Senate’s Joint Committee on Taxation Shows Everyone Making $75k or Less Will Get a Tax Increase
Combined with the fact that The CBO Shows Tax Plan Will Put 13 Million People off Healthcare,and 80% of the cuts go to the top 1% of taxpayers, and it’s hard to see this as anything but a massive giveaway to the super-rich at the expense of everyone else.
It looks like some mod went through re: undoing cuts if the claimed growth doesn’t occur. I guess that’s good? Bill still sucks though.
Probably paywalled, sorry. The Daily 202: Tension over adding ‘triggers’ to the tax bill highlights the Republican identity crisis over deficits - The Washington Post
Which taxes will be raised by this automatic trigger, business or personal (and if personal, at what income levels)?
See “It’s not clear what…”:smack:
My news feed is saying the Senate is close to passing a bill, and might do so this week. I’m hopefully pessimistic wrt the House and Senate reconciling before the end of the year, but I’m tax planning as if they will. Is there any chance that if passage of the bill slips past Jan 1 that the provisions will affect the 2018 tax year, or must they not kick in until 2019?
Let’s push onward, say Republican legislators, despite fewer than 60% of Republicans approving of the tax bill:
Approval of the proposed tax bill has only decreased in the past month, with 49% opposing it overall, compared to 41% in October.
And not many Americans are snowed:
Maybe Republicans will accidentally abolish the value-form. Uphold Marxism-Ryanism!
What a weird 24 hours this bill has had. It looks pretty certain to me to go through, raising my taxes, knocking some of my students off their health insurance (I think, not sure), and benefiting the ultra-wealthy for ideological, not pragmatic, purposes.
Chuck Grassley was on NPR last night interviewed about the bill, and he came across as a smug zealot. My “favorite” part was when the interviewer asked him about the vanishingly small number of people who would benefit from the repeal of estate tax–the <100 families with estates over $11 million.
His meandering answer first talked about wanting to show appreciation for people who had planned for the long-term, instead of living day to day. His example was two families with a $100,000 income, one of whom scrimped and saved and invested frugally, the other of whom lived day to day.
Setting aside the fact that the median household income in his district is about half that amount, a family with an income of $100,000 who spent nothing per year, and who had a $0 tax burden, would have to scrimp and save and live frugally for 110 years before their estate was big enough to be taxed at all.
And that doesn’t even get to the stupidity of the idea that someone with an $11 million estate needs to have a government recognition and appreciation for their “frugality.” Motherfucker, if you have an $11 million estate, that wealth is quite literally its own reward.
It was a totally ridiculous answer. He explicitly didn’t have any argument with the statistics raised to question the bill; it was all this sort of “I just like helping rich people out” blather.
Zealots.
Your calculation here would appear to ignore any growth due to investments.
That and the entire trickle down fallacy fails.
Money trickles down to a new boat for the boss and a new ring for et ux.
Technically, you are right, I left that out of the example. I also left out their mortgage, their groceries, their healthcare, and literally every other expense in their life.
Pray tell: what ROI does our couple need in order to achieve an $11 million estate? How much does this fantasy couple save of their income?
I’m sure all the derivatives, stock-buybacks, and mortgage packages they’re going to be buying with their unexpected windfalls will cause a lot of fast growth…
And that always ends well.
If the SALT deductions get impacted and you are in CA, prepaying your 2018 property tax installment typically due by April 10 could be a good idea to take advantage of the deduction in 2017. This is probably true for other states, but I don’t know their deadlines or state tax rules.
Yep, and I’m doing that this weekend. I don’t trust them not to make it retroactive to 2018 even if the actual vote on the bill that both Houses agree to slips into next year. I also sold some stock that I expected I would sell sometime in the next couple years. CA does not treat long term capital gains any different from ordinary income, so you get whacked. This is stock that I bought about 15 years ago, and it’s not like inflation has been 0 since then.
I was curious, so I did a tiny bit of number crunching. Maybe someone better at crunching numbers than I am can do this justice.
My initial calculation assumed saving $100K a year, but no investments. More realistically:
-The family may pay as little as $6,000 in federal taxes. I suspect it’s more–but let’s say their entire tax burden, from federal and state and any other source, is $10K.
-Let’s say they manage to save more than half their remaining salary: they live off a paltry $40K a year, saving $50K.
-Let’s say they earn 7% a year on average over 40 years; this is what I’m finding is a solid long-term ROI.
-Let’s say inflation is at 0%, and they pay 0% additional taxes ever on this income.
-Let’s say they manage to pull this trick off for 40 years.
with these assumptions, I’m seeing this family could end up with $5,811,037. That’s almost 50% more than just saving every penny, but it involves almost equally unrealistic assumptions. It’s also a little more than 50% of the threshhold for the estate tax.
Unless my calculations are super off, Grassley’s example remains idiotic.
I didn’t check your math but yes just straight up stock market investing isn’t going to get you close. Other forms? Maybe. I know folks who bought farms in nearby Fairfax County back when it wasn’t worth much. Their income has been solidly middle class but I wouldn’t be surprised if net worth is tickling the current limit.
I’m on my phone, so I can’t easily do these calculations, but it sounds like a couple might have $5.8 million at retirement. But they don’t pay tge estate tax at retirement, they pay it at death, maybe a decade or two later. Where would our couple be if they continued their modest lifestyle and 7% returns for another 10 or 20 years?
What drawdown should we assume? Or shall we assuming zero living expenses for the sake of the experiment?
I said “if they continued their modest lifestyle”. In the example given by LHoD, they’d lived off $40k/year for 40 years, I don’t see a reason to think they couldn’t continue that, at least for our example.