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Millionaire releases tax return as illustration
Posted on 12/17/17 at 9:51 am
Posted on 12/17/17 at 9:51 am
Normally I wouldn't start a thread about something like this, but this guy does an excellent job in a quick and simple presentation.
Bottom line is he shows how the current tax plan benefits the wealthy in a disprotionate manner. Not just the wealthy pay most of the taxes argument, so a proportional tax cut for all benefits the bottom line of the wealthy more, but rather how this tax cut is very disproportionately aimed specifically at the wealthy.
In summary pass through income (like partnership and rental income) gets a very large rate cut in the current bill while salary/wage income gets a teeny tiny nothing burger cut.
Hard numbers, this guy makes 35k in salary that he pays a high rate on (almost 40%), he is getting about a 1% cut on that. He also makes about $750k on the passthrough income he just collects each year. On that income, the current bill gives him about a 20% cut. Last year he paid about 325k in taxes, now he will pay about 200k.
Instead of a large tax cut on wages, which would actually help most people, increase the incentive to work, create economic growth, etc, this bill gives a 1% cut to the workers and a 20% cut to the people who don't work and just collect passive income each year. That is the exact opposite of what is needed.
Ftr, big picture I do not believe we need any cuts at all right now if spending isn't going to be cut as all it means is we will all pay back these cuts plus a lot more with interest through a tax hike.
LINK
Bottom line is he shows how the current tax plan benefits the wealthy in a disprotionate manner. Not just the wealthy pay most of the taxes argument, so a proportional tax cut for all benefits the bottom line of the wealthy more, but rather how this tax cut is very disproportionately aimed specifically at the wealthy.
In summary pass through income (like partnership and rental income) gets a very large rate cut in the current bill while salary/wage income gets a teeny tiny nothing burger cut.
Hard numbers, this guy makes 35k in salary that he pays a high rate on (almost 40%), he is getting about a 1% cut on that. He also makes about $750k on the passthrough income he just collects each year. On that income, the current bill gives him about a 20% cut. Last year he paid about 325k in taxes, now he will pay about 200k.
Instead of a large tax cut on wages, which would actually help most people, increase the incentive to work, create economic growth, etc, this bill gives a 1% cut to the workers and a 20% cut to the people who don't work and just collect passive income each year. That is the exact opposite of what is needed.
Ftr, big picture I do not believe we need any cuts at all right now if spending isn't going to be cut as all it means is we will all pay back these cuts plus a lot more with interest through a tax hike.
LINK
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Posted on 12/17/17 at 10:11 am to Tiger n Miami AU83
By the way, this should be noted as well:
Trump on the plan:
Now the analysis:
Trump has zero wage income. Probably upwards of 95% of his income is passthrough income which is getting (get this).... a bigger rate reduction than even the corporations under this tax bill! 14.6% reduction vs 14%.
Almost every dollar of trumps income is passthrough from his hundreds of partnership entities (pretty much all of his holdings are in partnerships that collect rents or brand/management fees).
Then there are the changes in the estate tax which doesn't really require explanation but obviously are Yuge for Trump.
Frankly, it is hard to imagine how a more favorable bill could be written for Trump. It is targeting 95% of his yearly income (at least) for the biggest cut in the entire bill. To say nothing of the estate tax benefits for him.
The above is factual. Call it anti Trump if you want, but he made the statement about it costing him a fortune and holy frick that could NOT be further from the truth. It's hard to imagine anyone in the entire country no matter how wealthy benefiting proportionally more than Trump under this bill. It literrally provides the biggest cut in the entire bill, bigger than the corporate cut to 95%+ of his actual imcome.
Trump on the plan:
quote:
This is going to cost me a fortune, this thing -- believe me. Believe me, this is not good for me."
Now the analysis:
Trump has zero wage income. Probably upwards of 95% of his income is passthrough income which is getting (get this).... a bigger rate reduction than even the corporations under this tax bill! 14.6% reduction vs 14%.
Almost every dollar of trumps income is passthrough from his hundreds of partnership entities (pretty much all of his holdings are in partnerships that collect rents or brand/management fees).
Then there are the changes in the estate tax which doesn't really require explanation but obviously are Yuge for Trump.
Frankly, it is hard to imagine how a more favorable bill could be written for Trump. It is targeting 95% of his yearly income (at least) for the biggest cut in the entire bill. To say nothing of the estate tax benefits for him.
The above is factual. Call it anti Trump if you want, but he made the statement about it costing him a fortune and holy frick that could NOT be further from the truth. It's hard to imagine anyone in the entire country no matter how wealthy benefiting proportionally more than Trump under this bill. It literrally provides the biggest cut in the entire bill, bigger than the corporate cut to 95%+ of his actual imcome.
Posted on 12/17/17 at 10:16 am to Tiger n Miami AU83
I am an old school fiscal conservative. Health care, tax cuts, and all the rest sound fine and dandy to me... just show me how you are going to pay for it.
Predictions that we will see 6-7% percent growth in the GDP every year for the next decade, that will, in turn, pay for the tax cuts seem far more optimistic then justified. Rosy forecasts are calling for 3% growth next year and most predictions are that we will average the next decade what we have averaged for the last 30 some odd years... 2.5% growth yearly.
Predictions that we will see 6-7% percent growth in the GDP every year for the next decade, that will, in turn, pay for the tax cuts seem far more optimistic then justified. Rosy forecasts are calling for 3% growth next year and most predictions are that we will average the next decade what we have averaged for the last 30 some odd years... 2.5% growth yearly.
Posted on 12/17/17 at 10:28 am to Arksulli
I agree.
IMO, we need modest cuts to entitlements and the military and end the bush tax cuts, reduced rates on cap gains, the earned income credit (no one who pays zero should EVER get a refund), enact a small toll charge on offshore earnings that have not been repatriated (maybe 7.5%), tighten some rules on deferral of offshore earnings (maybe expand Subpart F) and that is about it.
That would probably balance the budget immediately.
Instead this bill does the opposite with tax cuts that will do nothing for growth, and zero spending cuts. Frankly it is beyond retarded and everyone knows it, including each and every person in the house and Senate that will vote for it.
And again, us taxpayers will absolutely pay this back with interest with a larger tax increase than wage earners are getting now within a few years. Count on that.
IMO, we need modest cuts to entitlements and the military and end the bush tax cuts, reduced rates on cap gains, the earned income credit (no one who pays zero should EVER get a refund), enact a small toll charge on offshore earnings that have not been repatriated (maybe 7.5%), tighten some rules on deferral of offshore earnings (maybe expand Subpart F) and that is about it.
That would probably balance the budget immediately.
Instead this bill does the opposite with tax cuts that will do nothing for growth, and zero spending cuts. Frankly it is beyond retarded and everyone knows it, including each and every person in the house and Senate that will vote for it.
And again, us taxpayers will absolutely pay this back with interest with a larger tax increase than wage earners are getting now within a few years. Count on that.
Posted on 12/17/17 at 11:14 am to Tiger n Miami AU83
quote:
As a candidate, I promised we would pass a massive TAX CUT for the everyday working American families who are the backbone and the heartbeat of our country. Now, we are just days away...
Trump a few minutes ago.
It's not like he is even trying. It's just like he is pissing in all of our faces and doesn't care. The cut for him is truly massive. For the rest of us "everyday working American families" it's an irrelevant 1% on average.
Posted on 12/17/17 at 11:15 am to Tiger n Miami AU83
The military does need money but its not currently able to spend the money on the things that it really wants and needs. After 15 years of fighting bush wars on the cheap (the surest way to increase the cost) the military has been borrowing from Peter to pay Paul. Which means that a lot of things the military does need have gone neglected.
Unfortunately those are the things that the Congress isn't spending money on. People will laugh at the idea that the military desperately needs funds for improving base housing, day care centers, and things of that nature. Which is short sighted.
Every member of the military costs a great deal of money to recruit, train, and equip. Therefore it is in the services best interests to make sure that once they have the personnel trained they keep them. If they can have a much higher quality of life outside the military its not going to be easy. And every service person who doesn't reenlist has to be replaced with someone that you have to spend time and money on.
We could have a small increase in quality of life programs while still shaving substantial money off the overall military budget by axing things the military doesn't want or need. We spend close to 200 million a year buying tanks for the Army and Marine Corps that they don't need and keep asking Congress to stop making them buy. Billions are spent on plane purchases that the Air Force seems fairly meh on having. The Navy has more ships then they know what to do with.
But all of those are big ticket items that bring in a lot of money to the areas that manufacture them. Its too toxic for a politician to consider cutting because of the people that would be put out of work.
Modest cuts to the military budget and the suggestions that you put forward would do wonders towards balancing the budget.
Unfortunately those are the things that the Congress isn't spending money on. People will laugh at the idea that the military desperately needs funds for improving base housing, day care centers, and things of that nature. Which is short sighted.
Every member of the military costs a great deal of money to recruit, train, and equip. Therefore it is in the services best interests to make sure that once they have the personnel trained they keep them. If they can have a much higher quality of life outside the military its not going to be easy. And every service person who doesn't reenlist has to be replaced with someone that you have to spend time and money on.
We could have a small increase in quality of life programs while still shaving substantial money off the overall military budget by axing things the military doesn't want or need. We spend close to 200 million a year buying tanks for the Army and Marine Corps that they don't need and keep asking Congress to stop making them buy. Billions are spent on plane purchases that the Air Force seems fairly meh on having. The Navy has more ships then they know what to do with.
But all of those are big ticket items that bring in a lot of money to the areas that manufacture them. Its too toxic for a politician to consider cutting because of the people that would be put out of work.
Modest cuts to the military budget and the suggestions that you put forward would do wonders towards balancing the budget.
Posted on 12/17/17 at 12:10 pm to Tiger n Miami AU83
quote:
For the rest of us "everyday working American families" it's an irrelevant 1% on average.
How is this possible? It doubles the standard deduction which almost 70% of Americans file.
Posted on 12/17/17 at 12:22 pm to TomRollTideRitter
It eliminates personal and dependent exemptions as well which 100% of Americans got before the bill. If you have no kids the doubled standard deduction helps a bit as you only lose $2100 in the personal exemption. If you have a couple of kids it's a wash with the doubled standard deduction. Also, loss of state income tax deductions.
Anyway, everyone's situation is different, most will get a 1-2% tax cut. Others will pay a tiny bit more. At least that is the bottom line for the middle class.
And again the middle class will pay it back with interest in a few years anyway.
Anyway, everyone's situation is different, most will get a 1-2% tax cut. Others will pay a tiny bit more. At least that is the bottom line for the middle class.
And again the middle class will pay it back with interest in a few years anyway.
This post was edited on 12/17/17 at 12:23 pm
Posted on 12/17/17 at 12:35 pm to Tiger n Miami AU83
Let me be clear. I'm not arguing for or against the tax plan, but saying 1-2% is irrelevant is silly.
Using the NYT calculator, if you're married with one child and making 25 to 75k, you're getting about a $970 cut. That's a decent bit of spending money, particularly if you're closer to the low end income wise.
Using the NYT calculator, if you're married with one child and making 25 to 75k, you're getting about a $970 cut. That's a decent bit of spending money, particularly if you're closer to the low end income wise.
This post was edited on 12/17/17 at 12:36 pm
Posted on 12/17/17 at 12:42 pm to Tiger n Miami AU83
quote:
people who don't work and just collect passive income each year
found your shtick.
Posted on 12/17/17 at 1:03 pm to Tiger n Miami AU83
It saves me about 2.6%.
I don't know why anyone is minimizing that effect. That is a lot of money.
I don't know why anyone is minimizing that effect. That is a lot of money.
Posted on 12/17/17 at 1:37 pm to Tiger n Miami AU83
quote:
If you have a couple of kids it's a wash with the doubled standard deduction.
Except that two child family will receive an additional $2000 from the increased child tax credit. There is almost no middle class family who will not benefit from this.
quote:
Also, loss of state income tax deductions.
Which is not really relevant to the middle class, as very few in the middle class are able to itemize under the current system.
Posted on 12/17/17 at 1:39 pm to Tiguar
Yeah, it is about 2% for individuals. About 14% for corporations, and about 15% for passive income which is primarily wealthy.
I personally do not like or appreciate that for the reasons already stated.
It's bad for the economy. It is disproportionately targeted to the wealthy. It will result in an even larger tax hike within a few years (probably in 2 years is my guess), and all of the individual tax cuts are temporary while the corporate and wealthy cuts (pass through income are permanent).
It's a joke.
I personally do not like or appreciate that for the reasons already stated.
It's bad for the economy. It is disproportionately targeted to the wealthy. It will result in an even larger tax hike within a few years (probably in 2 years is my guess), and all of the individual tax cuts are temporary while the corporate and wealthy cuts (pass through income are permanent).
It's a joke.
Posted on 12/17/17 at 1:41 pm to Evolved Simian
quote:
Which is not really relevant to the middle class, as very few in the middle class are able to itemize under the current system.
Most home owners with a mortgage itemize
quote:
Except that two child family will receive an additional $2000 from the increased child tax credit.
So you support people having more kids they can't afford. Nice
Posted on 12/17/17 at 2:36 pm to Tiger n Miami AU83
quote:
So you support people having more kids they can't afford. Nice
Who says they can't afford them?
Those with no income don't get the credit, and it can't be more than a working person's tax liability.
quote:
Most home owners with a mortgage itemize
For their state returns, yes. Most middle class homeowners do not report enough in interest to itemize at the federal level.
Posted on 12/17/17 at 2:43 pm to Evolved Simian
Well, for the sake of a good faith discussion, if you support it I will ask why?
Again, not to enter into a poliboard pissing contest of cuck, melt, etc but for legit discussion.
Again, not to enter into a poliboard pissing contest of cuck, melt, etc but for legit discussion.
Posted on 12/17/17 at 3:52 pm to Tiger n Miami AU83
This is interesting too. Last minute provision that just got stuck into the bill, too late to be debated or discussed:
In summary this provision allows a 20% reduction on rental real estate pass through income (basically 100% of trumps real estate holdings are held by pass throughs).
So on top of the largest tax cut in the bill, larger than the corporate tax cut, they just stuck in an extra 20% deduction on rental pass through income ON TOP of the 14.9% rate deduction on all pass through income.
Link to International Business Times.
LINK
quote:
President Donald Trump has made tens of millions of dollars of a specific kind of income that could be subjected to a last-minute tax break inserted into the Republicans’ tax legislation released Friday, according to federal records reviewed by International Business Times. The same is true for Tennessee GOP Sen. Bob Corker — a commercial real estate mogul who suddenly switched his vote to “yes” on the tax bill after the provision was added to the legislation. Previously, Corker was the only Republican to vote against the Senate version of the bill.
In summary this provision allows a 20% reduction on rental real estate pass through income (basically 100% of trumps real estate holdings are held by pass throughs).
So on top of the largest tax cut in the bill, larger than the corporate tax cut, they just stuck in an extra 20% deduction on rental pass through income ON TOP of the 14.9% rate deduction on all pass through income.
Link to International Business Times.
LINK
Posted on 12/17/17 at 3:56 pm to Tiger n Miami AU83
Income tax cuts across all tax brackets are preferable. That helps everyone. As you stated in the op, this tax bill only benefits the super rich and it will destroy the national debt and skyrocket the budget deficit, and make income inequality even worse. All are already at disgusting levels.
I have no problem with a corporate tax rate cut, but that is meaningless unless you close the tax loopholes. Corporations, especially large ones are not going to pay anything if they can legally get away with paying practically nothing.
Having said all of this, even if you closed tax loopholes and cut income taxes, you still have to pay for it. How do you do that without decimating the middle class, which is what Republicans have been doing since the Reagan administration.
As for Trump, he is the least believable twat on the planet.
I have no problem with a corporate tax rate cut, but that is meaningless unless you close the tax loopholes. Corporations, especially large ones are not going to pay anything if they can legally get away with paying practically nothing.
Having said all of this, even if you closed tax loopholes and cut income taxes, you still have to pay for it. How do you do that without decimating the middle class, which is what Republicans have been doing since the Reagan administration.
As for Trump, he is the least believable twat on the planet.
This post was edited on 12/17/17 at 3:57 pm
Posted on 12/17/17 at 3:57 pm to Tiger n Miami AU83
quote:
The reconciled tax bill includes a new 20 percent deduction for so-called “pass-through” entities, business structures such as LLCs, LPs and S-Corporations that don’t pay corporate taxes, but instead “pass through” income to partners who pay individual tax rates on that money. The Senate version of the bill included safeguards that would only allow businesses to take advantage of the new break if they paid out significant wages to employees. But the new provision, which wasn’t included in either version of the bill passed by the House and Senate, and was only added during the reconciliation process, gives owners of income-producing real estate holdings a way around that safeguard, effectively creating a new tax break for large landlords and real estate moguls.
quote:
Because the new language wasn’t in the bills passed by the House and Senate, Democrats cannot offer a floor amendment to eliminate the provision, which experts say would reduce the amount of money that Trump, Corker and other wealthy lawmakers owe to the IRS on their real-estate-related pass-through income.
quote:
Writing a tax bill that puts the very wealthy and special interests before working families was bad enough – but to slip in a last minute provision that could give even more of a windfall to people like President Trump and some Republicans in Congress is unconscionable,” Van Hollen told IBT.
quote:
Trump disclosed that he earned between $41 million and $68 million of rental income from 25 pass-through LLCs and LPs — most of which are invested in real estate. Those properties are collectively worth between $527 million and $704 million, according to the documents. Trump’s senior adviser and son-in-law Jared Kushner also lists dozens of income-generating real estate pass-through entities on his financial disclosures.
This post was edited on 12/17/17 at 3:59 pm
Posted on 12/17/17 at 5:02 pm to Tiger n Miami AU83
quote:
Bottom line is he shows how the current tax plan benefits the wealthy in a disprotionate manner.
The top 1% pay 51.6% of all income taxes. People making over 100,000 pay 79.4% of all income taxes...
But yeah let’s look at one guys tax return
quote:
which would actually help most people,
This plan does help most people
This post was edited on 12/17/17 at 5:09 pm
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