4 ms·

It depends if you're in a state with high state taxes, for one. You can't deduct those. In those same states many mortgages are over 500k, as that's the price

It depends if you're in a state with high state taxes, for one. You can't deduct those. In those same states many mortgages are over 500k, as that's the price of a studio apartment in cities, where many engineers live, and most of us don't live in studios. A good question is, will independent contractors flourish?

bogomipz 9y ago
>"A good question is, will independent contractors flourish?" Can you elaborate on this? How would the proposed tax regime be more attractive to contracting?
- awinder 9y ago
  Pass through and corporate rates are going to drop dramatically. Independent contractors can set up their income as business profit and pay much smaller amount of taxes at higher levels of income.
  - mancerayder 9y ago
    Will this be retroactive through 2017? For me it might be a wash. My state and local taxes (state and city tax) are almost 10% combined, and that's no longer deductible. My > 500k mortgage had a big interest deduction yearly, which won't exist. But I'm paid through a pass-through LLC, which will have a big savings. And it's no longer incentivizing to be an owner-occupier due to the mortgage interest deduction disappearance plus the cap gains exclusion (first 250,000 / 500,000 if married exclusion on sales profit of a property if you've lived in it 2 years, moving up to I believe 5). It's crazy. It's like the financial incentives are geared towards rentier classes (since I might as well rent my place out and perhaps even put it in its own LLC), self-employed temps, and away from people with student debt, medical expenses, mortgage debt, etc. etc.
    - deleted 9y ago
      [deleted]
    - awinder 9y ago
      No this will apply to the 2018 tax year so 2017 is going to be under the existing tax structure. Thank god, because otherwise mass craziness would have broken out from people setting up withholdings under a false tax structure. I agree with this being geared towards rentier class but those markets are also likely to see upset in pricing due to loss of tax savings. So at the end of the day we might all be at a loss — except for people who make out on the estate tax and corp tax rate drops. Aka rich people and corporations.
dashundchen 9y ago
If we take the extreme example of Kansas, which eliminated income tax on pass through entities, we'll see wealthy households structure their income through these entities as part of their tax planning. This did not grow the economy as expected and absolutely cratered the Kansas State budget and the ability for the state to provide services. Kansas undid these tax cuts this year. https://taxfoundation.org/kansas-pass-through-carve-out-national-perspective https://taxfoundation.org/kansas-pass-through-carve-out-nati...

bogomipz 9y ago

>"A good question is, will independent contractors flourish?" Can you elaborate on this? How would the proposed tax regime be more attractive to contracting?

awinder 9y ago
Pass through and corporate rates are going to drop dramatically. Independent contractors can set up their income as business profit and pay much smaller amount of taxes at higher levels of income.
- mancerayder 9y ago
  Will this be retroactive through 2017? For me it might be a wash. My state and local taxes (state and city tax) are almost 10% combined, and that's no longer deductible. My > 500k mortgage had a big interest deduction yearly, which won't exist. But I'm paid through a pass-through LLC, which will have a big savings. And it's no longer incentivizing to be an owner-occupier due to the mortgage interest deduction disappearance plus the cap gains exclusion (first 250,000 / 500,000 if married exclusion on sales profit of a property if you've lived in it 2 years, moving up to I believe 5). It's crazy. It's like the financial incentives are geared towards rentier classes (since I might as well rent my place out and perhaps even put it in its own LLC), self-employed temps, and away from people with student debt, medical expenses, mortgage debt, etc. etc.
  - deleted 9y ago
    [deleted]
  - awinder 9y ago
    No this will apply to the 2018 tax year so 2017 is going to be under the existing tax structure. Thank god, because otherwise mass craziness would have broken out from people setting up withholdings under a false tax structure. I agree with this being geared towards rentier class but those markets are also likely to see upset in pricing due to loss of tax savings. So at the end of the day we might all be at a loss — except for people who make out on the estate tax and corp tax rate drops. Aka rich people and corporations.

dashundchen 9y ago

If we take the extreme example of Kansas, which eliminated income tax on pass through entities, we'll see wealthy households structure their income through these entities as part of their tax planning. This did not grow the economy as expected and absolutely cratered the Kansas State budget and the ability for the state to provide services. Kansas undid these tax cuts this year. https://taxfoundation.org/kansas-pass-through-carve-out-national-perspective https://taxfoundation.org/kansas-pass-through-carve-out-nati...