# How will the new tax reform affect the poor and middle class? **URL:** \ **Category:** Great Debates\ **Created:** [November 5, 2017, 11:30pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844 "2017-11-05T23:30:30Z")\ **Posts on this page:** 17\ **Page:** 3
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [December 10, 2017, 5:18pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/41 "2017-12-10T17:18:17Z")
It will benefit you if you are young, healthy, don’t own a super-expensive house, don’t live in CA or NY, and don’t donate a lot of money every year. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [December 10, 2017, 6:13pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/42 "2017-12-10T18:13:14Z")
> [@BobLibDem](#): > > I’m pretty solidly middle class and I itemize. Property taxes plus mortgage interest plus state and local taxes is quite a snootfull. Now they want to take the state and local taxes away but give me a larger standard deduction. Screw that. Almost everyone thinks they’re solidly middle class. I think surveys show something like 90% of Americans identify as “middle class”. But if we divide the US into quintiles, and call “middle class” anyone in the 2nd, 3rd or 4th quintile, I think you’ll find that most of those folks do better under the new tax plan than before. As noted in the other thread, only about 35% of the population itemizes, and by my definition, 60% of the US is in the middle class. Assuming most of the top quintile itemizes (which I think is a fair assumption), only some small fraction of the “middle class” itemizes, and many of them will, in fact, do better with a higher standard deduction. Are you certain you are going to be worse off if you make some reasonable assumptions about what the final bill will look like? Now, granted, this plan has lots of things wrong with it, but most Americans are going to get at least something of a tax cut from it. I don’t make any claims of being “middle class”, as I’m well into the top quintile and I live in a high SALT state and pay very, very high property taxes. I will get a much bigger tax bill by any calculations I’ve made. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [December 10, 2017, 6:31pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/43 "2017-12-10T18:31:59Z")
> [@John\_Mace](#): > > Sales tax has not been deductible for a long time, so there is no change there. > [@Ruken](#): > > Last I checked you had the option to itemize either sales tax or income tax. This has changed? I looked at the 2016 Schedule A, and the GST deduction is on there. It’s the only way for residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, (as well as most people in New Hampshire and Tennessee) to take this deduction. States with both types of tax can choose over the income or sales tax deductions. What John Mace might be thinking of is that every few years this deduction does expire, and it is only restored at zero hour in December when congress has (thus far) gotten their shit together for a minute. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [December 10, 2017, 6:45pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/44 "2017-12-10T18:45:26Z")
> [@thelurkinghorror](#): > > I looked at the 2016 Schedule A, and the GST deduction is on there. It’s the only way for residents of Alaska,Florida, Nevada,South Dakota,Texas, WashingtonandWyoming, (as well as most people inNew Hampshireand Tennessee)to take this deduction. States with both types of tax can choose over the income or sales tax deductions. > > What John Mace might be thinking of is that every few years this deduction does expire, and it is only restored at zero hour in December when congress has (thus far) gotten their shit together for a minute. No, I really did think the sales tax deduction was eliminated. My mistake. But IIRC (and I might be wrong, again), you used to be able to deduct both as I seem to recall doing during some time in the 80s. ---
**Author:** ![Blue\_Blistering\_Barnacle](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/blue_blistering_barnacle/32/3386_2.png) [@Blue\_Blistering\_Barnacle](https://boards.straightdope.com/u/Blue_Blistering_Barnacle)\ **Post date:** [December 10, 2017, 6:48pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/45 "2017-12-10T18:48:55Z")
So, if deductibility of state income tax goes away, there is no knowing if state sales tax deduction goes away or stays? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [December 10, 2017, 6:56pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/46 "2017-12-10T18:56:58Z")
> [@Blue\_Blistering\_Barnacle](#): > > So, if deductibility of state income tax goes away, there is no knowing if state sales tax deduction goes away or stays? I think sales tax is a goner [no matter what:](https://www.fool.com/taxes/2017/11/17/the-house-and-senate-gop-tax-bills-a-side-by-side.aspx) > [@](#): > > **Tax deductions and credits for individuals** > Let’s start with the largest tax deduction of all, under current law. The state and local tax deduction, also known as the SALT deduction, is a big deal to Americans who live in high-tax states, such as California, New York, and New Jersey. The Senate bill eliminates this deduction completely, while the House allows for a deduction for property taxes only, up to $10,000. > > Some major deductions would be preserved under both bills. Specifically, both preserve the mortgage interest deduction, but the House bill caps it at up to $500,000 of principal (current law is a $1 million maximum.) They also both keep the deduction for charitable contributions, as well as the adoption tax credit, which originally was not included in the House bill, but was part of the amended version that passed. I suppose it’s possible that the compromise bill might put sales taxes back in, but neither of the two bills allows for that deduction now. ---
**Author:** ![TimeWinder](https://avatars.discourse-cdn.com/v4/letter/t/bcef8e/32.png) [@TimeWinder](https://boards.straightdope.com/u/TimeWinder)\ **Post date:** [December 10, 2017, 7:01pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/47 "2017-12-10T19:01:32Z")
> [@John\_Mace](#): > > Sales tax has not been deductible for a long time, so there is no change there. It is in Washington (the state, not the city) ---
**Author:** ![Ann\_Hedonia](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ann_hedonia/32/319_2.png) [@Ann\_Hedonia](https://boards.straightdope.com/u/Ann_Hedonia)\ **Post date:** [December 10, 2017, 7:38pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/48 "2017-12-10T19:38:53Z")
> [@Velocity](#): > > It will benefit you if you are young, healthy, don’t own a super-expensive house, don’t live in CA or NY, and don’t donate a lot of money every year. And don’t need to borrow money for an education. They want to keep the populace stupid so they can stay in power ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [December 10, 2017, 7:46pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/49 "2017-12-10T19:46:30Z")
> [@Ann\_Hedonia](#): > > And don’t need to borrow money for an education. They want to keep the populace stupid so they can stay in power Maybe I misunderstood, but there aren’t really any tax implications for student loans, are there? The change is that tuition waivers (basically, getting part / all of your tuition gifted to you by the institution) is now taxable, right? ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [December 10, 2017, 8:07pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/50 "2017-12-10T20:07:16Z")
> [@HurricaneDitka](#): > > Maybe I misunderstood, but there aren’t really any tax implications for student loans, are there? The change is that tuition waivers (basically, getting part / all of your tuition gifted to you by the institution) is now taxable, right? Student loans are [affected](http://money.cnn.com/2017/11/15/pf/college/tax-reform-paying-for-college/index.html) in the house bill. > [@](#): > > Currently, you can use the student loan interest deduction to lower your taxable income by as much as $2,500. … The tax deduction saves people a maximum of $625 a year, though most see a smaller benefit. The House bill would repeal the student loan interest deduction and the Senate bill would keep it in place. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [December 10, 2017, 8:18pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/51 "2017-12-10T20:18:25Z")
> [@John\_Mace](#): > > No, I really did think the sales tax deduction was eliminated. My mistake. But IIRC (and I might be wrong, again), you used to be able to deduct both as I seem to recall doing during some time in the 80s. Here’s a good summary, it seems to suggest that it was gone in 2014, so you might’ve been right, just for the wrong year. I stopped taking note since my mortgage isn’t high enough to make itemizing worth it anymore. > **[Expired Federal Deduction for Sales Taxes Matters Most for States With No...](https://stateline.org/2015/12/01/expired-federal-deduction-for-sales-taxes-matters-most-for-states-with-no-income-tax/)** > > © Getty Images The deduction for state and local sales taxes expired at the end of 2014, and if it is not extended, people in states with no or limited income tax would be most affected. Anne Stauffer, a director at The Pew Charitable Trusts, leads... > [@Ann\_Hedonia](#): > > And don’t need to borrow money for an education. They want to keep the populace stupid so they can stay in power If this leads to fewer people taking out massive loans when they shouldn’t, ballooning the debt crisis, then I’d consider that a positive, not a negative. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [December 10, 2017, 8:26pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/52 "2017-12-10T20:26:48Z")
In principle, most of the things they are eliminating I’m OK with. I wouldn’t do it all at once, and I wouldn’t let it increase the deficit like they’re doing, either, which means I wouldn’t structure things to favor the wealthy so much. But I’ve long been in favor of eliminating or reducing the mortgage interest deduction, and even SALT. But people have structured their finances with the current tax law in place, and making big changes like they are doing all at once can cause significant disruption. If my taxes have to go up, so be it, but I don’t want to pay more so that some gazzilionaire gets to pay less. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [December 10, 2017, 9:44pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/53 "2017-12-10T21:44:19Z")
> [@HurricaneDitka](#): > > Maybe I misunderstood, but there aren’t really any tax implications for student loans, are there? The change is that tuition waivers (basically, getting part / all of your tuition gifted to you by the institution) is now taxable, right? Fun thing about student loan interest, is that you get to take the deduction even if you are taking the standard deduction. So, there is no “only x% of students with loans take this deduction”, it is _every_ student with a student loan. (unless they are really dumb.) My understanding is that that deduction goes away. That’ll be costing me $625 a year for a bit. ---
**Author:** ![monstro](https://avatars.discourse-cdn.com/v4/letter/m/ba9def/32.png) [@monstro](https://boards.straightdope.com/u/monstro)\ **Post date:** [December 10, 2017, 10:40pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/54 "2017-12-10T22:40:28Z")
**k9friender** , that sucks! Other deductions that are likely being eliminated: From [https://www.cbsnews.com/news/4-popular-deductions-the-gop-tax-plan-would-end/:](https://www.cbsnews.com/news/4-popular-deductions-the-gop-tax-plan-would-end/:) > [@](#): > > **Moving expense** s: If you meet specific IRS criteria and have moving expenses relating to a change in job or business location, those expenses are currently deductible. In 2015 (the last year with available data), approximately 1.1 million taxpayers claimed this deduction, which saved them about $3.7 billion. But the GOP tax plan eliminates it. > > **Alimony** : Nearly 600,000 taxpayers claimed a deduction for alimony paid to an ex-spouse, saving them nearly $12.3 billion. The Republican tax plan also ends this deduction. > > … > > **Tuition and fees** : This special deduction currently allows taxpayers to deduct up to $4,000 of qualified education expenses. The income levels that allow full or partial deductibility of these expenses is the same as for the student loan interest deduction above. Eliminating this deduction could especially hit those getting training for new jobs. The Senate tax bill would also restrict natural-disaster deductions only to federally declared natural disasters. Currently, losses of property not covered by insurance from any natural disaster can be deducted. So this means that if a wildfire burns down your home, you more than likely will not get any tax relief since wildfires are rarely federally declared. Personally, I think that’s kind of fucked up. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [December 10, 2017, 11:23pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/55 "2017-12-10T23:23:47Z")
The tuition and fees deduction sucks and most people take credits instead. I’m not sure what demographic class takes it instead of the credit, but I don’t think it’s low income people. Alimony being taxable vs child support not has always been weird. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 12, 2017, 10:33am UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/56 "2017-12-12T10:33:53Z")
With Ryan openly bragging that the GOP leadership lied to Susan Collins to get her vote, is there any chance that she will come to her senses, and that there will be only 49 votes when the Trillion Dollar Ripoff gets back to the Senate for a re-vote? I realize the House can avoid the need for a re-vote if it passes the Senate version word-for-word, but that version had provisions everyone agreed were serious flaws, no? ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 14, 2017, 8:36pm UTC](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844/57 "2017-12-14T20:36:53Z")
Here is my analogy. Your brother is quite rich, but has a cash flow problem. You need to fix a leaky roof, and your car is on its last legs. He suggests you take out a 100000 2nd mortgage, use $10k to fix the roof, then he will take the other $90K, put a down on the Mercedes he wants, and invest the rest in Bitcoins. Next year, you are supposed to borrow another $10000, get 9000, het gets the rest, etc. He says that if his Bitcoin investments pay off well, he will pay off the whole loan. But you wont get any of the profit besides that. However, if the Bitcoins fall thru, he keeps the Mercedes, but you have to pay it all back. However, by-and-large, your Bro is piss poor at keeping his promises and there’s no signed paperwork with him. Does anyone think this is a good deal? [Previous page](https://boards.straightdope.com/t/how-will-the-new-tax-reform-affect-the-poor-and-middle-class/800844.md?page=2)