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Old 10-01-2017, 07:58 AM
 
Location: Washington State
18,467 posts, read 9,561,235 times
Reputation: 15760

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Quote:
Originally Posted by MadManofBethesda View Post
You keep moving the goalposts. Or more accurately, you keep changing sports entirely.

This tangential discussion (which you started) isn't about how the proposed tax cuts affect individual retirees; it is about your statement that individuals in low-tax states are subsidizing those in high-tax states. That statement is patently false and there have been numerous studies over the years that prove it to be untrue. As I mentioned in my earlier reply to you, for every dollar paid in federal income taxes, residents in low-tax states get back more than $1 in federal benefits to their state. Conversely, for every $1 paid in federal income taxes by individuals in high-tax states, those states receive less than one dollar in federal benefits.

That's pretty black and white and should be clear to anyone with a modicum of intelligence.
The difference is that my statement about how deducting state taxes from income taxes is relevant to the discussion of the Trump tax effect and how it would affect retirees taxes and your and other's statements about low tax states versus high tax states, versus who gets federal dollars does not enter into the calculation of federal taxes due...again, sorry you and your cohorts are talking a different subject that has no bearing whatsoever on how to calculate retirees taxes before and after the Trump tax plan.

Anyway, I'm happy that in the future, people in high tax states like NY & NJ will paying the same FIT as me at the same income level and you will no longer be skating on federal taxes and your fair share will now be required to be paid.

 
Old 10-01-2017, 08:16 AM
 
Location: Central IL
15,209 posts, read 8,513,923 times
Reputation: 35606
Quote:
Originally Posted by nalabama View Post
Burkmere states "No, he/she is not correct. See above posts by Ariadne22."

Exactly what in my posts have I stated that is "not correct"? Adriadne22's example of increased taxes under the proposed changes only results in increased taxes because Adriadne22 used historical income bracket amounts in the calculation. However, none of us knows yet what will be proposed under Trump's tax plan for bracket amounts.
Since we are unlikely to get any details until just before voted on (if then!) we are left to come up with various scenarios that seem likeliest. Perhaps it would be easier to convince Trump and his administration to actually be aboveboard and upfront? Not likely if indeed the middle class will get so little out of it.
 
Old 10-01-2017, 09:07 AM
 
Location: WA
5,394 posts, read 21,388,001 times
Reputation: 5889
Quote:
Originally Posted by reneeh63 View Post
Since we are unlikely to get any details until just before voted on (if then!) we are left to come up with various scenarios that seem likeliest. Perhaps it would be easier to convince Trump and his administration to actually be aboveboard and upfront? Not likely if indeed the middle class will get so little out of it.
These days only a framework of the legislation (and an indication of what will or will not be signed) can come out of the executive branch. A diverse and divided congress will steer the bill presented (or not) as law so details will continually be negotiated to get approval.

I cannot be 'aboveboard and upfront' about what 535 DC politicians will decide, can you?
 
Old 10-01-2017, 09:17 AM
 
210 posts, read 150,713 times
Reputation: 628
Framework has become a fancy word signifying not-much. Years ago everyone got into building "frameworks"; not many of these saw execution but, when bound, they made pretty brochures to pass around to waste people's time. There's work and there's frames. Oh yea, forgot "overarching" which ties everything together like a big, big hug (hopefully a goodbye hug).


Forgive distraction. I've been dying to say something like this.
 
Old 10-01-2017, 10:15 AM
 
Location: Columbia SC
8,954 posts, read 7,729,944 times
Reputation: 12159
I collect SS, I draw monthly from two non-IRA retirement accounts, and I have to take MRD's for my IRA accounts though I take nothing else from them. I have no debt and my real estate taxes are small. I file as a single (widower). I have been using the Standard Deduction for some 8 years. It appears the new tax plan could help me or at least will not hurt me.

I shall see.
 
Old 10-01-2017, 10:45 AM
 
210 posts, read 150,713 times
Reputation: 628
What I see as a big problem when trying to guess the effect of tax reform on retirees is that it looks like many deductions were put into law to "help" retirees. So it matters whether home mortgage and charitable deductions are the only deductions kept that are heavily used by the middle class. Retirees, by in large, have paid off most to all of their mortgages and charitable contributions may only be significant to seniors who have discretionary income. So if the medical deduction is lost and a spouse is seriously ill (e.g. in a nursing home), the retiree might need to keep charity at home to cover the taxes on the extra IRA withdrawals required to pay medical bills.


So it depends individually on what ends up to be the individuals fate. That may be different from the this-year consequence of the tax reform on his/her taxes. If the reduction in middle class taxes is small, the loss of current tax advantages might come back to really hurt.
 
Old 10-01-2017, 12:25 PM
 
15,146 posts, read 4,003,357 times
Reputation: 10957
The plan will never pass.

But the basics are that the middle class and the upper middle class will pay more - sometimes much more. The really wealthy and corporations will pay less. The debt and deficit will balloon. Notice - all those people (and most are/were Trump voters) who claimed the #1 issue in the USA was paying down the debt...they have went completely silent! Not only that, they are in favor of INCREASING our debt....even if it doesn't put a single cent into their pocket.

There is no sane way to explain this except to suggest that maybe people want to go back to the feudal system and monarchies where everything goes to the very top.
 
Old 10-01-2017, 12:29 PM
 
Location: Living rent free in your head
31,009 posts, read 13,571,153 times
Reputation: 22096
Quote:
Originally Posted by ABQ2015 View Post
You may be confusing AGI with Taxable Income. AGI is the bottom of the first page of the Form 1040. The second page is where you deduct for the standard or itemized deductions and the personal exemption. Reducing AGI would be nice as it is the basis for ACA subsidies, when the higher Medicare Part B premiums kick in, etc. But the only way I can figure out to reduce AGI, without taxable investments and a Roth IRA for income, is to contribute to a Health Savings Account (HSA).

I may be paying $500-1000 more in taxes under the Trump Tax Plan. My current deductions for state tax and property tax and the personal exemption are a few thousand more than the new proposed standard deduction for single filers. But I don't know enough about the specifics of the plan to be sure. If the HSA contribution limit goes up, as was part of the initial plan, I could come out ahead but that contribution will end when I turn 65.
I know we will pay more, probably not more than a few thousand dollars but it just galls me to think that we will pay more so that the Mnuchin's and Trump's of the world can rake in several million dollars more on our backs.

I feel like it's Ronnie Raygun's great tax plan all over again, that's when the AGI to deduct medical expenses went from 3% to 7.5%, they took away the deduction on interest on car loans & credit cards, they raised FICA taxes and raised taxes every year - 11 tax increases if I remember correctly. What a joy that was when I was a single mom raising two kids by myself...deciding between buying your kids shoes or paying the utility bill is not something one should have to do in order to give the oligarchs more money.
 
Old 10-01-2017, 12:33 PM
 
Location: Living rent free in your head
31,009 posts, read 13,571,153 times
Reputation: 22096
Quote:
Originally Posted by AnnaLee2 View Post
What I see as a big problem when trying to guess the effect of tax reform on retirees is that it looks like many deductions were put into law to "help" retirees. So it matters whether home mortgage and charitable deductions are the only deductions kept that are heavily used by the middle class. Retirees, by in large, have paid off most to all of their mortgages and charitable contributions may only be significant to seniors who have discretionary income. So if the medical deduction is lost and a spouse is seriously ill (e.g. in a nursing home), the retiree might need to keep charity at home to cover the taxes on the extra IRA withdrawals required to pay medical bills.

So it depends individually on what ends up to be the individuals fate. That may be different from the this-year consequence of the tax reform on his/her taxes. If the reduction in middle class taxes is small, the loss of current tax advantages might come back to really hurt.
I'm 70, my husband is 73. A good part of our Social Security is subject to income tax, we each have a pension and those are taxed, we take annual mandatory withdrawals from our 401k's and those are taxed, our investment income is taxed. My guess is that we are not 'unique' among retired couples and most if not all seniors in our situation will be paying more under this tax plan.
 
Old 10-01-2017, 12:44 PM
 
3,096 posts, read 1,717,786 times
Reputation: 3484
Quote:
Originally Posted by 2sleepy View Post
I'm 70, my husband is 73. A good part of our Social Security is subject to income tax, we each have a pension and those are taxed, we take annual mandatory withdrawals from our 401k's and those are taxed, our investment income is taxed. My guess is that we are not 'unique' among retired couples and most if not all seniors in our situation will be paying more under this tax plan.
Exactly. I think this plan not only rewards businesses and the very rich but also the low income supporters who are also Trump supporters in the Red States.
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