Regarding the new tax plan: They say it is going to save middle America money but what about someone who is single, has no children, gambling losses and student loan interest and already pays overall 59% of their income in taxes, inc. pension?
One of my single son’s likes to gamble recreationally. He wins infrequently, and over a year he normally loses more than he wins. some years he has won over $100,00. He owns a small cash-type business and this is his recreation. There are three huge casinos in his area. The tax plan will eliminate the gambling loss deduction so he would have to pay tax on money he won (thousands) but not be able to deduct the losses. It would ruin him financially if he has to pay taxes.
Casinos will suffer from this because the thousands of retired people who come up to Vegas, for example, will not gamble if they have to pay tax on their nickel machines winnings. social security doesn’t allow it. Professional gramblers deduct their losses on a Sch C. since it’s considered a business,but what about all the middle income people who go there on vacation? So, that will cut into the travel industry.
Another son has very high student loan debt. He went back to school to get into the medical profession. He can barely afford the monthly payment but he has been promised loan forgiveness at 10 years. Now I’m reading that they want to do away with that.
They want to do away with the student loan interest adjustment. That is an up to $2500 deduction from income.
It will also take away the deduction for things like hurricane damage.
I think this thing has been very poorly thought out and certainly not by consulting with tax professionals.
I don’t think the gambling losses part will garner much sympathy. But it’s obviously a ripoff. This thing is going to increase the deficit, and if it’s going to do that and it’s really a middle-class tax cut then it would just pick an income limit to consider and slash the income tax below that limit. I don’t know what the limit should be, I’ll pull $75K a year for an individual out of the air and say the income tax for anyone making less than that should be cut by 50%, climbing back up the current level over the next 5 to 10 years. The influx of cash to people who are going spend almost all of it on consumer products and housing would be a huge economic incentive, the rich will end up with a percentage of all of it in their pockets anyway, and the only reason they don’t like such things is because they have to compete for the profit instead of having it guaranteed by the government.
Do it anyway you want, but if it doesn’t limit the cuts to people with middle class incomes then it’s just another ripoff.
I suspect the average IQ in DC is 100, but even this lame-ass tax plan is better constructed than the pitiful argument of, “Won’t someone think of the gamblers?!?”
You can deduct losses up to your winnings. For example, say you won 50,000 dollars one week and lost 50,000 the next. If you couldn’t deduct your losses, you’d be on the hook for that $50,000 on your tax bill even though you actually netted 0 from gambling. You don’t get a “tax break” for gambling losses, but rather they’re just used to calculate your net gain from gambling. You pay taxes on the net gain.
I don’t know what this law is proposing to change, but removing that deduction doesn’t make much sense. Let’s say you play a thousand spins at a roulette wheel betting red for $100. For simplicity’s sake let’s say you break even, winning exactly as much as you lost. Your actual net gain is $0. But you won 500 $100 bets, even though it was off by losing $500 bets for a gain of zero. Are you saying under the new tax plan you’d owe money on the $50,000 you “won” even though your net was zero?
That said, I’d imagine the gambling exclusion is probably the 142nd dumbest/most harmful change this law will attempt to inflict. You probably want to pick one of the more important ones if you want anyone on your side.
My sympathies toward gambling addicts notwithstanding, it’s hard to feel sorry for someone struggling with student loans when they’re taking major recreational gambling losses.
And I see no evidence that loan forgiveness is a financially sustainable concept. It was in theory, but too many people qualify under the current law. I say that as someone with an insane amount of student loan debt who is eligible for student loan forgiveness, so if I should have any bias, it’s in the other direction.
It might not surprise you to know that, if this story is correct, the OP has misrepresented the situation. You will still be allowed to deduct gambling losses (at least, up to the extent of gambling winnings), but it is going to change the rules for deducting other gambling-related expenses:
Either way, as you say, this would far from the dumbest and most harmful consequence of the GOP tax proposals.
The average IQ in DC is [Dalek voice]FOUR.[/Dalek voice] So you’re correct, in binary.
Seriously, though, gamblers being expected to pay taxes on every temporary win would be insane, and only intelligible if one seeks to outlaw gambling. And if they don’t also do it to stocks, bonds, derivatives, and commodities, it would be clearly an attempt to drive compulsive gamblers into betting on the crooks in the finance industry, and therefore evil.
But, since that’s not quite what it is, this is just more rearranging the tax code to avoid actual effective revenue-raising where the actual money is.
Thank you for pointing out the reason that taking away this deduction is not a good idea. Most people don’t understand anything about taxes, much less itemized deductions.
so, even if you are a professional gambler, you will only be able to deduct losses to the extent of winnings. A major change is business expense theory.
The law that you can only deduct gambling losses up to the amount of reported gambling winnings is already part of the tax code, and has been for some time.
Since the new tax plan doesn’t allow mortgage interest, it will no longer be better to buy a house than to rent one. This is reflected in the fact that 35% percent of people who live in houses, rent them rather than buy them. And depending on where you live, the rise in the price of homes will not keep up with the tax savings. That also affects banks, whose portfolios consist of a lot of residential mortgages. I’m not sure, but if state tax is no longer deductible, it seems to me it would drive some people to move to one of the tax-free states when they retire. Or move before if they are able to.
Trump has cooked all this up with the help of his trusty advisors to make people think they will be getting a tax break, when they won’t. He and his wealthy friends will be reaping the benefits. I won’t be around much longer so I don’t care. You reap what you sow. And if you elect an ignorant, perverted man-child to make decisions for you then the U.S. will go the way of thousands of countries in history. just one page in a very long book.
That’s essentially how the America-hating fuckstick managed to go for so many years without paying any taxes, isn’t it? ‘Cept he called his $900M in losses “investments.”
The new tax bill “allows mortgage interest”. What it isn’t going to allow is for new homeowners to deduct that part of the interest on a mortgage that is > $500k in a given year from their taxable income. People who already own homes are grandfathered in at the current level of $1M. That is, you get to deduct interest on the first $500K, but not above that.
Folks would be more sympathetic to you if you did’t keep spouting nonsense.
My point about student loans still stands. Something needs to be done about the student loan debt burden, but I don’t think loan forgiveness is the thing. For one thing, it kind of incentivizes fiscally risky choices for a benefit that may or may not be permanent. What we need to do, somehow, is reduce the cost of education.
