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I would love to see the math that accounts for anyone on welfare getting 30-40,000 a year.
Originally Posted by rjm1cc View Post
All I can say is that it is very difficult attracting low skilled people to entry level jobs that are getting 30 to 40 thousand dollars a year from the goverment.
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.
All I can say is that it is very difficult attracting low skilled people to entry level jobs that are getting 30 to 40 thousand dollars a year from the goverment.
What 'welfare' are you talking about that provides $30 to $40 thousand per year?
In giving this thought, I still think getting rid of the personal exemption is detrimental. As a prior poster pointed out:
Under current tax law (2017) the Personal Exemption is $4,050 and this increases about $50 annually... although in 2017 it didn't increase at all.
Under current tax law (2017) The Standard Deduction is $12,700 for married filing jointly and this amount usually increases annually... although in 2016 it didn't increase at all.
There is $1,250 added to the standard deduction for each taxpyaer that is 65 years or older or blind.
So, for a married couple under present tax law where both spouses are 65 or older: The total deduction would be
$4,050 Personal Exemption Spouse 1
$4,050 Personal Exemption Spouse 2
$12,700 Standard Deduction
$1,250 Addition to Standard Deduction age 65 Spouse 1 $1,250 Addition to Standard Deduction age 65 Spouse 2
23,300 total
President Trump's plan calls for discontinuing the Personal Exemptions and making the Standard Deduction $24,000. So this will only increase the non-taxed portion of income by $700 for two 65 year old married people. In the 12% tax bracket that is a total savings of $84 and in the 25% tax bracket that is a total savings of $175. No matter how I look at it, it doesn't seem that it did anything worthwhile for the taxpayer.
If the two 65 year old married people happen to have a child/parent that is their dependent... for whatever reason, such as because of disability, or raising a grandchild, etc. the situation reverses.
$4,050 Personal Exemption Spouse 1
$4,050 Personal Exemption Spouse 2
$4,050 Dependent 1
$12,700 Standard Deduction
$1,250 Addition to Standard Deduction age 65 Spouse 1 $1,250 Addition to Standard Deduction age 65 Spouse 2
27,350 total
In this scenario President Trump's $24,000 Standard Deduction is making $3,350 more income taxable. Which means that in the 12% tax bracket they now must pay an additional $402 and in the 25% tax bracket they are paying an additional $838.
In effect, by getting rid of the personal exemptions larger families will suffer tax consequences. I wonder if population control might be part of the thinking behind this.
I showed my work below in case I made a big mistake somewhere. Let me know if you see an error as now is the time to be accurate. These changes might be for most of the remainder of retiree's lives.
Someone with a $24,000 income currently has a $70 (10% of $700) tax on that income and no tax under the proposed changes. Someone with income that has them paying taxes currently at the top of the 10% bracket will owe $289 more taxes under the proposed changes. I feel safe using this first bracket top even though we know nothing of how high the bracket goes. Currently, after this point the 15% bracket starts. Part or all of it might be combined to 12% but nothing can be assumed at the moment.
The exemption + deduction may improve by $700 but, remember that the tax savings will be a percent of $700 depending on the bracket changes. For my examples this percent doesn't exceed the first bracket.
Quote:
Deductions and Exemptions
Current
Personal exemption $4,050/ea x 2 = 8,100
Additional exemption for elderly $1,250/ea x 2 = 2,500
Standard deduction $6,350/ea x 2 = 12,700
Total current law 2017 = $23,300
Proposed
Personal exemption $0/ea x 2 = 0
Additional exemption for elderly $0 x2 = 0
Standard deduction $12,000/ea x 2 = $24,000
Total proposed = $24,000
Difference = +700
Quote:
Example using income of $24,000
Current
Exemptions + deductions = $23,300
Tax = .10 * $700 = $70
Net = $24,000 - $70 = $23,930
Proposed
Net = $24,000
Difference = $70 gain under proposal
Quote:
Example using the 2017 top of the 10% tax bracket ($18,650), all income taxable
Current
Income = Top of 10% bracket = $23,300 + 18,650 = $41,950
Taxed income = $18,650
Tax = .10 * $18,650 = $1,865
Net = $41,950 - $1,865 = $40,085
Proposed
Same income $41,950
Taxed income = $41,950 - $24,000 = $17,950
Tax = .12 * $17,950 = $2154
Net = $41,950 - $2154 = $39,796
There was an early attempt at an online calculator, but in their haste....they got the Personal Exemption removal thing wrong. Could this interactive calculator be useful in any way --
How would one work around the obvious error ??
Is there another online calculator ??
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