Trumps Tax Plan- will you fair better or worse?

[Outdoorsygal]

Hypothetical question

An example of a single person working F/T-40 hrs a wk under today's tax plan vs Trumps new tax plan. https://howmuch.net/

Synopsis-Though already at poverty level wages, they will pay about 75% more taxes than before. Here's the math

$10 hr (Calif min wage) x 40 hrs week= $400
$400 x 52 wks per year=$20,800.00 per year (gross)

$20,800
-$6300 Standard deduction
-$4050 Personal Exemption
------------
$10,450

$10,450 x 10% tax bracket=$1045 per year or $87.08 per mo. In Federal Income Taxes.

Example again is a a single person working full time at minimum wage. They pay $87.08 per mo.


TRUMPS TAX PLAN
Same scenario

$20,800 per year (gross)
- $6300 Standard deduction
------------------------------
$14, 500.00 per yr

Trump got rid of the personal exemption
Trump increased the lowest tax bracket from 10% to 12%

$14,500 x 12% (lowest tax bracket)=$1740 per yr or $145 month

So those who work hard, at 40 hrs per week pay $87 a month but would NOW PAY $145 a month under Trump.
Their taxes were increased a little over 50% closer to 60%!!!!

Trump also feels the desire to repeal the ACA and replace it with Health Savings Accts yet he forgot the most important thing, ACTUALLY FUNDING THESE HSA's. Because the poorest workers cannot do so. And certainly cannot do so even further after he's tacked on paying 50%+ more tax burden upon them

The new tax brackets will save our family a little $$ but at the cost of societies most vulnerable.

.

[Singuy]

You sure the math is right? Thought trump was going to increase standard deduction to 15k/person while getting rid of personal exemption. Your math has it at $6,300 like before.

I believe only families with CHILDREN are getting hammered. Before you get the child tax credit PLUS their personal exemptions. Now they no longer qualify for personal exemptions as a dependent. Also only those who make money gets the deduction so your 1 yo will not qualify for the standard deduction of 15k/child.

[Singuy]

But to answer your question.

My family will probably get a tax reduction between 10-15k under trump's plan. I had to pay AMT last year and the medicare surtax.

Hey...my Maserati isn't going to fuel itself so bring on the tax breaks! (sarcasm).

[Outdoorsygal]

You sure the math is right? Thought trump was going to increase standard deduction to 15k/person while getting rid of personal exemption. Your math has it at $6,300 like before.

I believe only families with CHILDREN are getting hammered. Before you get the child tax credit PLUS their personal exemptions. Now they no longer qualify for personal exemptions as a dependent. Also only those who make money gets the deduction so your 1 yo will not qualify for the standard deduction of 15k/child.

Shucks I read 3 websites which said they same thing but all omitted the increased deduction. I knew someone smarter than myself would pop up thank you.

So for the lowest earner, they will benefit because right now $ 4050 personal exemption +$9300 deduction = $10,350 total deduction. Trump proposes a 15k so that's $4650 they would not be paying taxes on, which is $456.50.

$20,800 yearly income (min wage f/t)
-15,000 standard deduction
------------
$5800
$5800 x 12% taxes=$696.00 yr or $58 mo. in taxes per yr. Much better

[MakeAStash]

Since nothing has been ratified yet it's way too soon to worry about specifics. Some of Trump's ideas will be implemented, some won't, and there's no way yet to know which will be which.

[Outdoorsygal]

True^^.

Consider this with a grain of salt

https://www.donaldjtrump.com/policies/tax-plan

[Captain Save]

since nothing has been ratified yet it's way too soon to worry about specifics. Some of trump's ideas will be implemented, some won't, and there's no way yet to know which will be which.

bam!!!!!!!!

[bjl584]

He isn't even the President yet. Plus, he can't do anything without the approval of Congress. And you know that any tax bill he proposes will be modified and tweaked before it ever gets to his desk for a signature.

It's way too early to tell how things might play out.

[feh]

It's way too early to tell how things might play out.

Absolutely true. However, if something similar to what he was talking about on the campaign trail is implemented, it will be small changes for the middle class and poor, and a windfall for the top 2 tax brackets. In other words, more money for the 1%.

http://www.cnbc.com/2016/12/08/chart-shows-exactly-how-trumps-tax-plan-could-affect-you.html

[GoodSteward]

While I'm all for tax breaks, if the spending isn't cut down this will only hurt our future as a whole while giving a bit of a break in the short term to individuals.

The spending already outweighs our income, so reducing income is not a logical thing to do. It will make people happy, until major problems come up when the government doesn't have the funds to give away money anymore.

While I appreciate the refundable tax credits, and I know some families really need it, I've never liked the idea of people who make less getting thousands back effectively paying 0% tax, while those who only make a little more get nearly nothing back in credits so they actually pay in.

I still think a fair tax would make more sense.

[Petunia 100]

I still think a fair tax would make more sense.

That's the rub: how do we determine what is fair?

[TexasHusker]

I still think a fair tax would make more sense.

There is no appetite in Washington for a "fair" tax, nor will there ever be:

Tax policy is as much a tool to control the electorate as it is for providing for the public treasury.

[Singuy]

I believe when "fair tax" is used, it's not taxes that are more "fair", but it's the consumption tax model explained in the link I am providing.

https://en.wikipedia.org/wiki/FairTax

I think the fair tax model has its pros and cons. I don't think it's the magic bullet but who knows without an experiment. They should pilot this model in a state and let us know how well it works.

Transitioning our current tax system to fair tax sounds difficult and could crash the economy in the short term.

[GoodSteward]

How do the states do it without sales tax?

[greenskeeper]

Hypothetical question

I lost interest at that. Until we see actual figures it's anybody's guess.