like the Monopoly study you mentioned.
Like you, it sickens me. Sorta makes me want to tattoo "There, but for the grace of God, go I" on their foreheads or something.
Sigh.
-Cat
no subject
on 2017-12-18 05:54 pm (UTC)I'd recently heard about racism coming after slavery, but I'd also thought that explorers found natives to be inferior because they were different.