Elimination of personal exemption in Trump tax plan spells doom for families

The GOP advertises the doubling of standard deductions as a boon for tax payers.

However, the GOP fails to mention that the personal exemption of $4,050 will be eliminated.

This means that singles will just barely get ahead: $12,000 new deduction vs. $10,400 previous standard deduction + personal exemption.

Now, for families, say a typical family with 2 children:

Previous: $28,900 standard deduction + personal exemption.
Trump: $24,000

Taxable income has increased by $4,900.

This is partially offset by the $300 increase in child credit.

Now, add to that the increased 12% tax rate vs. the previous 10% lowest bracket and it looks like the average family won't get ahead.

Now, if you have the double whammy of living in a blue state, you also get double taxed on state income tax, the deduction of which you lose.

Why does Trump want to penalize the average hard working family?

But, the estate tax is repealed, yippeee!!!!

 

Seems like everyone is tired talking about taxes. I just find it amazing that the loss of the personal exemptions is not mentioned, when this is a big deal for middle class families.

 

The standard deduction for a married couple in 2016 was $12,600. Personal exemption for 2 people was $8100. Total = $20,700

If we get a standard deduction of $24,000 we'll be money ahead!

I suspect the legislation will be revised to not penalize families with children before it is finalized.

 

2+ children and you would be way behind. Didn't the GOP pride itself as the party of families?

In any case, I wouldn't count on this issue being rectified. My impression is that this legislation, together with health care proposals, is designed to benefit the Trump core constituency: Males in red states. The hope is to benefit young , single males in red states, so they get hooked to voting GOP when the get older and have families.

Of course, benefiting the rich is a given.

The second issue that is virtually not discussed: The cut of $1.5 trillion in Medicare and Medicaid. My guess: It will be the middle class again who pays for it in reduced benefits.

The GOP may be able to pull the wool over people's eyes to get this atrocious tax bill passed. When people eventually realize the truth when looking at their paychecks/benefits, they'll kick the GOP/Trump cabal out.

 

Yeah, looks like it really "spells doom for families." Ever think about making policy claims in an honest, straightforward way? Nah.

Will be waiting to see what actually ends up in the tax reform bill before commenting further on it, or especially talking about anyone's "doom" as a result of it.

 

NOpe the current lowest tax rate is zero in the Trump plan I don't yet know what the Rep establishment has trotted out.

 

What about single parents that earn under $45k getting a tax increase.

Donald Trump's Tax Plan Would Hit Single Parents Hard.
https://www.forbes.com/sites/beltwa...n-would-hit-single-parents-hard/#76e519d359ab

 

Citation?

All I have seen that the lowest rate has been raised from 10% to 12%, after standard deductions.

It is good to see, though, that you admit that nobody knows nothing as to who will benefit and who will be penalized. I guess we have to pass it first to see what's in it.

 

NO you have to see the bill they are voting on first. There is almost certainlygoing to be a dozen or more changes between now and the final vote. https://www.scribd.com/document/360061522/Republican-Tax-Plan

 

I thought ta reform was going to simplify the tax code.

That's simple?

 

Hi tax States could let you deduct your federal tax solves that problem.

 

The 12% bracket applies up to $90k for couples filing joinly. The 10% applies to the first $18650.

Try making an honest comparison son.

 

Why should people get a deduction for having children? If you want children, make sure you can afford them. Why should I be subsidizing that decision?

 

The median household income is $59,000. For those with 2+ children below the median, that means they never exceed the 15% bracket. Their taxable income for 2 children family before was roughly $30,000. So, they pay 2% more for the first $18650, but 3% less for the remaining $11,350. How is that going to hep them? For 3 and more children it becomes worse.

I just think it is borderline lying to advertise the increase in standard deduction as a boon, while sweeping the loss of personal exemption under the rug, nothing to see here folks. Average people will be surprised how little they will gain, or often even lose.

What they WILL notice, though, will be the benefit cuts to Medicare ad Medicaid, to "balance" the budget on their backs. And the deficit will still double.

 

Because these children will be eventually paying for your retirement.

 

This is just reshuffling the deck chairs, no simplification. Of course, they have to make it confusing so nobody knows how it will affect them. The creators of this bill, however, know exactly who will be helped: The rich donor class, who help them get elected.

 

So we should encourage people to have kids they can't afford without govt handouts?

 

Never said that people should have kids they can't afford. That doesn't mean there shouldn't be incentives for responsible parents to have kids.

We see on the example of Japan what the consequences of an aging and shrinking society are.

 

I should get trhe same inventive for not having kids that I don't want then. Eliminate the child deduction and just add it to the standard deduction so everyone gets it.


And if that deduction is the reason you choose to have kids, you shouldn't be having kids.

 

It's actually a child credit.

BTW: The cost of raising a kid to age 17 is about $233,000. I am glad that you are "saving" that money or spending it, instead of contributing to society, so that we don't get into a deflationary spiral caused by too many old people who don't spend and can't be sustained by the lack of children, or MY kids can contribute in THEIR SS payment for YOUR behind when you sit in the nursing home unable to care for yourself. Think it won't happen? Think again.

 

Hmm...that's interesting. I hadn't heard that yet.

 

Call it whatever you want. It's still a govt handout.

And right back to.the typical alt left tactic of personal attacks when common sense fails on the olther side of the argument.

If anyone is a drain on society it's you. You offer nothing to society but tax payer subsidized offspring and claim the moral superiority.

 

Common sense is that a society with more deaths than births (less children) is a dying society. If everybody would be like your type, that's what we would have.

 

We are talking about a generation that was a statistal outlier though. We were always going to see more deaths than births as that generation dies off.

Combine that with urban families being much smaller than rural ones and the influx of people to industrial jobs in urban areas and away from the rural areas post WW2 and it creates perfect storm for lower birth rates.

 

I would have liked us to raise taxes on everyone and cut all discretionary spending and slash the military and medicare by what ever it took the balance the budget. Then if someone want more military of more medicare or what ever they would have to also provide an equal tax increase to pay for it. Almost like we had to follow a budget or something.