Federal Income Tax Reform Proposal - Effect on Californians (law, bill)

[2sleepy]

Originally Posted by jbgusa

Let's see what the IRS position on that dodge is.

Yes, it will be interesting if they say you can designate your income tax to support private schools but not public, don't you think?

[CA4Now]

".....many people won't see much of a difference on their pay stubs. Workers earning $75,000 a year will see an average tax reduction of a bit more than $870, according to the Tax Policy Center. That would amount to about $17 a week, compared to gross weekly pay of $1,442. The sum could be swamped by larger deductions for items such as employer-sponsored health insurance, the employee cost of which has been creeping up, even as deductibles and co-pays rise."

The economic riddle for 2018: Will the middle and working classes see any gains from the big tax cut? - LA Times

[pacific2]

There is also this sneaky little tidbit:

The Tax Law's New Way Of Measuring Inflation Could Take A Toll On Taxpayers
December 27, 2017·5:00 AM ET
https://www.npr.org/2017/12/27/57355...king-inflation

A little-remarked-upon provision changing the way inflation is calculated is among the big changes contained in the tax overhaul signed by President Trump last week.

The new method, using the so-called "chained" consumer price index to determine when to adjust tax brackets and eligibility for deductions, is expected to push more Americans into higher tax brackets more quickly. In the past, the tax code used the traditional CPI measure issued by the Labor Department each month...

..."Compared to where taxpayers would be under present law, by 2027 most individuals will actually pay more taxes," said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.

The difference will be slight, perhaps just a few tenths of a percentage point a year, he says, "but over time, these fractions of a percentage point add up and can amount to a fair amount of money."

[Independentthinking]

Yawn. More cut and paste nonsense that has little to do with the Middle Class in high COL areas. What a surprise. For those that can run the numbers, if you're in the Middle Class in a high COL area, you're F'kd!

[shooting4life]

Originally Posted by pacific2

There is also this sneaky little tidbit:

The Tax Law's New Way Of Measuring Inflation Could Take A Toll On Taxpayers
December 27, 2017·5:00 AM ET
https://www.npr.org/2017/12/27/57355...king-inflation

A little-remarked-upon provision changing the way inflation is calculated is among the big changes contained in the tax overhaul signed by President Trump last week.

The new method, using the so-called "chained" consumer price index to determine when to adjust tax brackets and eligibility for deductions, is expected to push more Americans into higher tax brackets more quickly. In the past, the tax code used the traditional CPI measure issued by the Labor Department each month...

..."Compared to where taxpayers would be under present law, by 2027 most individuals will actually pay more taxes," said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.

The difference will be slight, perhaps just a few tenths of a percentage point a year, he says, "but over time, these fractions of a percentage point add up and can amount to a fair amount of money."

That is because the income tax rates for individuals expense then because having permanent tax cuts would require 60 votes which the republicans couldn't get. So either republicans will extend the individual rates or if democrats are in charge they will either extend them or they will let individual taxes rise. Bernie states the other day he wants to make the tax cuts for individuals permanent so hopefully they can put something together next year.

[2sleepy]

Originally Posted by shooting4life

That is because the income tax rates for individuals expense then because having permanent tax cuts would require 60 votes which the republicans couldn't get. So either republicans will extend the individual rates or if democrats are in charge they will either extend them or they will let individual taxes rise. Bernie states the other day he wants to make the tax cuts for individuals permanent so hopefully they can put something together next year.

But 60 votes have nothing to do with chained CPI, that was just another little way to hurt the middle class, sort of like death by 1000 paper cuts

[shooting4life]

Originally Posted by 2sleepy

But 60 votes have nothing to do with chained CPI, that was just another little way to hurt the middle class, sort of like death by 1000 paper cuts

I dont think an argument of "you are making more money so that put you into a higher tax Ramey" will resonate very well. All people will see is that they are making more money in Trumps economy.

From your same article
It comes down to this: The chained CPI makes inflation appear lower, and that means tax brackets will be adjusted upward more slowly — but lots of workers will continue to get raises based upon the faster-rising traditional CPI. In other words, your income may rise faster than the inflation adjustments


Plus it would only be the income above the threshold that would be taxed in the next bracket, which of course was lowered as part of the tax plan.

[2sleepy]

Originally Posted by shooting4life

I dont think an argument of "you are making more money so that put you into a higher tax Ramey" will resonate very well. All people will see is that they are making more money in Trumps economy. From your same article
It comes down to this: The chained CPI makes inflation appear lower, and that means tax brackets will be adjusted upward more slowly — but lots of workers will continue to get raises based upon the faster-rising traditional CPI. In other words, your income may rise faster than the inflation adjustments
Plus it would only be the income above the threshold that would be taxed in the next bracket, which of course was lowered as part of the tax plan.

So why use the chained CPI, please explain how that helps the middle class, they put it in there because "OMG these people might get pay raises so we have suck the last penny out of them?"

Good God, it sounds like if this tax bill raised your taxes you would scrambling to find a way to defend it

[CA4Now]

The new deduction allows people with pass-through income — profits from a partnership or sole proprietorship, for instance — to write off 20% of that income before calculating their taxes. The clearest winners are therefore owners of existing large pass-through businesses with many employees or lots of physical assets.

Let’s say a hypothetical worker wants to claim this 20% deduction. The first hurdle is that the new law says that you cannot claim the deduction if you are an employee. This means the worker would probably need to give up all or most of her employee benefits — health insurance, retirement plan, vacation pay — in order to be considered an independent contractor, since benefits are one way the tax system determines who is an employee. She will also have to pay her employer’s share of the payroll tax.

The GOP tax plan creates one of the largest new loopholes in decades - LA Times

[CA4Now]

"The idea that the tax bill is doing anything right now with respect to workers' pay is inconceivable," says economist Justin Wolfers of the University of Michigan. "At any given point in time there are literally thousands of corporations that give their workers bonuses...

Apple's bogus claim that the tax cut is making it spend more in the U.S. is just a PR sop to Trump