General US Tax Bill

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mysticmac

First 1025
Oct 18, 2015
14,905
17,647
The actual bill can be found here:

https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf

Here are the "highlights":
BUSINESS

• Chops the corporate tax rate from 35% to 20% permanently, not temporarily as was earlier considered.
• Businesses would lose the ability to deduct certain executive compensation above $1 million, which they can now do for performance-based pay.
• Tax-exempt bonds could no longer be used to build professional sports stadiums.
• Sets a top 25% rate for pass-through businesses such as S corporations and partnerships. The plan includes complicated guardrails that limit people from turning what would otherwise be wage income taxed at up to 39.6% into business income taxed at a lower rate.
• New limits on corporate interest deductions, which would be capped at 30% of earnings before interest, taxes, depreciation and amortization, which is a measure of cash flow. Real-estate firms and small businesses would be exempt from that limit.
• Creates a new one-time tax on overseas profits set at 12% for cash holdings and 5% for illiquid holdings, a provision meant to force companies to repatriate overseas profits. Creates a new 10% tax on U.S. companies’ high-profit foreign subsidiaries, calculated on a global basis, but active overseas profits wouldn’t otherwise be taxed.

INDIVIDUALS

• Reduces seven individual income tax brackets to four at 12%, 25%, 35% and 39.6%.
• Top tax bracket set for married couples earning $1,000,000 per year and individuals earning %$500,000. Bottom tax bracket extends up to $90,000 for couples and $45,000 for individuals.
• The bill would preserve head-of-household filing status, often used by single parents. The standard deduction for that group is midway between individuals and married couples.
• Nearly doubles individual standard deduction to $24,400 for married couples and $12,200 for singles in 2018.
• Increases child tax credit from $1,000 in 2017 to $1,600 plus $300 for each taxpayer, spouse and non-child dependents. Places new limit on home mortgage-interest deduction at loans up to $500,000, down from $1,000,000, but existing loans would be grandfathered.
• The estate-tax exemption, set for $5.6 million per person and $11.2 million per married couple, would double immediately. The tax would be repealed starting in 2024.
• Keeps 401(k) existing plan rules largely intact.
• Repeals the alternative minimum tax.
• Repeals an itemized deduction for medical expenses.
• Repeals the tax credit for adoption.
• Repeals the deduction for student-loan interest.

Source: A Quick Look at Key Provisions
 

Hauler

Been fallin so long it's like gravitys gone
Feb 3, 2016
45,413
57,814
Read through it real fast.

What should I be pissed about?
 

Belobog

First 100
First 100
Jan 14, 2015
759
1,445
The House tax bill preserves the carried interest tax break, used by private-equity managers, venture capitalists, hedge fund managers and certain real estate investors, despite Trump's promise to do away with this loophole. Trump highlighted the carried-interest tax break during his populist presidential campaign, labeling some hedge fund managers as “paper pushers” who are “getting away with murder.”

Carried interest is the portion of a fund’s profit, usually a 20 percent share, that’s paid to investment managers. Currently, tax authorities treat that income as capital gains, making it eligible for a rate as low as 23.8 percent. The top tax rate for ordinary income is currently 39.6 percent.
 

mysticmac

First 1025
Oct 18, 2015
14,905
17,647
The House just passed the tax bill by two votes.

Edit: Oh, I guess they are still counting despite time running out. It was close though.
 

mysticmac

First 1025
Oct 18, 2015
14,905
17,647
When I ran some rough numbers on my taxable income, I'd be getting taxed less. Not by much and I'm not saying it'd be worth it, but it is less.
 

RaginCajun

The Reigning Undisputed Monsters Tournament Champ
Oct 25, 2015
36,970
93,840
Tax rates

Current rates

  • 10 percent - first $9,325 of taxable income for singles ($18,650 for married filing jointly).
  • 15 percent - $9,235 to $37,950 ($18,650 to $75,900).
  • 25 percent - $$37,950 to $91,900 ($75,900 to $153,100).
  • 28 percent - $91,900 to $191,650 ($153,100 to $233,350).
  • 33 percent - $191,650 to $416,700 ($233,350 to $416,700).
  • 35 percent - $416,700 to $418,400 ($416,700 to $470,700).
  • 39.6 percent - Over $418,400 ($470,700).
House proposal

  • 12 percent - first $45,000 ($90,000 for married filing jointly).
  • 25 percent - $45,000 to $200,000 ($90,000 to $260,000).
  • 35 percent - $200,000 to $500,000 ($260,000 to $1 million).
  • 39.6 percent - Over $500,000 ($1 million).
New Senate proposal

  • 10 percent - first $9,525 of taxable income for singles ($19,050 for married filing jointly).
  • 12 percent - $9,525 to $38,700 ($19,050 to $77,400).
  • 22 percent - $38,700 to $70,000 ($77,400 to $140,100).
  • 24 percent - $70,000 to $160,000 ($140,000 to $320,000).
  • 32 percent - $160,000 to $200,000 ($320,000 to $400,000).
  • 35 percent - $200,000 to $500,000 ($400,000 to $1,000,000).
  • 38.5 percent - Over $500,000 ($1 million).
Personal exemptions

Under current law, individuals reduce their income by $4,050 - or $16,200 for a family of four - under what are known as personal exemptions.

  • The personal exemptions would be eliminated under both the House and Senate plans, a portion of which would be offset at least temporarily by new or expanded credits.
Child and family credits

Under current law, a tax credit of $1,000 (this is dollars, not a deduction from income) is provided for each child under age 17. This begins to phase out for joint returns with an adjusted gross income of above $110,000.

  • Under the House proposal, this amount would increase to $1,600, plus there would be a new credit of $300 for most others who used to be claimed as personal exemptions (including the taxpayer). The phase out for joint returns would be at $230,000.
  • Under the Senate proposal, the child credit would be $2,000 per qualifying child under the age of 18. The phase out would begin for couples at $500,000 of adjusted gross income.
Standard deduction

This is the amount taken off income for people who do not itemize their deductions.

  • Current law: $6,350 for individuals; $12,700 for married couples filing jointly.
  • House proposal: $12,200 for individuals; $24,400 for married couples filing jointly.
  • Senate proposal: $12,000 for individuals; $24,000 for married couples filing jointly.
 

kneeblock

Drapetomaniac
Apr 18, 2015
12,435
23,026
College tuition now set to be taxable income, bumping grad students in particular into a weird imaginary tax bracket. Also repeals student loan interest deduction.

All while reducing capital gains rates.

So it'll be harder to afford mobility, but easier to keep wealth if you get there.
 

kneeblock

Drapetomaniac
Apr 18, 2015
12,435
23,026
Can you elaborate?
Pretty self explanatory. Increased tax liabilities on schooling coupled with increasing cost of education means that it's harder to afford the acquisition of the necessary specialized skills and training required for economic mobility. Add to this GOP plans to reduce student aid (in Pell grants and lending) and the primary driver of mobility (education) becomes harder to access.
 

Yossarian

TMMAC Addict
Oct 25, 2015
13,489
19,127
Pretty self explanatory. Increased tax liabilities on schooling coupled with increasing cost of education means that it's harder to afford the acquisition of the necessary specialized skills and training required for economic mobility. Add to this GOP plans to reduce student aid (in Pell grants and lending) and the primary driver of mobility (education) becomes harder to access.
This is very worrisome. People used to go to college paying with their summer jobs, etc. Now you are buying a house made out of air.
 

BeardOfKnowledge

The Most Consistent Motherfucker You Know
Jul 22, 2015
60,547
56,268
Pretty self explanatory. Increased tax liabilities on schooling coupled with increasing cost of education means that it's harder to afford the acquisition of the necessary specialized skills and training required for economic mobility. Add to this GOP plans to reduce student aid (in Pell grants and lending) and the primary driver of mobility (education) becomes harder to access.
A big part of the infinitely rising school costs stemmed from the governments involvement in loans. There was a time before that where people could work their way through school. It was government loans that allowed schools to raise their rates. It's entirely possible that if admission numbers go down so will tuition costs. It's also a fallacy that education is the only path to a better life. The unemployment rates of university graduates in their respective fields demonstrates this.
 

Splinty

Shake 'em off
Admin
Dec 31, 2014
44,116
91,095
• Chops the corporate tax rate from 35% to 20% permanently, not temporarily as was earlier considered.
• Businesses would lose the ability to deduct certain executive compensation above $1 million, which they can now do for performance-based pay.
• Tax-exempt bonds could no longer be used to build professional sports stadiums.
• Sets a top 25% rate for pass-through businesses such as S corporations and partnerships. The plan includes complicated guardrails that limit people from turning what would otherwise be wage income taxed at up to 39.6% into business income taxed at a lower rate.
• New limits on corporate interest deductions, which would be capped at 30% of earnings before interest, taxes, depreciation and amortization, which is a measure of cash flow. Real-estate firms and small businesses would be exempt from that limit.
• Creates a new one-time tax on overseas profits set at 12% for cash holdings and 5% for illiquid holdings, a provision meant to force companies to repatriate overseas profits. Creates a new 10% tax on U.S. companies’ high-profit foreign subsidiaries, calculated on a global basis, but active overseas profits wouldn’t otherwise be taxed

I like most of this.

• Reduces seven individual income tax brackets to four at 12%, 25%, 35% and 39.6%.
• Top tax bracket set for married couples earning $1,000,000 per year and individuals earning %$500,000. Bottom tax bracket extends up to $90,000 for couples and $45,000 for individuals.
• The bill would preserve head-of-household filing status, often used by single parents. The standard deduction for that group is midway between individuals and married couples.
• Nearly doubles individual standard deduction to $24,400 for married couples and $12,200 for singles in 2018.
• Increases child tax credit from $1,000 in 2017 to $1,600 plus $300 for each taxpayer, spouse and non-child dependents. Places new limit on home mortgage-interest deduction at loans up to $500,000, down from $1,000,000, but existing loans would be grandfathered.

Is good depending on the price points of those brackets.

The estate-tax exemption, set for $5.6 million per person and $11.2 million per married couple, would double immediately. The tax would be repealed starting in 2024.

Mixed opinion.
Money was already taxed...but we are taking again.
On the other hand, inordinate wealth is isolated via capital gains in these estates at a tax rate those of us that work (yes even me and my yacht) don't get to primarily access. Im still taxed at 39.6% for working. Rich are taxed at 15% for holding money in accounts.

• Keeps 401(k) existing plan rules largely intact.
• Repeals the alternative minimum tax.
Ok

• Repeals an itemized deduction for medical

HSAs are just a backdoor retirement account for people like me

Repeals the tax credit for adoption.

Seems strange. Why?

Repeals the deduction for student-loan
Bad.
 

Ted Williams' head

It's freezing in here!
Sep 23, 2015
11,283
19,102
College tuition now set to be taxable income, bumping grad students in particular into a weird imaginary tax bracket. Also repeals student loan interest deduction.

All while reducing capital gains rates.

So it'll be harder to afford mobility, but easier to keep wealth if you get there.
 

Splinty

Shake 'em off
Admin
Dec 31, 2014
44,116
91,095
House proposal

  • 12 percent - first $45,000 ($90,000 for married filing jointly).
  • 25 percent - $45,000 to $200,000 ($90,000 to $260,000).
  • 35 percent - $200,000 to $500,000 ($260,000 to $1 million).
  • 39.6 percent - Over $500,000 ($1 million).

This combined with...

House proposal: $12,200 for individuals; $24,400 for married couples filing jointly.
Is fine in my opinion.

I will see a slight increase in my taxes salary side and my business will get a slight tax break.

I am being incentivized to limit my property homestead investing and instead focus on retirement to take advantage of capital gains.

One reason I don't like this is that in Texas, my homestead is exempt from malpractice suits and I would like to protect my assets inside of that. But the mortgage interest decrease will have me do some math.

On the other hand, a great majority of people don't ever get close to those numbers and it will primarily only hit the wealthy that can afford the properties anyways. It might decrease some speculators and real estate investors too.
 

Splinty

Shake 'em off
Admin
Dec 31, 2014
44,116
91,095
A big part of the infinitely rising school costs stemmed from the governments involvement in loans. There was a time before that where people could work their way through school. It was government loans that allowed schools to raise their rates. It's entirely

Government should subsidize the schools (supply) and not the students (demand).

Students joined a bubble of chasing nicer dorms and nicer gyms with "future money".

Some skin in the game at the beginning, instead of zero now...whether tuition is 5k or 15k...would have helped align spending to education instead of pseudo resorts of fancy dining and living.
 

Splinty

Shake 'em off
Admin
Dec 31, 2014
44,116
91,095
College tuition now set to be taxable income, bumping grad students in particular into a weird imaginary tax bracket. Also repeals student loan interest deduction.

You mean college tuition loans are going to be looked as taxable benefit?

That makes no sense if so.

I can't think of a loan situation where I'm taxed on the benefit of getting the funding but can't deduct the loss during payback.
 

SuperPig

Enjoy yourselves
Aug 7, 2015
30,979
51,737
You mean college tuition loans are going to be looked as taxable benefit?

That makes no sense if so.

I can't think of a loan situation where I'm taxed on the benefit of getting the funding but can't deduct the loss during payback.
Yeah I'm with you there.

Are the loans now income or are grants and scholarships income as in a sense they actually are income?
 

Splinty

Shake 'em off
Admin
Dec 31, 2014
44,116
91,095
grants and scholarships income as in a sense they actually are income?
That wouldn't be too crazy actually. I'm not sure if that's the current process?

12,000 of it is tax free per the tax plans.

I paid college out of my work wage. It was taxed then I paid with post tax dollars.

If my college is free via scholarship or grant, should it be taxed too? I'm getting a financial benefit.

I'd say yes in the current system.

But greater, I'd let all college tuition (not the stupid loan interest) be tax deductible. Though, the GOP plan seems to be focused on getting some buyers' skin in the game for immediate costs of college education. I'm not sure it'll work without an associated subsidizing of campuses directly, which isn't on the table to my knowledge.