edit:

AGI down 2k this year
Taxable income up 8k
Tax down 200

Looks like just shy of $6,000 in savings under new plan.

 i topped out in the 32% bracket this year (single filer). i made 30k more this year over last. My effective tax rate dropped 0.4%. I hit the SALT cap so I left some deductions on the table. once my ex gets remarried this year and I stop giving her money i'll probably be taking the standardized deduction for tax year 2020.

I helped 4 people with their returns plus mine.

All 5 had a drop in effective tax rate from 2017 and all incomes were very similar year over year.

Incomes were from below 50k to over 400k.

The highest income of the 5 was in a high SALT tax state and despite the big loss in deductions, the lower tax rate more than offset the loss.

Seems like the plan to reduce taxes on the middle class DID work.

I dont think the arguments against the tax plan were that the middle class were not temporarily going to see a slight decrease in taxes. (I think some deductions are going to be phased out).

I think most people were arguing that the rich would see much more tax breaks, and that the tax breaks would further increase the deficit (which would later lead to the loss of services).

So most in the middle class should see a slight decrease in taxes temporarily, followed by loss in services to try balance the budget (while the rich maintain a large tax break).

I finished my taxes; it was an interesting year with a lot of changes this year for wife and i. For us we are getting a "big" refund (for us); 50% of it is federal, and 50% state due to moving from cali to tex in april, so not Trump related. The new standard deduction is huge for married filing jointly, so that is the main driver of our federal refund. Of course we are taking a chunk of that money and using it to fund an Italian cylcing trip, so outside of giving some to Delta Airlines, we are injecting it into a foreign economy.

Our effective federal tax rate was ~18% in 2017
It looks like our effective federal income tax rate will be ~19% in 2018.

Thanks, Trump

Of course, we declared more income in 2018 (and specifically shunted earnings to 2018 to take advantage of lower rates). I will try to see what it would be if we had similar earnings for those years.

It seems odd to push for a tax system that taxes the rich at progressively higher rates as they make more money, but then -- once we have that system -- lament that tax breaks end up going mostly to the rich.

Paid about 800 less in fed taxes....heirs tax bill will go up because trump put on credit card during recovery.....smart not.

Hmmm... I wonder what your heirs could use to make up for that $800 shortfall on your part?

I mean you cut my sentence in half to remove the part that people actually argue. most do not care that the tax breaks are going to the rich. If the math worked out that the rich needed the tax breaks so the net loss was zero (which is what the GOP said, "the tax breaks would pay for themselves") far fewer people would care. But this of course is not what is happening. The deficit is further increasing, and we have a "spending problem"

think shortfall per adult in usa is more than $800 for current 1 trillion projected deficit. you wanna take on debt too?

''Trump put on credit card during recovery'' recovery from what? The economy started growing in 20010.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

I'm just pointing out that the only way we "take on more debt" by a tax cut is that we each just keep the amount we otherwise would have payed. It's not like the money disappears. It goes into your pocket, and, possibly, on to your heirs.

Then why was it the first thing you brought up?

sequence of events that happen. First rich get most of tax breaks, then deficit grows, then spending problem. The uber wealthy getting the tax breaks isnt the problem. Its the result of those breaks that is the problem.

What's your definition of a "spending problem" here?

No, the way we actually take on more debt (no scare quotes) by a tax cut is that it cuts revenue and we attempt to provide the same services that people expect.

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"Go yell at an M&M"

I'm pointing out that every extra dollar in debt is a dollar an American kept in their pocket. My point is that your point (and other people's point) seems to leave that 1/2 of the equation completely out of it.

I should add that I'm not in favor of Trump's plan to increase the deficit at this time*. And I don't think the cuts "pay for themselves" in the sense that they will increase revenue via growth more than they will drop revenue via rate cuts.

I'm just saying that we're using an analysis that's painting a much starker picture of what's going on than is really warranted.


* I do favor a number of other tax code changes in the Trump plan.

not my definition, but the GOP has said that the budget isnt balanced because of a spending problem, not because of a revenue problem.

So the GOP's definition of the spending problem is services provided (medicare, health insurance, other entitlement programs). So to balance the budget because of the deficit created in part because of the tax plan (because the tax plan was not revenue neutral), spending needs to be reduced. So in the long term, entitlement programs will be cut because the tax plan is not revenue neutral.

Taxes up. Low 6 figure income, but 3 kids and thats the kicker. Already took standard deduction.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

"I'm pointing out that every extra dollar in debt is a dollar an American kept in their pocket. My point is that your point (and other people's point) seems to leave that 1/2 of the equation completely out of it. "

To be more accurate, every extra dollar in debt is 10 cents in my pocket and $100 in the pocket of a billionaire.

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-----------------------------Baron Von Speedypants
-----------------------------RunTraining articles here:
http://forum.slowtwitch.com/...runtraining;#1612485

It's not more accurate for two reasons:

1.) It's a dollar for dollar trade. You can't go $1 debt for $100.10 in pocket money.
2.) Even putting down that 10 cents goes to you and 90 cents goes to a more wealthy person is not more accurate because it's implying that your share of the new debt burden for the $1 is equal to the more wealthy person's share. It's not.

I mostly finished my taxes in Turbotax at this point all I need to do is file. From what I see we paid about $4.5k less in taxes this year.

Yeah we paid less but I don't see how this is going to stimulate the economy, on a daily basis I didn't change my spending habits (I'm still a cheap bastard) and I'm just applying more to savings/mortgage principle. And what even sounds weird: with the long term debt issues, I was ok with paying more in taxes, I don't want my kids to be burdened with my debt. Yes its a spending issue not a revenue issue, but they are on the same side of the equation.

It felt weird getting the standard deduction.

Small decrease (< 1%) in effective tax rate. Much of what we might have gained in lower rates was lost due to the cap on state/local income & property taxes. We're getting close to standard deduction territory, except for relatively vigorous charitable giving.

I did go from substantial refund to substantial payment to make; it seems that the way in which withholding is calculated left significantly more money in my paycheck that is now being extracted back by Uncle Sam.

I'm a CPA, this has been a fun discussion to follow (as has been the whole TCJA discussion by politicians and the media).

Fun times :)

One thing is obvious from people bitching and the coverage. No matter what you do with the rates, make sure you fix the holding so people get a bigger refund. All the noise makes it obvious that people equate the amount of a refund directly to the total amount paid.

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I'm beginning to think that we are much more fucked than I thought.

I am the except same situation, charitable giving is what gets us over the 24K standard deduction (Married, filing jointly, wife doesn't work)...writing the biggest check I ever written to the govt...trying to figure out the right withholding...1/3 salary, 2/3 commissions/bonus. The jump from 12% to 22/24 is not that big of a leap is punitive comparatively speaking.

+1 . People are morons.

Oh no, I'm getting $500 rebate instead of $2k. No dumb ass, your HR department is doing a better job withholding

Quick question - I see a lot of people complaining in the media about their medical deductions going away- but I cannot find anything supporting medical dedications going away. Can you confirm? (My Mother lives in locked memory care so basically has her whole income offset with medical deductions- which is well above the standard deduction - so this would be a massive shock to her finances). I’m still waiting for some paperwork to send out her tax info to her cpa.

Damn, I think you have a pretty good mortgage interest and property tax also. I mean I don't think your giving $24k. We donate about $5k-$10k a year and still take the standard deduction. Some years were close but not anymore. Guess paying off the mortgage and only having $3k in property tax will do that to you.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Pretty sure they "Go away" cause they don't have enough to get over the new higher standard deduction. So all deductions "go away"

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I'm an Engineer (CHOO CHOO) and its a fun discussion that seems to show how skewed on the income scale the population of this place are.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I live in TN...I get over 24K this way...11K in mortgage interest (we are paying lots extra on our mortgage to get it paid off in the next 4-5 years), 4K in prop taxes, 7K is sales tax (which I may only get to write off a total of 10K in state taxes due to the changes), over 25K in giving (things we care about), and a few other small things. My W2 is screwed up so I haven't actually filed...but I've been imputing the estimated numbers. Based on all this, I in in the 24% marginal bracket.

Bottom line, 80% paying less, 20% paying more...I think I may be an outlier since I live in a low tax state. But the the new rates hurt when they ramp up, could we throw in a 16% rate between the 12 and 22, :)!...and many things that do me no good anymore (IRAs contributions, 2 kids in college - I pay the full ride). I am planning on working in the same role for 18 months (I will 56 then) and then seriously, down sizing my life. Its just not worth it and we live on much less.

+2

It is sadly believable that in America, people don't understand this. Did they notice they were taking home more every paycheck without their company giving them a raise? Good grief. The line on the form says, "this is your total tax." They need to learn to read it.

The media (left-leaning drivel media) are jumping all over this and feeding the "oh no my refund is lower" frenzy. I mean, why actually educate the general populous on the why, when you can control the narrative.

While in general I agree with you about actual taxes paid, but I'm just a case of one the ramp up in rates and losing thousands in deductions (went away) I am paying way more than I planned...what gets me I actually made less money in 2018 than 2017, I didn't adjust my withholding, I still thought I had a good handle of actual taxes I would pay...I am writing the biggest check I ever have. Many are going to be surprised. But the majority are paying less.

It is sadly believable that in America, people don't understand this. //

Every story I have seen on this, either prefaces it with it could be the withholding, or they have a guy on after the story saying that this is probably the case in most instances, so maybe you turn off you leftie news too soon?? (-; Anyway, it is not that big a stretch to think people are not going to notice $5, 10 or 20 bucks more a paycheck, it just isnt enough to really register. But add that up, 10 or 20 over 52 weeks, and that is a nice sum, one people can relate to. And certainly miss at the end of the year, regardless of the fact that they actually got it during the year in tiny increments..

One of the things I like about the Trump tax plan is that local and state taxes are not deductible. A rich person's federal taxes shouldn't be different based on where they live.

I agree with 1/2 of what you said.

A resident of a poorly run state (i.e. NY, NJ, CT, CA) should not have their federal taxes reduced because they chose to elect terrible state leaders who over-tax them.

The residents can chose to vote them out at any time and reduce their state tax bill.

Sadly, their overall tax bill will be lower thanks to the reduced rates for a large majority of the residents in the poorly run states so they won't vote to remove the terrible state leadership.

The new Tax laws are doing wonders for the Treasury. According to the WSJ:

"WASHINGTON—Federal tax revenue declined 0.4% in 2018, the first full calendar year under the new tax law, despite robust economic growth and the lowest unemployment rate in nearly five decades.
The Treasury Department said Wednesday federal revenue totaled $3.33 trillion last year, while federal spending totaled $4.2 trillion, a 4.4% increase from the previous year.
That pushed the U.S. budget gap up to $873 billion for the 12 months that ended in December, compared with $680.8 billion during the same period a year earlier—a 28.2% increase.
Treasury has attributed the weaker revenue collection to the sweeping changes to U.S. tax code that took effect in January 2018, including lower corporate and individual income-tax rates."
Additionally, the national debt has hit 22 trillion dollars.

Woo hoo!! MAGA!!

What's the expression? Make hay while the sun shines...

And 7 million folks are more than 90 days late on car loans....

Any idea how much of the change in the budget gap is a direct result of the fed increasing rates?

Any idea what the change in sales tax revenue at the state level was? Be curious if that offset the .4% decrease at the fed level. (trade one tax for another) but the combined change is more meaningful than each one separately.

Similar with me. I used Turbotax and I'm writing a bigger check than last year but my effective tax rate went down from around 21.5% to 18.5%. (Our withholding was a lot less than last year due to the changes.) Our income was significantly different (lower) so as an experiment I plugged in last years W-2's into this year's Turbotax. If our income would have been the same, taxes would have gone down by around $9k compared to last year. I was very surprised by this as I thought we'd get hammered by the cut in deductions. Standard deduction for us also for the first time probably since we bought our house in 1998.

We'll take the money, but I'm not so sure were the poster child for needing a tax cut.

---

Kevin

http://kevinmetcalfe.dreamhosters.com
My Strava

And one of them is running for president....



Kamala Harris

✔@KamalaHarris




The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.


https://www.foxnews.com/politics/harris-fact-checked-over-nonsensical-claim-trump-hiked-taxes-on-middle-class

Average refund amount now higher than last year's. This is, of course, not being widely reported.

https://www.washingtonexaminer.com/...funds-have-increased

So HR departments are doing a worse job of withholding.

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How does Danny Hart sit down with balls that big?

You let your HR tell you how to do your tax withholding?

But, of course, your question and my answer are off topic anyway. The issue of my post is the reporting.

It's a joke see...

Earlier in this thread when reports showed lower returns it was blamed on HR departments

So clearly now that reports are showing higher returns it is also to be credited to HR departments.

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How does Danny Hart sit down with balls that big?

My wife's HR department really buggered up withholdings, some how they decided to withhold 33% less than they did last year. I thought I had us sitting right at even stevens for taxes and instead we owe more than I have ever paid.

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Pactimo brand ambassador, ask me about promo codes

The humor escaped me. Apologies.

It is funny to me how little people understand how withholding and refunds correlate and how differently they treat their regular paycheck and whatever refund they might get.

So you didn't find the big raise you got odd?

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How does Danny Hart sit down with balls that big?

I don't manage my wife's finances. When my withholdings changed, I did some quick math and it shook out to match what I though my tax bill would be. Should have done that same check on her's, but instead I told her it was just adjusting down to our "new rate." Shame on me... Hard to believe you can claim 1 and still end up with a big tax bill.

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Pactimo brand ambassador, ask me about promo codes

That is a good observation. So happy I overpaid so now I get my own money back

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They constantly try to escape from the darkness outside and within
Dreaming of systems so perfect that no one will need to be good T.S. Eliot

Isn't withholding determined by whatever you put on your W4? HR departments are out there willy-nilly adjusting withholding? It's been a while since I was a salaried employee, but that's how I recall it.

Well they process pay roll, its not like the fed takes a chunk out of everyone's paycheck individually.

I found it odd, I claimed 2 on the W4, she claimed 1. I out earn her by a bit ($15k), and I paid more than 2.5x as much federal income tax via pay roll deductions.

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Pactimo brand ambassador, ask me about promo codes

Average refund amount now higher than last year's. This is, of course, not being widely reported.



Are the greater refunds from losses investments, less capital gains, less interest on savings, higher property taxes, less withholding tax at source, greater medical expenses or charitable contributions?

Maybe it's not widely reported because it's not a simple answer?

That didn't stop people from reporting that returns were down and people were unhappy about it -- boo Trump. But now, crickets from those same outlets. That's the point of the article I linked.

Yeah, that is odd. I realize HR processes the pay roll, but I would assume they follow some kind of IRS guidelines for withholding based on income and your W4. But given how goofy the W4 calculation is, and the discrepancy between you and your wife, maybe not.

That's what I figured, I knew I claimed 2 and she claimed 1, there was no way we could end up paying in. I was pretty well even and she should be getting money back, but that isn't how here company managed the new withholdings.

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Pactimo brand ambassador, ask me about promo codes

My wife and I have typically had withholdings so that we just about break even each year. We usually get a small refund, somewhere between $500 and $1,000 is a typical year. My tax situation changed this year from typically getting a small refund to owing a small amount. With the changes in what can be deducted this year, we ended up with the standard deduction instead of itemized and ended up owing just under $1,000, so it was somewhere about a $1,500 to $2,000 negative swing from a normal year for us.

We haven't gone to our tax guy yet for any official numbers, but my wife was concerned enough to do a rough thumbnail so we'd be at least mentally prepared to get hit owing a much larger amount than recent years... By her calculations, we'll end up owing about $3500 ~ vs ranging between owing about $400 and receiving refunds anywhere from a few hundred up to about $1500 off the top of my head.

So substantially worse for us, by a factor of roughly 2-3X.

Somewhat immaterial. Did my taxes over the weekend. Refund is abiut the same, but my income is about 10% higher, higher dividend amounts this year, $24k standard deduction is greater than what I could claim in the past, and tax rate was reduced for my bracket. Those who are at least halfway decent at math should be able to compare this year's oranges to last year's apples. I got more oranges throughout the year.

Same here - well, at least the end result. We f'd up our 2017 taxes/deductions because we didn't account for a new source of income and underpaid by five figures (WHOOPS!), regardless we wound up with an effective tax rate of 18% two years ago, 15% this year. 3% more in our pockets this time around, I'll take it!

Our effective tax rate was same as last but there was far less withheld do we have to come up with a huge bunch of cash. From what I’m hearing this was the trick-take less during year so it looks like lower taxes. Markets that get the tax refund bump are getting hurt.

I like the dems from the big tax states complaining about the $10k SALT limit. This was one part of the new tax laws which hit almost all upper income and they’re pushing to get it repealed

https://www.marketwatch.com/...eductions-2019-02-20

That seems perfectly consistent to me from a purely logical perspective. If you want a "progressive" tax system, why would you want it undermined with "anti-progressive" changes. Doesn't make much sense to have the government take money from the rich with its left hand, sneak it around the back and hand it back out with the right hand.

I'm just replying to the last post in the thread but just listened to a 10 minute ''history of the US income tax'' and it reminded me that under Eisenhour, when we had a max rate of 91% and a corporate rate of 30%, this country was booming. We build a highway system, we sent men to space, businesses were making money so fast they didn't know where to hide it and it only took one income to support a family with six kids.

I believe Kennedy started the tax cutting, but Regan started the cutting and borrowing. So now this country is not only broke but if it had to apply for a credit card, it would be turned down. Can any of you who are so happy about another tax cut for the wealthy and the corporations see the math here?!

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Any debate about tax rates should always be about "effective" tax rates. Yes, we had very high nominal tax rates in the 40s and 50s but filers also had way more leeway in terms of deductions (and there was no AMT back then).

Good point, but the USA federal tax rate is still quite progressive. A tax cut is not a right hand/left hand sneaky thing.

Edit: Keep in mind that in 2014 the top 1% paid 39.48% of all federal taxes. That's more than the entire bottom 90%.

You're right, not that sneaky. (Though I'd argue that many tax breaks are more easily accessible by those who can afford expert accountants and tax lawyers).

It is still quite progressive. But I don't know what's progressive enough, or what the "progressiveness" should optimize for. Optimize for tax revenue? For GDP growth? To provide incentive to high-earners to earn more? For reduction in poverty? To expand the middle class?

"I think in today's world we need a balance of higher taxes and better budget control to get in the black, but it has to be modest."

I think most sane people would agree with this statement. the issue is the right doesnt want any taxes and doesnt want the budget under control (at least based on their policies presented where they massively increase spending).

The left wants the higher taxes, but doesnt really want to get the budget under control.

So the two options are 1) higher taxes with no budget control, or 2) lower taxes with no budget control.

This change took a lot of political courage. It's a good change because it removes tax incentive distortions. Hopefully the Congress will stay strong. The federal income taxes of the rich shouldn't change based on where they live.

Not to mention the rest of world was destroyed and only had one country to buy from to rebuild.

Strange how quickly folks are just fine with actual double taxation, after opposing it for a century or so (capital gains and estate taxes aren't actual examples of "double taxation"). Also strange how folks now are much more willing to accept greater reliance on federal taxation, rather than incentivizing state taxation as a way of funding and creating state policy. Also strange how folks who largely aggregated all taxes on income to complain about the highest marginal rates on individual earners no longer bother to make that calculation. Strange how no one points out the disparity between revenue and expense now going to lower income states (most of which skew anti-government). Strange how no one points this out.

Tax incentive distortions continue to exist, they have switched somewhat. You are mostly applauding reduced tax revenue for states, while ignoring individual tax loads. When you say "the federal income taxes of the rich shouldn't change..." you are obviously ignoring "total income taxes". One would argue that total tax load is vastly more important (and it was until six months ago). BTW, I don't really disagree with some of these tax load shifts, but we have lost the ability accurately tell a complete picture and reconcile it with our previous attitudes. It would be nice if folks would choose to see all sides of an issue.

Meh. The whole debate turns on semantics. Even if you prove double taxation -- and I contend that I have! -- it's not like anything has to change. The response is mostly: "Life's a bitch. That's the code."

State policy doesn't need excessive taxation. States shouldn't be getting a little "something extra" from the Feds by socking it to their residents. That is not a good combination IMO.

I hear you. Aggregate is still king for me. I intend to keep all my taxing authorities -- and the LR -- aware of that.

I see it pointed out all the time. I would imagine that will increase.

This didn't reduce tax loads for the states, but it will eventually lead to that because total individual tax loads are what matter to people. (So I agree with you.) In fact, I predict this could lead to lower individual tax loads for everyone, instead of having states incentivized to increase those loads at the expense of our national tax bill and finances.

capital gains and estate taxes aren't actual examples of "double taxation


Is this a case of saying something stupid multiple times you hope people will believe it?


Note: THIS IS THE 1ST TAX:


Company Makes $1,000,000 pays 21% taxes
Net $790,000


Note: THIS IS THE 2nd TIME THIS IS TAXED
Company pays is owners the $790,000 in dividends taxed at 22% taxes
Owners Net: $616,200


Since the same money is taxed twice, this is an actual example.

True, and this is an example that is extremely rare. Estate taxes and capital gains taxes are still not examples of "double taxation".


You can't come up with an entirely different example, and pretend that it disproves this statement.

capital gains and estate taxes aren't actual examples of "double taxation
You can't come up with an entirely different example, and pretend that it disproves this statement.

OK. Let's say I'm that lucky person in South Carolina and I just won the $1.5 billion. And Take the $870 Million option.

I pay a 37% tax on that (This will be the 1st tax).


When I see that I just paid $322 Million in taxes I die and my kid gets the remaining $548 million
He then pays 40% on $311 Million (This would be the 2nd tax)


Does this help?

No, you are wrong about that being an example of "double taxation".


That is a separate transfer of money (first, the state to you, then at some later point, from you to you kid). There are all sorts of transactions as money passes from hand to hand: 1.) I get a paycheck (income tax withdrawn), 2.) I then buy a pack of gum (sales tax). That isn't "double taxation" (as it has always been understood), in that these are separate transfers. Money is taxed in many ways as it passes from hand to hand.

As stated often, if you just gave the balance to your son, he would have to pay a tax on the gift. If you paid it to him, he would have to declare it as income. That isn't "double taxation". Estate tax is the big exception to the basic reality that money is usually subject to taxation when it is transferred to a different entity. Add in capital gains resetting, and this results in generational hoarding to reduce taxes. This places a great deal of wealth out of circulation, since it makes sense to wait for estate transfers to pass on untaxed benefits. (yet another problem with effectively banning estate taxes). I prefer a more consistent approach with fewer exceptions, leading to lower maarginal rates.

I just finished my taxes.

My effective rate was identical to 2018 (17.5% of my adjusted gross income), despite losing about $6000 in deductions because of the new $10,000 limit on SALT deductions.

So my verdict is nothing changed. Now, I do owe $20.00 instead of getting a $4000 refund (last year), but I was more than happy to pocket the money instead of having it held hostage for 12 months.

Is there something inherently wrong with that. I wonder what the top 1% had as much income as the entire bottom xx %

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

1.) I get a paycheck (income tax withdrawn), 2.) I then buy a pack of gum (sales tax). That isn't "double taxation"

It's not double taxation because you have a choice. You don't have to buy the gum. Plus the feds don't collect sales tax.

Explain how one can live forever to avoid the estate tax?

No transaction. I make money, then die. Taxed when I make it. Taxed when I die. Same money. 2 taxes, both federal.

Well, when the payment percentages look like this there's something wrong with worrying about small rate movements producing anti-progressiveness in the code.



No. Heck, no. We have a very progressive income tax system. This very question goes to the impression being created by the "worry" in point #1.

HUH? what you qoute me on is a statement of fact I just don't know what the xx % is. I can tell you to be in the top 1% your household income is over about $450,000 the top of the bottom 90% have a household income of $100,000.

So It doesn't surprise me that totally the income tax of all those making $450,000 up pay as much income tax as all those making less than $100,000.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I'm not sure it was much a of change. I live in a state with high income tax and I hit the top marginal rate of 9.9%. My itemized deduction was cut by $7K because of the $10K SALT limit. My effective tax rate was identical (17.5%) to 2017 and I actually made slightly more money.

So, reducing this deduction had no effect (for me). I realize this is just my specific example, but for all the complaining about it, I would be interested to see the data that says this is costing relatively wealthy people a lot of money (or not). I could complain that there was a supposed tax cut and my taxes stayed the same, but I don't have an issue with the idea that some should pay more. The only thing I will complain about is the government just wasting the money on stuff like wars.

Same money, different taxpayers. You can't pay the inheritance tax, you're dead. Your heirs pay inheritance tax.

No different than if I pay a roofer to put on a new roof. My money was income for me and now it's income for him.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

We seem to be doing a little worse this year, ~$500 difference. No significant changes in income, etc.

So yes, the same money was taxed twice = double taxation.

and

So then the roofer pays a plumber, a computer repair-man and a baby-sitter. Each of them owes their own income tax. If you insist on calling that 5x taxation, you'd be wrong.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

If you can’t see how it’s double taxation, you would be stupid.

Reading you two banter on about this has been fun, now that it has gotten to childish name calling I think its just about over, but to try and keep it work it seems you both have a different definition of double taxation, Might help the discussion if your both clearly define what double taxation is.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

When the government taxes your money, then labels your money something different and taxes it again.

Name-calling aside, the standard definition of double taxation refers to two separate taxes levied during the same transaction/transfer on the same asset. You can redefine it to mean what you wish it to mean, but that is not the standard definition. It isn't just semantic, there are all sorts of policies which allow one to deduct the cost of the tax (limiting deductability was the big shift in the 2018 tax law). Your definition of double taxation differs significantly from common usage, whether you see it or not.

https://investinganswers.com/...double-taxation-1138

So using your definition if your income is taxed, then the money is deposited in your bank, then taxed again when you withdraw it at the ATM, you aren’t being double taxed.

Effective rate based on AGI

went down 2.5%

based on taxable (our income was a bit lower and deductions were a lot lower (now on std deduction))

went down 3.2%

Our refund went up with the same W4s (as a counter to some reports).

“This is going to be one of the great gifts to the middle-income people of this country that they’ve ever gotten for Christmas.”

Poll finds only one in five expect to pay less tax this year as a result of the 2017 tax reform. MAGA!


https://www.reuters.com/...survey-idUSKCN1QW1BY
.

"1.) No transaction. I make money, then die. Taxed when I make it. Taxed when I die. Same money. 2 taxes, both federal."

You are taxed when you make it.
If you spend it before you die, then the person who receives it as income is taxed when they "make it."
If you die, then the person who receives it as an inheritance, provided that it is several million dollars or more, gets taxed.


You can argue about whether or not a person should be taxed on an inheritance, but it isn't a double tax.



The example of the ATM would be a double tax because the same person got taxed twice on the same money.

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-----------------------------Baron Von Speedypants
-----------------------------RunTraining articles here:
http://forum.slowtwitch.com/...runtraining;#1612485

Cannot use the word “plan” in same phrase as Trump. Obviously why Mueller having problem in Russia investigation.

The example of the ATM would be a double tax because the same person got taxed twice on the same money.

If my kid went to the ATM and took out money and it was taxed, would it be a double tax?

"If my kid went to the ATM and took out money and it was taxed, would it be a double tax?"


An inheritance of $5 billion and a $20 weekly allowance to your 10 year old son are both exactly the same or completely different depending on what argument you want to support.

Likewise receiving money in exchange for work or receiving it as a gift are both exactly the same or completely different depending on what argument you want to support.



A dollar is taxed an infinite number of times as it exchanges through the hands of an infinite number of people. Even in your ATM example there's nothing to stop the government from taxing the use of the ATM. There's also nothin to stop the government from taxing your kid's allowance.


Calling something "double taxation" is a phrase that appeals to a person's emotions to think that it is "unfair," but it is otherwise meaningless. The bottom line is that you don't think your child should get taxed when you give him your estate. It has nothing to do with who paid what taxes on anything.

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-----------------------------Baron Von Speedypants
-----------------------------RunTraining articles here:
http://forum.slowtwitch.com/...runtraining;#1612485

Finally got my return back.

In 2017 I paid an effective federal tax rate of 26.6%

In 2018 I paid an effective federal tax rate of 24.3%

I try to keep my money all year so I aim for a zero balance on getting a refund/owing. I made adjustments based on projections of the tax cut effects and was curious and a little nervous how that would work out. I owe $240.

Mine very similar. Good news! Unfortunately someone's might go up dueto 17% increase in deficit. https://www.usgovernmentspending.com/...l_deficit_chart.html

Well, well, well time for the poor folk to report in. (I'll give a hint, I like my crow Medium Well)

So AGI down about 2% from last year.

Effective tax rate (tax paid/AGI)
Removing the College tax credits I get as my one kid didn't spend enough this year to max it out so it skews the numbers.
Without College Credits.
Last year 8.8%
This year 6.7%
THANK YOU TRUMP --- MAGA --
With the college tax credits
4.4% - last year
3.5% - this year

Refund is down by almost exactly the change in college tax credit. So I would say No change in my refund.

Back to my little pink house.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

My effective tax rate increased by 1% this year.

My AGI was up a little, I was dropped into a lower tax bracket. Living in California i'm pretty sure it was the 10k SALT cap that limited my deductions causing the overall increase.

My refund is way down, but I did a better job of estimating withholdings this year.

Got my documents back.

Single filer; itemized deductions; AGI was pretty close to the same 2017 to 2018.

Effective tax rate:
2018 - 12.52%
2017 - 14.11%

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clm
Nashville, TN
https://twitter.com/ironclm | http://ironclm.typepad.com

Not sure my effective rates, but income last year was up $11k and I'm paying $12k less in tax. Net of Federal, NY and NJ state taxes I have a v. nice five figure refund.

Thanks Don!

Mine down. First time I have gotten a return in 5 years despite little changes and no extraordinary behavior or items. I'm in that area where I guess I'm considered a 1% but still too poor to engage in any significant tax saving behavior. The people on the short end of the stick seem to be blue staters with high state and local taxes. Hard to really feel much concern for them when they choose to elect people who raise their taxes, and politically they don't vote for republicans anyways so there input probably wasn't much of a factor for the republican controlled house. Unfortunately that is where we are heading, where majorities and presidents will very much cater national policy to states that support them over individual districts.

Did u calculate your share of debt increase?

I thought that was my kids' problem?!

They will have to put u in cheap home, and not have money to visit u.

Perusing the thread, and I do see the different approaches to paying taxes. I have a somewhat contrarian approach to the whole tax paying thing. My whole goal is to owe the most on April 15. If I get a refund, I failed. I have given the federal government an interest fee loan. Of course I don't want to be penalized so I need to manage my estimated taxes and keep in mind the 110% rule. And by owing a bunch, I can play the credit card game and maximize bonus points when paying. (a little game of arbitrage and 30 day float at the minimum)

This year was a bit challenging given all the moving parts. Living in what others think of as a high tax state (CA) I think of it as a state that is still trying to take care of their fellow man, I had to deal with Trumps's attempt at neutering his political opponents donor base. But all in all taxes fell on the federal side (b/c Trump of course lobbies for those with greater financial assets). He has of course mortgaged the future for short lived financial pop (the dude is not known to be a long term focused). Whatever...the tail does not wag the dog.

I find it interesting that so many pundits talk about how taxes are the biggest factor as to how people of means decide whether to settle in one state or another. In my experience, not true at all...you pay your taxes and you move on. Taxes don't drive my decisions as to where I live or where I enjoy my life. It doesn't even remotely come into my thought process. YMMV.

Taxes don't drive my decision to stay in NY, but I can afford to keep two houses here. They don't affect my son's staying in Silicon Valley. Both he and his wife love it there and they can afford it.

When my wife and I were knocking it out of the park earnings wize, I could brag about how much income tax we paid. I sure couldn't brag about out income.

Now my brother, who is also a Union Carpenter, couldn't afford to stay in NJ when he retired. He moved to S Carolina and he and his wife are very happy there. Wealthy people aren't leaving the so called high tax states. People who aren't wealthy are.

Regarding your tax strategy, I'm like you, I always wanted to owe and get the check in the mail on April 14. For some people, having a little more taken out each week is the only way they can save. They feel like they got screwed this year. Of course, when the did get that big refund check, they'd only brow the whole thing right away anyway. But that's their problem.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

I agree with your assessment of the impact on taxes and migration for the lower economic classes. That is why a progressive tax is the solution to generate revenue. The logical fallacy has always been that somehow taxes when raised causes an out of proportion migration of the upper class. This also leads to the conflation that in order to raise taxes on the wealthy you also need to raise taxes on the middle and lower class.

We have seen from the most recent tax cuts that "trickle down" economics was an abject failure. Wage growth has not kept anywhere close to corporate profits. The other problem is that the term "maxmizing share holder value" as the primary goal of all corporations is just a proxy for the wealthy. Share holders of companies are overwhelmingly concentrated in the upper class. The evolution of business imperatives from earlier generations where corporate profits were seen as being split between the shareholders and the employees was the tenet of the past...this has entirely morphed into profits only being entitled to shareholders and seeing labor costs as only an "expense" to be driven down.

Really, If I were to save it instead of paying to much (I already have max dependance so getting them to take less is a bit more work) But Yeah I get about $3k back each year.. let see, if I saved that in my bank account at 0.75% interest I get oh wow.. less than $20 yeah not really worth the hassles.

I guess if I made the bucks and my taxes were $100k a year and I had access to some MM paying 5% then it might be worth the effort.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Down about $100 overall, no real change. Haven't been able to claim kids for a few years so the refund ship has sailed.

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_____
TEAM HD
Each day is what you make of it so make it the best day possible.

My Federal return was down a little and I wound up owing around $350 state. I cannot ever remember owing state taxes. Overall it didn't change mine much at all.

Ours is hard to compare I sold some stock and we had another kid. I don’t feel like backing the stuff out.

However, I owed on state too. That was surprising. I think it was like 300 bucks or so. I was really confused by that too. Since we normally get way too much back on the fed return.

I wasn't impressed. Less return and a tiny bit back per paycheck was a net nothingburger.

Lots of folks I've talked to haven't been impressed, including a couple lower-mid income folks.

This could be a defect in the re-election armor that they can't openly admit. People fester on that stuff.

If I remember right a lot of it depends on how many kids you had too. The bump standard deduction didn’t help if you had a lot of kids. We were still over the standard deduction, barely, so hopefully in a couple years we’ll be under and I won’t have to keep itemizing all the crap on our returns.

The other big one I think that could have hit a lot of people which wasn’t brought up much was removing the interest deduction on equity loans. That’s a huge one people generally took if they were doing any upgrades or paying off credit cards etc.

https://www.lendingtree.com/...-loan-tax-deduction/

One of the central ideas of economics is that incentives matter, and that incentives matter at the margin. Of course everyone living in CA or NY isn't going to move away because their taxes went up a few percentage points. However, all things being equal, an increase in the cost of living versus other states will prompt some folks that were already on the fence to go ahead and leave.

Awesome thanks! I didn’t catch that there were exceptions to this, but still available. That helps for what we may do on our house in a couple years.

...and likewise dissuade someone from moving to the state. There’s a reason why IL, CT, and NY are now losing population on net every year.

A friend of mine works for Inverland which is a mid-sized real estate developer. They just put up two buildings in NYC and describe the market there as “on the edge of catastrophe” saying that there’s “no liquidity.” Just my $0.02, I think the reason Trump recently said “we need a rate cut NOW” is because his friends (if he has any) are NYC/NJ real estate folks and they’re probably telling him that the market is terrible.

I just saw a poll that only like 20 percent of people think their taxes went down.

I find it interesting because I think around 60 percent of people say taxes should have gone down. (Obviously reduces services will likely follow).

But I find it strange that people don’t actually think their taxes went down.

It may be because people thought the tax cut would be sizable in the form of a huge refund. But overall the messaging from the gop seems to have been bad. Seeing how people don’t even think their taxes went down. (Which should be the only benefit from the tax cuts)

I got brutalized.

Live in CA, so took that hit.

Then a non-tax-sheltered brokerage account generated waaay more dividend income than ever before. Really weird. I had to double check the 1099-DIV form like 3 times.

So I had to write $30K check (on top of withheld taxes).

15.2% ETR.

I've got to look up last year, but for 2018 Fed only, 7.4% effective tax


It's way down from 16. My gross income is up 5.7% compared to 16, but my rate that year was 10.07%.

Why do you hate America? ;).

Kidding, but it does point how low actual effective rates are and much they vary. I have some problem when a person who makes a very good income, yet pays less than 10% in effective tax rate, endlessly repeats, "We don't have a revenue problem, we have a spending problem." It's both, and it is always both, and extremely low tax rates are proof that. The anti-tax mantra is especially funny coming from millions of folks who in fact always pay extremely low federal income taxes, and are angry that their savings this year was paltry/negligible.

FWIW, I think that my ETR went up from 18% to 19%. (need to finish it this weekend)

https://www.atr.org/...down-25-percent-year

Must be wonderful to earn so much money. I love this time of year, its when I have hard proof I am in a relative term (relative to those I hang with) poor. You wrote a check for 6x more than I paid in fed. taxes.

Enjoy the income.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

So, in conclusion, a steady dismantling of the middle and lower wage earners by the GOP, with tacit approval from Dems; camoflaged by the daily antics of Trump.

Hard to imagine someone already paying no federal taxes voting for Trump so that he can lower their federal taxes, but if you say so...

Ya that's one reason why they voted for Trump, and ya it's a head scratcher

Hard to imagine someone already paying no federal taxes voting for Trump so that he can lower their federal taxes, but if you say so...


As a tax accountant I realized long ago that people,

• lie about how much they make.
• lie about how well their investments did this year
• have no clue how taxes work
• have no clue about how much tax they pay in a year.

I am imagining this post voiced by Steve Martin as a variation of the intro to The Jerk.

"I was born a poor millionaire. Then the bad orange man raised my taxes to fifteen percent. Fifteen percent! It was brutal. I don't know how much longer the oppressed middle millionaire class can survive in this country."

Haha. I didn't blame Trump, though!

Also I drive a 6 year-old Ford Focus.

Continuing

https://www.epi.org/...gop-tax-cuts-passed/

I wonder how long before the new tax laws impact taxpayer behavior. My only clients that itemized this year were the very wealthy with large charitable contributions. No one else. With the SALT limits, it really impacted those with either large state income tax or here in Texas, the ridiculous property taxes. I have advised many that they should use their non-emergency investments to reduce their mortgages.

I anticipate that it will ultimately impact first and second time home buyers which will impact our economic engines. I think charities will be negatively impacted too.

On the upside, I got a 20% phantom deduction for being self-employed. Like I have been for 30 years.