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Old 09-29-2017, 08:16 PM
 
Location: Columbia SC
8,974 posts, read 7,749,631 times
Reputation: 12182

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Quote:
Originally Posted by Hannah5555 View Post
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.


As would I. Show us.

 
Old 09-29-2017, 09:49 PM
 
Location: North Alabama
767 posts, read 1,847,753 times
Reputation: 725
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.
 
Old 09-29-2017, 09:51 PM
 
5,430 posts, read 3,452,633 times
Reputation: 13714
Quote:
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.
What 'welfare' are you talking about that provides $30 to $40 thousand per year?
 
Old 09-30-2017, 01:46 AM
 
Location: Washington State
18,549 posts, read 9,592,797 times
Reputation: 15795
Quote:
Originally Posted by cb2008 View Post
Positive, negative, no change?
Any thoughts?

Edit: there is another thread in Economics but I am hoping fro relevance fro retirees who have more than minimum income.
Great for us...double the personal exemption and lowering the rate means I keep more and they take less.
 
Old 09-30-2017, 05:28 AM
 
Location: Ohio
194 posts, read 116,524 times
Reputation: 282
Quote:
Originally Posted by Tall Traveler View Post
Great for us...double the personal exemption and lowering the rate means I keep more and they take less.
I believe they're eliminating the personal exemption...not doubling it. (They double the standard deduction.)
 
Old 09-30-2017, 06:14 AM
 
Location: Washington State
18,549 posts, read 9,592,797 times
Reputation: 15795
Quote:
Originally Posted by dwnmo View Post
I believe they're eliminating the personal exemption...not doubling it. (They double the standard deduction.)
Okay they're doubling the standard deduction which is good for us and lowering the rates are as well.
 
Old 09-30-2017, 08:17 AM
 
1,227 posts, read 1,260,773 times
Reputation: 4310
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.
 
Old 09-30-2017, 08:33 AM
 
210 posts, read 151,031 times
Reputation: 628
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

Difference = -$289 ($289 loss under proposal)
 
Old 09-30-2017, 08:35 AM
 
1,227 posts, read 1,260,773 times
Reputation: 4310
Hi AnnaLee2,

In my calculation for the savings, I used the 12% bracket under President Trump's proposed plan rather than the 10% bracket under current tax law.
 
Old 09-30-2017, 09:59 AM
 
Location: Charleston, SC
1,362 posts, read 768,046 times
Reputation: 2428
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 --


https://www.money-zine.com/calculato...an-calculator/

How would one work around the obvious error ??
Is there another online calculator ??
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