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All articles on the subject indicate the projected difference is likely to be 5% or less. But who knows?
That's about 22 BILLION dollars less given. Do you think 22 BILLION dollars does some good to people?
What is being suggested...by Churches, Charities, Independent Economists, myself and others is that it is very possible that LESS money will be given to charity due to the new tax law.
It de-incentivizes charitable giving for tens of millions of households.
There - I've kept it really simple.....22 Billion less projected. It may be 10 Billion. It may be 30 Billion. But it will likely be less.
It is also likely less vacation houses will be bought....compared to what might have been bought with the old laws in place. That also reduces economic activity.
One can approve of these changes or not...that's a valid position. "I don't think people should be able to deduct charity giving".....fine! "I don't think we should encourage the purchasing of houses" Fine.
But, c'mon, let's not define what is is.
And if the stated projection was 5% less I probably wouldn't have challenged it. I was responding to ""the number of filers who will deduct charitable contributions this year will fall from 36 million to 15 million, the Tax Policy Center predicts." Now they are speaking of number of donors not amount of donations but it sounds like a dramatic decrease.
I don't there should be deductions for charity AT ALL. That makes it another hidden form of welfare as the feds are subsidizing a quarter of the so-called "charity". If you want to give then give, but don't give and expect others to cover a quarter of your giving. Especially when so many flock to the big name charities like Red Cross that abscond with 90% of the donations and channel a small fraction to the actual stated purpose. I prefer the small grass-roots organizations, who cannot afford to run PR campaigns and may not even be 501C3, where nobody is getting paid CEO salaries and nearly a dollar of every dollar gets to the cause.
What the hell are you blabbering about? If you give to charity in 2017, there is no way you will pay more in taxes in 2018 due to a standard deduction increase. Got that Einstein? Do you need to that spelled out for you?
If in 2017, someone itemized their deductions totaling 8,000 due to charity donations and possible other things, in 2018 they'd take a standard deduction of 12,000 which is 4,000 more than what they got in 2017.
They're not penalized for giving to charity. Why would some religious person be "hurt"? What you're saying is if the religious person realizes their itemized deductions are not above 12,000, they have no incentive to give to charity, first of all that kind of defeats their purpose of being a religious person, but second of all this does not hurt them!
If anything they have more money now to give to charity. Why would some idiot who gives $1,000 to charity change his behavior due to this? Is he too stupid to realize that even if he itemizes this deduction, he would probably only get between 15-20% of it back?
The problem is that people are seeing the 12,000 standard deduction as an entitlement and not as an increased allowance for undocemented deductions. They think they should get the standard deduction AND the charitable deductions.
Be the number what they may be 75% of Americans are saying they paid more, or the same in taxes for 2018.
Could be due to the fact that the employers did not withhold enough from each paycheck, but the fact remains that people are not happy at this time.
I'm not hearing that at all. What I am hearing is that 75% of Americans don't understand that total taxes paid have nothing to do with whether you had to write a check or got a refund when filing your return. The second someone starts off with how much they paid in or got back, I know they don't understand at all what they actually paid in total taxes.
You are the one that is not making sense. I created an example below.
Old Law 2017
Mort Interest 7000
RE Tax 6000
State Income Tax 6000
Charity 7000
Total itemized deductions 26000 x 25% (est. marginal rate) = tax savings 6500
New Law 2018
Mort Interest 7000
RE Tax 6000
State Income Tax 6000
Charity 7000
Total itemized deductions 26000
SALT deduction adjustment -2000
Adj itemized deductions 24000
Std deduction taken 25000 x 25% = tax savings 6250, or additional tax paid 250
2019
Mort Interest 7000
RE Tax 6000
State Income Tax 6000
Charity 0
Total itemized deductions 14000
SALT deduction adjustment -2000
Adj itemized deductions 12000
Std deduction taken 25000 x 25% = tax savings 6250, additional tax paid vs 2017 250, plus charity lost 7000 donation, total "loss" to taxpayer/charity 7250
In future years, many donors will reduce their giving because in my 2019 example, they can donate zero to charity and still receive the exact same $25,000 standard deduction. Over the long term, charitable contributions are going to substantially decrease. I know the retort is going to be that people should be donating without needing a tax deduction, but we are living in the real world and we know it will happen.
To address your claim that donors will not be hurt by raising the standard deduction. You are totally wrong, if someone continues to donate at the same level but they get the same standard deduction as if they did not donate, they are being hurt. The amount of the hurt would be their marginal tax rate x donation amount. So a tither or other donor would see total out of pocket costs increase unless they reduced their donations to compensate.
First of all, you are only looking at the tax effects of deductions not the total tax paid because you didn't factor in change in tax RATE.
Secondly, if out of pocket expense was the driving criteria, the one in this example could have done better for themselves by simply donating zero in any year, including 2017.
In 2017 the standard deduction was $6350 and the personal exemption was $4050 for a total of $10,400 for a single filer. The $4050 could be added to the deductible items on an itemized return, so $8,000 would end up being $12050, subtract the old standard deduction from that and $5,700 would be deductible. Now only deductible expenses over $12,000 can be deducted. One of the groups most impacted by that are large families, especially those with kids over 16 because they lost that $4050 for every family member which for a family of 5 would be $20,250.
The child tax credit doubled, with the income phaseout almost doubled, so that family got an big boost. (Are you going to come back and say your hypothetical family had 17 year old quintuplets?) Couple that with the fact that the tax rates were lowered across every bracket, which many here are conveniently glossing over, and it's not nearly that simple.
The child tax credit doubled, with the income phaseout almost doubled, so that family got an big boost. (Are you going to come back and say your hypothetical family had 17 year old quintuplets?) Couple that with the fact that the tax rates were lowered across every bracket, which many here are conveniently glossing over, and it's not nearly that simple.
I was very clear, I said a family with children over 16. The child tax credit is only available for families with children under 17, an it is not unusual for a family to be supporting 3 or 4 kids over 16. Those families would not get a "big boost"
I was very clear, I said a family with children over 16. The child tax credit is only available for families with children under 17, an it is not unusual for a family to be supporting 3 or 4 kids over 16. Those families would not get a "big boost"
Because those aren't children. They are young adults capable of supporting themselves.
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Quote:
Originally Posted by ELOrocks17
Yeah--go ahead and vote for the dumpocrats--they are floating taxing you 70% at the very least..
That's just the marginal tax rate - not the total % of your income you owe in taxes.
The marginal rate applies only to income you earn above a certain threshold. And from what I understand, that would only apply to people earning more than $1 million per year. If the person earns $1.1 million, then the 70% rate applies ONLY to the $0.1 million ($100K), not to the entire $1.1 million.
Lovely. My tax guy called and said they were asked to update their software and re-run everyone's numbers, and I owe an additional $1800 on top of what I already paid, which was a very large amount.
Thanks Trump
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The bribe didn't work
