Any predictions of the effects of the proposed tax plan? (incentive, disclosure)

[BoBromhal]

Originally Posted by hellob

It's interesting that the lawmakers keep using a family of four making 59k as their example of how much it helps people. That's not a great salary.

if the median national income is 59K and the median family size 4, that would make sense.

[MrLinderman]

For reference I just did some back of the envelope math for a MFJ with no kids (did this before noticing OP had 2 kids) couple grossing 200k with 30k in deductions in the old plan vs. the same couple taking the double standard deduction in the new plan and the new plan by my rough numbers actually saved the couple 100 bucks a year.

Throwing the 2 kids would skew numbers a bit in favor of the old plan, but not by much. You'd still be within 1000 of what you'd normally pay.

Disclaimer that this was very back of the envelope, and we don't know what the Senate's bill will look like so YMMV.

[marksmu]

Originally Posted by riaelise

I go by perception. We are not "upper income". Granted, we make more than many people who have a similar educational level, but two people making what we make, while good, isn't upper middle class.

I agree with you....Upper middle class is more in the $500-$1M range. At the $200K range, you are doing great but still struggling with every day issues like mortgage, property taxes, and car notes.

Its an income level where the perception is you are "rich" b/c you could be if you lived like you made $50K, but you don't...so you are taxed to death, and you get no deductions.

Try taking that same income level and being self employed...you want to talk about taking a beating.

[jackmichigan]

Originally Posted by marksmu

I agree with you....Upper middle class is more in the $500-$1M range. At the $200K range, you are doing great but still struggling with every day issues like mortgage, property taxes, and car notes.

If someone is making $200K a year and "struggling", they're either poor money managers, living above their means...or living in a super high cost-of-living area. No empathy here.

[riaelise]

Originally Posted by marksmu

I agree with you....Upper middle class is more in the $500-$1M range. At the $200K range, you are doing great but still struggling with every day issues like mortgage, property taxes, and car notes.

Its an income level where the perception is you are "rich" b/c you could be if you lived like you made $50K, but you don't...so you are taxed to death, and you get no deductions.

Try taking that same income level and being self employed...you want to talk about taking a beating.

You got it. IMO, upper income are HENRY's, ones who make at least $400k. We consider ourselves middle class regardless of what Pew says. There are those who are gonna harp on the word "struggle", but I fully understood your point. We get few, if any, deductions except for what we put on Schedule A and the household deductions. That's it. no child credits, even though we put out quite a bit in child care. no student loan interest deductions. among other things. So hell yeah, the tax proposal sucks for us.

Originally Posted by jackmichigan

If someone is making $200K a year and "struggling", they're either poor money managers, living above their means...or living in a super high cost-of-living area. No empathy here.

Didn't ask for someone to bring out the world's smallest violin. My point is that our income tax tier doesn't need any elimination of the few deductions one can take kthx.

[Sandpointian]

Shifting the tenor of the discussion, the winners would be

* lower middle class to lower upper middle class
* Owners of homes in the $200k's and $300's up to $550k.
* those in states where property taxes are 1.5% or less.
* those who remain healthy
* those in states with low or modest income taxes
* those with large estates, i.e. the already super wealthy
* those with grown kids

[aslowdodge]

Originally Posted by emm74

If it goes through as is (highly unlikely) I've heard that people will be trying to buy and close before the end of the year because existing mortgages would be grandfathered into current mortgage interest deduction rules.

But I think it's very unlikely that a) there won't be changes between this and any final version and b) it will get passed quickly enough for anyone to close on a mortgage soon enough to the extent that it matters.

I heard the date to start it has already happened if it goes through.

[Pat Answers]

Originally Posted by emm74

59K is the median household income in the US as of 2016

Income, Poverty and Health Insurance Coverage in the U.S.: 2016

And this is a good link to figure out statistically if you are middle class, not just based on perceptions.

Are you in the US middle class? Try our income calculator | Pew Research Center

Anybody else try this? It said we were below the normal for our area. Maybe agree with this.

Then I clicked onto the next section and it said we were upper middle class. Hahahahaha NO!

I wonder, if someone can afford a million dollar house, do people think getting credit for mortgage interest on only 1/2 a million is a deal breaker? If someone is that wealthy and needs that mortgage interest credit, you suppose they're buying too much house for their income?

[arjay57]

Originally Posted by hellob

It's interesting that the lawmakers keep using a family of four making 59k as their example of how much it helps people. That's not a great salary.

It's not a ton of money but half the families in the country bring in $59K or less.

[Partial Observer]

Originally Posted by BoBromhal

The taxable income after those deductions, or your gross income?

What would be the change, as proposed, to your tax obligation?

And hate to say it, but folks like you and aren't "middle class" in Washington. We're rich.

Originally Posted by riaelise

You got it. IMO, upper income are HENRY's, ones who make at least $400k. We consider ourselves middle class regardless of what Pew says. There are those who are gonna harp on the word "struggle", but I fully understood your point. We get few, if any, deductions except for what we put on Schedule A and the household deductions. That's it. no child credits, even though we put out quite a bit in child care. no student loan interest deductions. among other things. So hell yeah, the tax proposal sucks for us.



Didn't ask for someone to bring out the world's smallest violin. My point is that our income tax tier doesn't need any elimination of the few deductions one can take kthx.

This bill would screw me, as well, but I’m O.K. with it if the consequence is that people in our income bracket have to rethink their decisions to live in McMansions. I make at the lower end of your income band, have two kids in day care, have $165-170K in student loan debt (combined with my wife’s), and live in the Boston area, which has an insane cost-of-living index. I still manage to make ends meet. How? By living in a $300K house, instead of the $700-800K houses that my faux middle-class neighbors buy.

If you live in Round Rock, your house must be over-the-top nice for the real estate implications of this tax bill to affect you significantly. And if you live in a fancy house in a good neighborhood, that’s part of the upper middle-class calculus, even if you don’t “feel rich.”