5 ms·

This page has some good examples: https://taxfoundation.org/final-tax-cuts-and-jobs-act-taxpayer-impacts/ https://taxfoundation.org/final-tax-cuts-and-jobs-act

This page has some good examples: https://taxfoundation.org/final-tax-cuts-and-jobs-act-taxpayer-impacts/ https://taxfoundation.org/final-tax-cuts-and-jobs-act-taxpay... $30k income, single, no kids. $52k income, single, 2 kids. $75k income, single, no kids. $85k income, married, 2 kids. $165k income, married, 2 kids. ... That's the kind of stuff people are looking for, right? The $165k entry is two earners - all of these are fairly realistic examples. Those of you that think that something is missing from these examples - what do you think is missing? I mean, the low income earners even see a break. $30k income, single, no kids, and living in California goes from a federal tax bill of $2426 to $1970. (according to http://taxplancalculator.com/ http://taxplancalculator.com/ )

eropple 9y ago
They see a break, but it isn't a structurally meaningful one. $500 is certainly short-term beneficial when you are making $30K--it is not enough, by at least an order of magnitude, to create long-term benefits, even if the knock-on effect of those tax cuts was not to ensure that the person making $30K a year ends up spending more than that $500 poorly replicating the government services that will be cut to pay for the top end of it. Even setting aside all that, that these tax cuts are functionally useless except as a transfer of wealth to monied interests, they expire in ten years besides. It's a more complex problem than what a calculator can really express without losing the ability to give a Nice Shiny Number out the other end.
- sjg007 9y ago
  This is a good point. Basically the 30k earner could get better services targeted to their situation than getting an extra $500 tax break.
  - eropple 9y ago
    Could and, in other countries, do. Economies of scale are a thing.
jedberg 9y ago
Most everyone will get a break. There is a weird crunch for people making between $200K and $400K in a high tax state like CA or NY who will come out behind due to the loss of deduction on their property tax and state tax, and since they live in CA or NY, are probably barely middle class at those wages. The bigger issue is that, for example, the Walton family alone will get 5% of the 1.5 trillion dollar tax break. The Trump family will get a huge break too. It's unlikely that the Walton family or the Trump family will suddenly start making a ton of economic activity because of their windfalls, but in the meantime government revenue is down, which means they have to start cutting services. So most of the tax breaks for the lower earners will be eaten up over the next few years in paying for things the government used to subsidize for them.
- reaperducer 9y ago
  > Most everyone will get a break No, that can't be right. I saw that only the five richest people in America with solid gold toilets are getting a tax break, and that everyone else is going to be fed into a wood chipper. It was on TV, so it must be true.
- betterunix2 9y ago
  I live in NJ, another state where the $200k-$400k will be hurt. Believe me, that is solidly middle class, even when a 1BR rents for $3k/month. The real problem with these "tax breaks" is that the most significant breaks are highly specific and selective. This tax bill basically picks winners and losers. Worse still, the winners tend to be people with the kind of investments and lifestyle that Republican lawmakers have (e.g. the Corker kickback), and the losers tend to be professionals living in Democrat-leaning states (e.g. tech workers). The relatively small breaks that the majority will receive are temporary, and represent a minefield of exceptions that can leave people with no break at all (e.g. the loss of exemptions). There is a reason Republicans are picking oddly specific examples of people the bill will benefit -- most people will not see much, which is not a very compelling story.
  - smacktoward 9y ago
    > I live in NJ, another state where the $200k-$400k will be hurt. Believe me, that is solidly middle class The median household in New Jersey in 2016 had an income of $76,212. (Source: https://www.census.gov/data-tools/demo/saipe/saipe.html?s_appName=saipe&map_yearSelector=2016&map_geoSelector=mhi_c&s_state=34&s_measures=mhi_snc&menu=grid_proxy https://www.census.gov/data-tools/demo/saipe/saipe.html?s_ap...) In the highest-income county in New Jersey, Hunterdon County, the median household in 2016 had an income of $113,336. You may wish to adjust your definition of “solidly middle class” a bit.
betterunix2 9y ago
"what do you think is missing?" How about someone making $75k/yr. who itemizes deductions, because they live in a high-property-tax state? Or someone making $75k/yr. who has 5 kids and receives an exemption for all of them under the current code? We could go on all day coming up with scenarios that are missing from tables like these, some which represent winners, some which represent losers (somehow, that table seems to have no losers...). There are bigger issues with the bill. There are a bunch of hidden traps for the middle class that people are just beginning to understand. Already there are concerns about the new provision allowing 529 plans to be used for private elementary schools, and the way that will create incentives that hurt the middle class while benefiting the wealthy. The bill also picks winners and losers by allowing some professions to use pass-through corporations to reduce their income tax burden, but not others (architects and engineers, but not software developers).
ac29 9y ago
> The $165k entry is two earners - all of these are fairly realistic examples. $165k houshold income puts them barely outside the top 10% of households, though [0]. Its not unrealistic, per se (its not the top 1%, for example), but ~90% of households make less than that, so its not particularly useful, either. [0] https://dqydj.com/united-states-household-income-brackets-percentiles/ https://dqydj.com/united-states-household-income-brackets-pe...
- betterunix2 9y ago
  The thing is, the top-10%-but-not-1% band gets hit the hardest with taxes. You are not living on tax-advantaged income from your investments (i.e. you are still working for your money), but you are in a fairly high tax bracket (you could be paying more than 40%, maybe even more than 50% of your income in taxes). That is the income band with the highest marginal tax rate (i.e. the tax rate per extra dollar of income).

eropple 9y ago

They see a break, but it isn't a structurally meaningful one. $500 is certainly short-term beneficial when you are making $30K--it is not enough, by at least an order of magnitude, to create long-term benefits, even if the knock-on effect of those tax cuts was not to ensure that the person making $30K a year ends up spending more than that $500 poorly replicating the government services that will be cut to pay for the top end of it. Even setting aside all that, that these tax cuts are functionally useless except as a transfer of wealth to monied interests, they expire in ten years besides. It's a more complex problem than what a calculator can really express without losing the ability to give a Nice Shiny Number out the other end.

sjg007 9y ago
This is a good point. Basically the 30k earner could get better services targeted to their situation than getting an extra $500 tax break.
- eropple 9y ago
  Could and, in other countries, do. Economies of scale are a thing.

jedberg 9y ago

Most everyone will get a break. There is a weird crunch for people making between $200K and $400K in a high tax state like CA or NY who will come out behind due to the loss of deduction on their property tax and state tax, and since they live in CA or NY, are probably barely middle class at those wages. The bigger issue is that, for example, the Walton family alone will get 5% of the 1.5 trillion dollar tax break. The Trump family will get a huge break too. It's unlikely that the Walton family or the Trump family will suddenly start making a ton of economic activity because of their windfalls, but in the meantime government revenue is down, which means they have to start cutting services. So most of the tax breaks for the lower earners will be eaten up over the next few years in paying for things the government used to subsidize for them.

reaperducer 9y ago
> Most everyone will get a break No, that can't be right. I saw that only the five richest people in America with solid gold toilets are getting a tax break, and that everyone else is going to be fed into a wood chipper. It was on TV, so it must be true.
betterunix2 9y ago
I live in NJ, another state where the $200k-$400k will be hurt. Believe me, that is solidly middle class, even when a 1BR rents for $3k/month. The real problem with these "tax breaks" is that the most significant breaks are highly specific and selective. This tax bill basically picks winners and losers. Worse still, the winners tend to be people with the kind of investments and lifestyle that Republican lawmakers have (e.g. the Corker kickback), and the losers tend to be professionals living in Democrat-leaning states (e.g. tech workers). The relatively small breaks that the majority will receive are temporary, and represent a minefield of exceptions that can leave people with no break at all (e.g. the loss of exemptions). There is a reason Republicans are picking oddly specific examples of people the bill will benefit -- most people will not see much, which is not a very compelling story.
- smacktoward 9y ago
  > I live in NJ, another state where the $200k-$400k will be hurt. Believe me, that is solidly middle class The median household in New Jersey in 2016 had an income of $76,212. (Source: https://www.census.gov/data-tools/demo/saipe/saipe.html?s_appName=saipe&map_yearSelector=2016&map_geoSelector=mhi_c&s_state=34&s_measures=mhi_snc&menu=grid_proxy https://www.census.gov/data-tools/demo/saipe/saipe.html?s_ap...) In the highest-income county in New Jersey, Hunterdon County, the median household in 2016 had an income of $113,336. You may wish to adjust your definition of “solidly middle class” a bit.

betterunix2 9y ago

"what do you think is missing?" How about someone making $75k/yr. who itemizes deductions, because they live in a high-property-tax state? Or someone making $75k/yr. who has 5 kids and receives an exemption for all of them under the current code? We could go on all day coming up with scenarios that are missing from tables like these, some which represent winners, some which represent losers (somehow, that table seems to have no losers...). There are bigger issues with the bill. There are a bunch of hidden traps for the middle class that people are just beginning to understand. Already there are concerns about the new provision allowing 529 plans to be used for private elementary schools, and the way that will create incentives that hurt the middle class while benefiting the wealthy. The bill also picks winners and losers by allowing some professions to use pass-through corporations to reduce their income tax burden, but not others (architects and engineers, but not software developers).

ac29 9y ago

> The $165k entry is two earners - all of these are fairly realistic examples. $165k houshold income puts them barely outside the top 10% of households, though [0]. Its not unrealistic, per se (its not the top 1%, for example), but ~90% of households make less than that, so its not particularly useful, either. [0] https://dqydj.com/united-states-household-income-brackets-percentiles/ https://dqydj.com/united-states-household-income-brackets-pe...

betterunix2 9y ago
The thing is, the top-10%-but-not-1% band gets hit the hardest with taxes. You are not living on tax-advantaged income from your investments (i.e. you are still working for your money), but you are in a fairly high tax bracket (you could be paying more than 40%, maybe even more than 50% of your income in taxes). That is the income band with the highest marginal tax rate (i.e. the tax rate per extra dollar of income).