Trump, Doctors and Taxes.

[Ignatius J]

Especially the rich Americans.

Are you using the weak Democratic talking point that the proposed tax break only benefits the rich?

That means little in the context of the growth of median income throughout the 80s and 90s and the complete stagnation of median income growth in the present. Again, it evokes the definition of insanity. We know on our current course that middle class income earners have lost the last decade. Not a debate.

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[facted]

Our economy grew an anemic and almost stagnant 0.7% YoY for the quarter so we are evoking the definition of insanity. We have a blueprint for economic growth through tax cuts with Reagan. It's like I am living in an alternate universe with the Left.

I do not like paying taxes, but believing that huge tax cuts encourages growth and pay for themselves via increased revenue has no basis in economics research. It's been so thoroughly disproven that even most Republicans don't believe in this anymore. If you want to see what happens when taxes get cut to almost zero, and you're just waiting for that growth that never comes, take a look at Kansas.

 

[CommonMan]

I find it very interesting how many comments this topic generates. Seems like there are a lot of wanna be tax accountants among anesthesiologists. Its not rocket science you know.
If Trumps proposal becomes law (zero chance because it is ridiculous) here is how you guys save the big bucks.
Wages are not subject to the lower rates, only pass thru income from the s corp. So to save the big bucks you must decrease your W-2 wage. The IRS and Trump's plan still require you pay yourselves adequate wage. Now to justify your low wage is adequate you simply let the IRS agents read this forum. You can reference all the posts on how nurses can do everything a anesthesiologist does and will replace anesthesiologists therefore your pay could be tied to what a CNA makes. Well maybe a CRNA but the revenue agents wouldn't know the difference.
The ones who really make the money under Trumps plan are the tax accountants, their workload just tripled. I know most anesthesiologists think they don't need an accountant, but trust me they do.

 

[Ignatius J]

I do not like paying taxes, but believing that huge tax cuts encourages growth and pay for themselves via increased revenue has no basis in economics research. It's been so thoroughly disproven that even most Republicans don't believe in this anymore. If you want to see what happens when taxes get cut to almost zero, and you're just waiting for that growth that never comes, take a look at Kansas.

This is not true. It is only not based on the research you choose to read. There are of course many economists who will argue the benefit of Reagan's tax cuts and the spurring of economic growth. I can only ask why your stance is so absolute in the face of what we know is an ongoing debate regarding Reagonomics?

And as mentioned and most importantly, with 0.7% GDP growth it begs the question of the definition of insanity. It takes a partisan hack to see the debt rising, wage growth flatlining, and the GDP barely crawling, and then pick apart a reasonably based plan that puts money in Americans' pockets for the purpose of economic growth.

And no one said that taxes have to be zero and that is not the basis of this tax plan.

 

[DrCommonSense]

Not that I love getting taxed or anything, but I'd like to point out that the two most highly taxed states, NY and California are quite popular places to live hahaha.

Meanwhile, if you want to see how far the Republican tax cuts can go, take a look at Kansas where taxes are basically non-existent. It isn't pretty.

Not for the middle class taxpayers or even some of the RICHEST people in the NY/NJ area:

Mass Exodus: 1 Million People Have Ditched New York Since 2010 | Zero Hedge

http://nypost.com/2016/04/10/this-man-could-destroy-new-jersey-by-moving-to-florida/

 

[facted]

And as mentioned and most importantly, with 0.7% GDP growth it begs the question of the definition of insanity. It takes a partisan hack to see the debt rising, wage growth flatlining, and the GDP barely crawling, and then pick apart a reasonably based plan that puts money in Americans' pockets for the purpose of economic growth.

As for a "reasonably based plan", it's just not. It's a one paged proposal that is based on a man's rambling thoughts without thorough discussion with academics, members of congress including both sides, and others. If you told me they took Camp's comprehensive tax plan that he spent YEARS studying and worked based off that, I'd be open. But this ridiculousness that Trump has proposed is total and utter crap. It will increase our debt TREMENDOUSLY and do little to solve the economy's problems.

I'm all for tax cuts and especially tax simplification, but you have to do it in a smart, organized, well studied and sustainable way.

 

[DrCommonSense]

Are those conservative states going to stop accepting the federal government handouts and the redistribution of wealth from New York and California? That would go a long way in reducing the deficit and allowing true tax reform to happen.

How much of that difference goes to funding of military in non liberal states compared to welfare?

 

[urge]

. If you want to see what happens when taxes get cut to almost zero, and you're just waiting for that growth that never comes, take a look at Kansas.

There are no federal taxes in Kansas?

Oh bummer... Your thesis makes no sense.

If you want a lesson in low taxes and growth visit Hong Kong. Your jaw will drop.

 

[facted]

There are no federal taxes in Kansas?

Oh bummer... Your thesis makes no sense.

We're talking about state taxes, but ok. Kansas axed their business taxes insisting that this was the best thing since sliced bread and everyone would just open up new businesses left and right and all this new added revenue would counter the lost tax revenue. Sound familiar?

We don't have to do it on a federal level to see the results. We already had a trial experiment on the state level and the results are in:
This State's Drastic Tax Cuts Inspired Trump. Now It Admits the Experiment Has Failed

 

[Ignatius J]

As for a "reasonably based plan", it's just not. It's a one paged proposal that is based on a man's rambling thoughts without thorough discussion with academics, members of congress including both sides, and others. If you told me they took Camp's comprehensive tax plan that he spent YEARS studying and worked based off that, I'd be open. But this ridiculousness that Trump has proposed is total and utter crap. It will increase our debt TREMENDOUSLY and do little to solve the economy's problems.

I'm all for tax cuts and especially tax simplification, but you have to do it in a smart, organized, well studied and sustainable way.

This was done in collaboration with folks like Mnuchin and Cohn who will forget more today about finance and corporate growth than we will know in a lifetime. You aim to oversimplify and isolate Trump as simplistic, and that is false.

Additionally, the proof is in the pudding. About 4 trillion dollars in market cap has been added to the market since Trump's election, in part because a lot of smart people with money who know the economy are betting on deregulation and cutting corporate taxes. That 4 trillion dollars benefits anyone with a market stake, from pensions to retirement accounts. All of us.

So in a sense, you are arguing with me that the sky is not blue.

Lastly, those "rambling thoughts" were intended to be a skeleton and was put together by intelligent people for the purpose of conveying a sense that Trump was going to make good on his promises. Or at least try to.

 

[Ignatius J]

We're talking about state taxes, but ok. Kansas axed their business taxes insisting that this was the best thing since sliced bread and everyone would just open up new businesses left and right and all this new added revenue would counter the lost tax revenue. Sound familiar?

We don't have to do it on a federal level to see the results. We already had a trial experiment on the state level and the results are in:
This State's Drastic Tax Cuts Inspired Trump. Now It Admits the Experiment Has Failed

A lot of statistic variables not controlled for there. For one, Kansas had little to no existing corporate or natural resource infrastructure and competition from deregulated, business-friendly neighbors to the south.

 

[urge]

We're talking about state taxes, but ok. Kansas axed their business taxes insisting that this was the best thing since sliced bread and everyone would just open up new businesses left and right and all this new added revenue would counter the lost tax revenue. Sound familiar?

We don't have to do it on a federal level to see the results. We already had a trial experiment on the state level and the results are in:
This State's Drastic Tax Cuts Inspired Trump. Now It Admits the Experiment Has Failed

State taxes are small potatoes in the grand scheme of things. Even in high tax states it is barely over 10%. The same way they cut they hike it up. Why would Apple move to Kansas when 5 years down the line they decide the tax rate will now the highest in the nation?

They would move to Hong Kong where it is 15%.

 

[facted]

State taxes are small potatoes in the grand scheme of things. Even in high tax states it is barely over 10%. The same way they cut they hike it up. Why would Apple move to Kansas when 5 years down the line they decide the tax rate will now the highest in the nation?

They would move to Hong Kong where it is 15%.

Except in neighboring states that chose not to cut taxes dramatically, economic growth was far greater than it was in Kansas. I have no problem with people wanting lower taxes. (I do!) But I'd also like to pay down the debt and at least have some semblance of a balanced budget. Those things are all pretty hard to square if you ask me and most economists. Tax cuts just don't pay for themselves. Thinking they do is believing in alchemy.

 

[facted]

A lot of statistic variables not controlled for there. For one, Kansas had little to no existing corporate or natural resource infrastructure and competition from deregulated, business-friendly neighbors to the south.

So you're saying Kansas didn't invest in the proper business infrastructure necessary to compete? And why was that?

Either you slash taxes and let corporations thrive unencumbered with minimal if any government financial input (ie: existing infrastructure), or you raise some revenue and the government provides some of that infrastructure you think is necessary for corporations to compete. Hard to have it both ways.

Lastly, as you mention, in the same time period, Kansas' neighbors undertook different tax approaches and smoked them in economic growth. Things have gotten so bad on a financial basis in Kansas that even Republicans are crying Uncle and looking to raise revenue. Heck, Brownback even almost lost to a democrat in the last election, which for Kansas is saying something...

 

[Ignatius J]

So you're saying Kansas didn't invest in the proper business infrastructure necessary to compete? And why was that?

Either you slash taxes and let corporations thrive unencumbered with minimal if any government financial input (ie: existing infrastructure), or you raise some revenue and the government provides some of that infrastructure you think is necessary for corporations to compete. Hard to have it both ways.

Lastly, as you mention, in the same time period, Kansas' neighbors undertook different tax approaches and smoked them in economic growth. Things have gotten so bad on a financial basis in Kansas that even Republicans are crying Uncle and looking to raise revenue. Heck, Brownback even almost lost to a democrat in the last election, which for Kansas is saying something...

No, I don't think Kansas had the proper infrastructure. Economies are not motorboats. They are big cruise liners. Simply put, you don't throw out a policy today and wake up to a new economy tomorrow. It requires existing infrastructure (Kansas did not have it), resources (Kansas did not have it), and opportunity against competitors (Kansas did not have it). Kansas didn't have the tools to pull it off and as another poster mentioned, the citizens still had the federal income tax burden so the degree of increased cash in the hands of business was quite small.

Your comparison is flawed. It's disingenuous to compare a uniform flyover state to the economy of the USA. C'mon, now.

 

[facted]

It requires existing infrastructure (Kansas did not have it), resources (Kansas did not have it), and opportunity against competitors (Kansas did not have it). Kansas didn't have the tools to pull it off and as another poster mentioned, the citizens still had the federal income tax burden so the degree of increased cash in the hands of business was quite small.

Well, I'm glad that you're making the argument for me that there actually needs to be some level of infrastructure provided by government. As for "opportunity", what exactly does that mean?

And as for the federal tax burden, I'm pretty sure the bordering states all had the same federal burden and crushed Kansas in growth.

Do you really think that if Congress put through 1 trillion dollars of tax cuts, our economic growth would pay for that? I'm not sure there is an economist out there who would agree with that, and I've read plenty of literature on the topic from both sides.

 

[Ignatius J]

Well, I'm glad that you're making the argument for me that there actually needs to be some level of infrastructure provided by government. As for "opportunity", what exactly does that mean?

And as for the federal tax burden, I'm pretty sure the bordering states all had the same federal burden and crushed Kansas in growth.

Do you really think that if Congress put through 1 trillion dollars of tax cuts, our economic growth would pay for that? I'm not sure there is an economist out there who would agree with that, and I've read plenty of literature on the topic from both sides.

I think you paint with a broad brush. What we do know is that our debt is exploding, wages are plateauing, and GDP growth is mediocre and that is being nice. Obama managed to grow the debt about 10 trillion dollars while actually providing almost no robust economic growth.

We also know that taxes hamper economic growth (whether the opposite is true of cutting taxes spurring growth is a debate).

Given what I have said, what is your idea to help the economy and debt?

To your last question, we have over 1 trillion in potential repatriated profits and a 4 trillion dollar market cap increase. I would say we could pay for that.

I'm also a bit flustered by all the new budget hawks who have been complicit with policies and domestic spending programs that brought the yuge defecit issues upon us. Can't spare a tax break but we can spend 60-70% of our budget on entitlement handouts through poorly managed government programs? It doesn't add up. What's the end game here?

 

[CommonMan]

Lets figure out a way to fund this country that doesn't take as much effort as it does to build a new interstate highway system each year. Lets make our tax system simple, it could be done easily but politicians are too greedy to let it happen. Where is the out rage. The public loves to make substantial donations to bizarre religious organizations and deduct it on their tax return. Trumps proposals are so bizarre it really doesn't matter if it is a tax reduction or not. They will never become law and he knows it. Having a pass thru entities income taxed at a lower rate than individuals makes no sense. Everyone is so busy looking at the trees they have lost sight of the forest.

This should be a great forum to discuss new ideas that would actually work. Lets look at the big picture. Use your high power creative minds and throw something out there. It might stick after the collapse.

 

[Ignatius J]

Lets figure out a way to fund this country that doesn't take as much effort as it does to build a new interstate highway system each year. Lets make our tax system simple, it could be done easily but politicians are too greedy to let it happen. Where is the out rage. The public loves to make substantial donations to bizarre religious organizations and deduct it on their tax return. Trumps proposals are so bizarre it really doesn't matter if it is a tax reduction or not. They will never become law and he knows it. Having a pass thru entities income taxed at a lower rate than individuals makes no sense. Everyone is so busy looking at the trees they have lost sight of the forest.

This should be a great forum to discuss new ideas that would actually work. Lets look at the big picture. Use your high power creative minds and throw something out there. It might stick after the collapse.

I think Trump will pass tax reform in some manner and agree with the Wall Street Journal article that he is just bypassing Dems and using it as a starting point to cater to and negotiate with Republicans. He will need unanimous support there. Unlike healthcare, I think it can be done.

 

[doctalaughs]

20% flat tax, all businesses, individuals and capital gains. Doesn't matter if you make minimum wage, are a billionaire or a trillion-dollar company. No deductions or write-offs. 20% with zero loopholes. No more gaming the tax code with fancy accounting tricks where a billionaire might pay an effective 5% rate whereas a 600k doctor pays 35% and a janitor pays 10%.

If it's that simple we could redirect the huge IRS infrastructure to other more useful things.


Sent from my iPhone using SDN mobile

 

[Ignatius J]

20% flat tax, all businesses, individuals and capital gains. Doesn't matter if you make minimum wage, are a billionaire or a trillion-dollar company. No deductions or write-offs. 20% with zero loopholes. No more gaming the tax code with fancy accounting tricks where a billionaire might pay an effective 5% rate whereas a 600k doctor pays 35% and a janitor pays 10%.

If it's that simple we could redirect the huge IRS infrastructure to other more useful things.


Sent from my iPhone using SDN mobile

That raises taxes on almost everyone but those above the 20% income tax bracket. The issue here is that about 40-50% of Americans pay zero net income tax, so naturally any break is going to favor the top 50-60% that pay it. How can you give someone a tax break that already doesn't pay an income tax? Give them more money I guess.

 

[Ignatius J]

Highly recommend reading this review of the literature from the Tax Foundation:

Here is a sample of the conclusion:

"This review of empirical studies also establishes some standards by which a tax system may be judged. If we apply these standards to our national tax system, the U.S. has probably the most inefficient tax mix in the developed world. We have the highest corporate tax rate in the industrialized world. If it came down 10 points—still higher than most of our trading partners—it would add 1 to 2 points to GDP growth and likely not lose tax revenue, because the tax base would expand from in-flows of foreign capital as well increased domestic investment, hiring, and work effort. The preponderance of evidence is such that virtually everyone agrees that the corporate rate should come down, although many continue to claim, opposite the evidence,[29] that such a move would lose revenue.

In sum, the U.S. tax system is a drag on the economy. Pro-growth tax reform that reduces the burden of corporate and personal income taxes would generate a more robust economic recovery and put the U.S. on a higher growth trajectory, with more investment, more employment, higher wages, and a higher standard of living."

What Is the Evidence on Taxes and Growth? - Tax Foundation

 

[Ignatius J]

Have to, have to, have to cut investment and corporate income taxes....

Dire Debt Outlook Calls for Growth, Not Austerity | RealClearPolicy

 

[Pooh & Annie]

Have to, have to, have to cut investment and corporate income taxes....

Dire Debt Outlook Calls for Growth, Not Austerity | RealClearPolicy

You'll see growth with that. But the growth will be far outpaced by the resultant increase in debt. And the wealth gap will continue to explode, just like it did with Reagan's cuts.

None of the authors solutions in the column you included provide breaks for the middle class. It's all investment and corporate cuts. Fine. More jobs, and a lot more money for folks who already have excess wealth, allowing them to re-invest. They will NOT INCREASE PURCHASING

We KNOW what stimulates the economy. Money in the hands of the people who do the VAST majority of buying. The MIDDLE class.

We've been down this road before.

 

[deleted126335]

You'll see growth with that. But the growth will be far outpaced by the resultant increase in debt. And the wealth gap will continue to explode, just like it did with Reagan's cuts.

None of the authors solutions in the column you included provide breaks for the middle class. It's all investment and corporate cuts. Fine. More jobs, and a lot more money for folks who already have excess wealth, allowing them to re-invest. They will NOT INCREASE PURCHASING

We KNOW what stimulates the economy. Money in the hands of the people who do the VAST majority of buying. The MIDDLE class.

We've been down this road before.

 

[Ignatius J]

@Pooh & Annie

So you're saying the Trump proposal is not a middle class tax cut? Virtually all economic models have investment and corporate taxes as the biggest hamper on economies (see paper I posted above for source).

I think if you are going to poo poo Reagan's tax cuts that this is a non-starter and we are on totally different wavelengths.

 

[Ignatius J]

Regans first years averaged 7.1% over the first 7 quarters. Wowzah. Reagan "unleashed the private sector". I highly recommend doing the same and getting off Obama's leash.

Reaganomics Vs. Obamanomics: Facts And Figures

 

[BLADEMDA]

But from the perspective of the Warren wing of the party, corporations pay far too little as it is, so making any reform revenue-neutral is a loser.

Before companies managed to start gaming the system, Warren noted, three of every 10 dollars of federal revenue came from corporate taxes. Today it’s only 1 in 10.

“At a time when corporate profits are near record highs, corporate tax revenue is near a record low,” she said. And so Democrats need to fight to push it higher.

“These giant companies haven’t just taken advantage of the tax breaks that have been offered to them, they haven’t just lobbied for better and better tax breaks, they’ve laid out the whole narrative about how America should think about corporate taxes,” she said. “The first priority to fix our broken tax code is to raise more revenue from big corporations.”


Elizabeth Warren

 

[BLADEMDA]

Trump predicts Elizabeth 'Pocahontas' Warren might run in 2020

 

[Ignatius J]

But from the perspective of the Warren wing of the party, corporations pay far too little as it is, so making any reform revenue-neutral is a loser.

Before companies managed to start gaming the system, Warren noted, three of every 10 dollars of federal revenue came from corporate taxes. Today it’s only 1 in 10.

“At a time when corporate profits are near record highs, corporate tax revenue is near a record low,” she said. And so Democrats need to fight to push it higher.

“These giant companies haven’t just taken advantage of the tax breaks that have been offered to them, they haven’t just lobbied for better and better tax breaks, they’ve laid out the whole narrative about how America should think about corporate taxes,” she said. “The first priority to fix our broken tax code is to raise more revenue from big corporations.”


Elizabeth Warren

Liz Warren is all you need to know there. Let's go visit how that high tax model worked out for Venezuela.

 

[Pooh & Annie]

@Pooh & Annie

So you're saying the Trump proposal is not a middle class tax cut? Virtually all economic models have investment and corporate taxes as the biggest hamper on economies (see paper I posted above for source).

I think if you are going to poo poo Reagan's tax cuts that this is a non-starter and we are on totally different wavelengths.

We're definitely on different wave lengths. No need to poo poo.

Trump has suggested doubling the minimum deduction, which would be helpful to the middle class. But the billions to the rich would be a huge setback that we've seen before.

There are nuances to every financial environment that should effect the decisions made to improve things. Cutting corporate taxes when they were in the 70% range in the 1960s was necessary. Cutting them when businesses are making record profits and the wealth gap is the biggest in history (kicked into gear be Reagan's cuts/voodoo economics), is ridiculous. Small business support, HELL yes. Across the board corporate breaks and investment breaks? The rich are doing just fine in this country already.

Put the cuts in the hands of the middle class. They buy. Not the rich.
Edit:the trillions to the rich

 

[Pooh & Annie]

Regans first years averaged 7.1% over the first 7 quarters. Wowzah. Reagan "unleashed the private sector". I highly recommend doing the same and getting off Obama's leash.

Reaganomics Vs. Obamanomics: Facts And Figures

It's weird then that he had to reverse a good deal of his cuts. And he still tripled the debt. And you know that many economists argue that the corrections in inflation by the reserve were what prompted purchasing and growth.

Bush already cut taxes for the rich significantly when Obama took over, and there was already a recession. Further tax cuts weren't a great option. And a HUGE part of American corporate growth is overseas, where historically it was IN America. Give a big cut to these folks and where do you think that money will flow, vs where did it flow in 1985?

Again, small business breaks, YES. Corporate welfare? Might as well just do a dollar to dollar trade off; tax cuts=long term debt.

 

[Ignatius J]

We're definitely on different wave lengths. No need to poo poo.

Trump has suggested doubling the minimum deduction, which would be helpful to the middle class. But the billions to the rich would be a huge setback that we've seen before.

There are nuances to every financial environment that should effect the decisions made to improve things. Cutting corporate taxes when they were in the 70% range in the 1960s was necessary. Cutting them when businesses are making record profits and the wealth gap is the biggest in history (kicked into gear be Reagan's cuts/voodoo economics), is ridiculous. Small business support, HELL yes. Across the board corporate breaks and investment breaks? The rich are doing just fine in this country already.

Put the cuts in the hands of the middle class. They buy. Not the rich.
Edit:the trillions to the rich

Difference between me and you is that you are seeing this through a class warfare lens like most Democrats and I see this is through an economic growth lens like most Republicans. It's pretty much unanimous among economists that the corporate tax hinders economic growth.

Simply doubling the standard deduction will not boost GDP to 3%

It's weird then that he had to reverse a good deal of his cuts. And he still tripled the debt. And you know that many economists argue that the corrections in inflation by the reserve were what prompted purchasing and growth.

Bush already cut taxes for the rich significantly when Obama took over, and there was already a recession. Further tax cuts weren't a great option. And a HUGE part of American corporate growth is overseas, where historically it was IN America. Give a big cut to these folks and where do you think that money will flow, vs where did it flow in 1985?

Again, small business breaks, YES. Corporate welfare? Might as well just do a dollar to dollar trade off; tax cuts=long term debt.

There is a huge difference between Bush's tax cuts and Trump's proposed plan. So this is simply a non-sequitur. Also, I will add that no taxes should be permanent. They are used as primarily as economic tools in a given situation as it calls for it.

I still haven't gotten an answer- what are you proposing we do to get to 3% growth? We can't cut spending. We can't cut taxes on anyone but the middle class. We can't raise taxes as it is unanimous that taxes hinder economic growth.

What is your plan?

 

[anes121508]

Speaking of taxes....

Trumps tax proposal got me to reading and actually learning about our tax system since I'm about to enter the real world soon.

A few questions to you more senior folks out there with much more experience in the real world than me:

1. When would they vote on this and If anything got passed, when would be looking at implementation of these changes?

2. If they raised the standard deduction to 50K (I think I read this in the plan) and got rid of the alternative minimum tax and you are a W2 employee (like many of us young people will be), is home ownership of any value at all in terms of itemizing?
- For example, a 500-600K house on a 30 year mortgage at 3.75-4% is roughly 15-25K in mortgage interest, which is above the current standard deduction of around 12K for married joint couples. However, if the standard deduction goes to 50K, wouldn't it be hard to reach that amount with additional deductions for the basic W2 employee? (other large deduction is property taxes 2.5% on a 600K home around 13K a year and maybe add in some other stuff and you are maybe at 50K right?)

What do you guys think? I think it's interesting to think about tax planning under the proposed trump system for a basic W2 employee between 300-450K like many people are.

I like reading WCI and his advice on tax planning and strategies...In the theoretical trump tax plan, what would be the best way to come out ahead (apart from not joining an AMC)?

 

[facted]

Speaking of taxes....

Trumps tax proposal got me to reading and actually learning about our tax system since I'm about to enter the real world soon.

A few questions to you more senior folks out there with much more experience in the real world than me:

1. When would they vote on this and If anything got passed, when would be looking at implementation of these changes?

2. If they raised the standard deduction to 50K (I think I read this in the plan) and got rid of the alternative minimum tax and you are a W2 employee (like many of us young people will be), is home ownership of any value at all in terms of itemizing?
- For example, a 500-600K house on a 30 year mortgage at 3.75-4% is roughly 15-25K in mortgage interest, which is above the current standard deduction of around 12K for married joint couples. However, if the standard deduction goes to 50K, wouldn't it be hard to reach that amount with additional deductions for the basic W2 employee? (other large deduction is property taxes 2.5% on a 600K home around 13K a year and maybe add in some other stuff and you are maybe at 50K right?)

What do you guys think? I think it's interesting to think about tax planning under the proposed trump system for a basic W2 employee between 300-450K like many people are.

I like reading WCI and his advice on tax planning and strategies...In the theoretical trump tax plan, what would be the best way to come out ahead (apart from not joining an AMC)?

If you enjoy working this out for the fun of it, go for it. But in reality, like every other piece of legislation he's tried to pass, his tax reform stands literally no chance of passing whatsoever. Don't waste your brain cells until more progress is made and definitely don't make any life choices based on theoretical tax reform.

 

[anes121508]

If you enjoy working this out for the fun of it, go for it. But in reality, like every other piece of legislation he's tried to pass, his tax reform stands literally no chance of passing whatsoever. Don't waste your brain cells until more progress is made and definitely don't make any life choices based on theoretical tax reform.

Yeah but isn't the majority of this thread about a hypothetical situation (trumps plan)? So we are wasting time talking about it in the first place. And if we are arguing about which plan would be best, isn't it prudent to run the numbers and find out what effect the plan would have on your tax situation or other people's tax situation? some people said trump had literally no chance of ever winning the presidency and look where we are now? I see your point and agree that it's really dumb to make any life decisions based on a far fetched proposal, but since we are here talking about this nonsense why not take a real look?

 

[anes121508]

If you enjoy working this out for the fun of it, go for it. But in reality, like every other piece of legislation he's tried to pass, his tax reform stands literally no chance of passing whatsoever. Don't waste your brain cells until more progress is made and definitely don't make any life choices based on theoretical tax reform.

Running the numbers, like you said, would be purely for fun, but not a total waste since I'll likely learn somethjng by attempting to make a comparison

 

[sazerac]

Speaking of taxes....

Trumps tax proposal got me to reading and actually learning about our tax system since I'm about to enter the real world soon.

A few questions to you more senior folks out there with much more experience in the real world than me:

1. When would they vote on this and If anything got passed, when would be looking at implementation of these changes?

2. If they raised the standard deduction to 50K (I think I read this in the plan) and got rid of the alternative minimum tax and you are a W2 employee (like many of us young people will be), is home ownership of any value at all in terms of itemizing?
- For example, a 500-600K house on a 30 year mortgage at 3.75-4% is roughly 15-25K in mortgage interest, which is above the current standard deduction of around 12K for married joint couples. However, if the standard deduction goes to 50K, wouldn't it be hard to reach that amount with additional deductions for the basic W2 employee? (other large deduction is property taxes 2.5% on a 600K home around 13K a year and maybe add in some other stuff and you are maybe at 50K right?)

What do you guys think? I think it's interesting to think about tax planning under the proposed trump system for a basic W2 employee between 300-450K like many people are.

I like reading WCI and his advice on tax planning and strategies...In the theoretical trump tax plan, what would be the best way to come out ahead (apart from not joining an AMC)?

You are very perceptive and your thought experiment is correct. The follow on question is what would happen to house prices? The lack of a mortgage interest deduction would likely cause the middle segment of the housing market to drop by 10-20 percent.

Whether this is a good thing or a bad thing depends on whether you are going to be buying or selling a house.

A thoughtful discussion of the issue can be found here:
GOP’s Higher Tax Deductions May Be Bad For Homeowners - Law360

 

[anes121508]

You are very perceptive and your thought experiment is correct. The follow on question is what would happen to house prices? The lack of a mortgage interest deduction would likely cause the middle segment of the housing market to drop by 10-20 percent.

Whether this is a good thing or a bad thing depends on whether you are going to be buying or selling a house.

A thoughtful discussion of the issue can be found here:
GOP’s Higher Tax Deductions May Be Bad For Homeowners - Law360

This is exactly, what I was getting at when I asked the question. I'm just far from an expert, but it seemed like people wouldn't be as incentivized to buy homes (at least ones under a million or so).

 

[Ignatius J]

Stephen Moore: All You Need Is Growth

 

[GassmanMD]

Details of GOP tax reform framework revealed

Thoughts? I'm still confused on how physicians would benefit from the corporate tax break.

 

[deleted171991]

Details of GOP tax reform framework revealed

Thoughts? I'm still confused on how physicians would benefit from the corporate tax break.

They won't. Most medical practices are S-corporations, so they weren't paying corporate taxes in the first place.

 

[VA Hopeful Dr]

They won't. Most medical practices are S-corporations, so they weren't paying corporate taxes in the first place.

Removing the income limit for child tax credits would be nice, as would increasing the standard deduction. That's not physician specific, but it would help most of us I suspect.

Depending on where the tax brackets are set, a good many doctors (not us FM types but maybe some of you anesthesia people) would benefit from a lowering of the highest bracket (from 39.5 to 35, the 39.5 currently set at 440k).

And I'm no accountant, but I've often been told that MDs can hit with the AMT.

 

[PainDrain]

Removing the income limit for child tax credits would be nice, as would increasing the standard deduction. That's not physician specific, but it would help most of us I suspect.

Depending on where the tax brackets are set, a good many doctors (not us FM types but maybe some of you anesthesia people) would benefit from a lowering of the highest bracket (from 39.5 to 35, the 39.5 currently set at 440k).

And I'm no accountant, but I've often been told that MDs can hit with the AMT.

My tax bracket may actually increase. I would likely go from my current 33% to 35% under this plan. They are also planning on getting rid of deductions for state/local taxes.

 

[VA Hopeful Dr]

My tax bracket may actually increase. I would likely go from my current 33% to 35% under this plan. They are also planning on getting rid of deductions for state/local taxes.

I thought they hadn't released what the income cut-offs were for the new brackets.

Yeah I'm not pleased about the deductions for state/local taxes either, but worst case I should be about the same if they increase the standard deduction AND allow me to take advantage of the child tax credit. And I'm in an irritatingly high income tax state.

 

[facted]

For those of us in high local tax areas, our taxes will go up significantly. On the bright side, no chance on Earth any of this gets implemented. There is huge Republican opposition from reps from high tax states ( CA, NY, NJ to name a few).

 

[deleted171991]

What you need to know about the GOP tax plan

 

[Man o War]

How much this will affect people will depend entirely on what income levels they cut off at each bracket.

 

[GA8314]

I get about $100k/year through S corp distributions. If I could pay 15% instead of almost 40% on that, I would take back my Hillary vote and thank all the backwoods ******s that voted for that blowhard Cheeto.

But would you really

 

[BLADEMDA]

Give new benefits to firms in which the profits double as the owners’ personal income. They would pay at a 25 percent rate, down from 39.6 percent. This creates a possible loophole for rich investors, lawyers, doctors and others; administration officials say they will design measures to prevent any abuses.

Trump plan promises huge tax cuts, but big questions remain