7 ms·

My understanding is that as a professional couple, that is "service businesses", my wife and I are hit super-damn-hard by the new tax law. Apparently working f

My understanding is that as a professional couple, that is "service businesses", my wife and I are hit super-damn-hard by the new tax law. Apparently working for your income, rather than rent-seeking or capital investment, is something to be discouraged in the modern economy. Damned uppity folks that thought they could get an education, become professionals, and work their way to a better life than their forebears. Where do they think they are, America?

chrisbennet 9y ago
Well the money for the tax cuts for the rich has to come from somewhere...
goodoldboys 9y ago
Service businesses still get 20% deduction on business income up to a certain income threshold, which is pretty substantial (I think it's just under 400k). Have you talked to your accountant?
- Judson 9y ago
  For single filers, it's $157,500, with phase-outs $207,500. For joint filers, it's $315,000, with phase-outs to $415,000.
  - goodoldboys 9y ago
    thank you for the specific numbers, I feel like I should memorize them for every time this issue comes up...
nightski 9y ago
You may not get as large of cuts as others, but if you are paying more taxes than the previous year you have some very special circumstances or have a really bad accountant. I'll actually be seeing a significant reduction in taxes due to the 20% pass through benefit and doubled standard deduction.
- cryptonector 9y ago
  Or you live in a high-tax State and you easily exceed the $10k SALT deduction.
  - arkades 9y ago
    Which we really, really do.
    - xenadu02 9y ago
      Which was a deliberate "fuck you" by Republicans, attempting to enforce their ideal state tax policy through coercive taxation.
      - cryptonector 9y ago
        Well, I mean, it's not like Democrats don't do this sort of thing. It's politics. As someone once said, "elections have consequences", and surely should! And it's a question of fairness too. Should the federal tax code give high-tax State residents a break? Why should it? Or why should it not? These questions have reasonable answers, and reasonable people can disagree.
        dragonwriter 9y ago
        > Should the federal tax code give high-tax State residents a break? It's not a break, it's mathematically necessary to prevent federal taxation from artificially negating what would otherwise be beneficial social action. Without local tax deductibility, local tax funded programs have artificially reduced net local benefit, which impact is greater the higher the federal income tax rate which is paid by the payers of the state taxes. The result is that, absent full deductibility, there is an artificial incentive (given progressive federal income taxes) not only for lower state taxes and spending even where a tax-funded program would be economically efficient before federal taxation was taken into account, but also for less progressive state taxes than would otherwise be adopted.
      - 9y ago
nodesocket 9y ago
Serious question are you just making this up or trolling? Because nearly everybody should see a tax reduction? Are you structured as a pass-through LLC? Do you own a house and live in New York or Caifornia?
- hosh 9y ago
  There's a 20% deduction that can be taken for the pass-through income ... if the pass-through income is below a threshold: http://www.cpapracticeadvisor.com/news/12389903/2018-tax-reform-pass-through-income-deduction-more-complex-than-thought http://www.cpapracticeadvisor.com/news/12389903/2018-tax-ref... So for some earning beyond a certain income threshold, yeah, they will get taxed a lot more. Interestingly, I think I saw that engineering and architecture services are exempt.
- scarmig 9y ago
  Since when did "be a homeowner in NY or CA" become some maligned minority that deserves to be screwed to benefit rich folks?
  - nodesocket 9y ago
    Since living in the highest taxed states and then complaining about taxes... I moved from SF to Nashville TN, couldn't be happier.
    - rconti 9y ago
      People make decisions based on the available information, which does NOT included a looking glass. Imagine if your property taxes quintupled because it turns out your governor misallocated tax revenue and now they need to make up the shortfall. Well, serves you right for moving to TN, right? Wrong.
      - abfan1127 9y ago
        CA taxes haven't quintupled in the last year. Its always been high.
hkmurakami 9y ago
Aren't you helped by the loss of the marriage penalty?
gist 9y ago
> rather than rent-seeking Examples of the 'rent seeking' that you despise so much?
panarky 9y ago
> Apparently working for your income, rather than rent-seeking or capital investment, is something to be discouraged in the modern economy The tax code was already pretty regressive, with regular wage-earners paying Social Security and Medicare taxes on the first dollar they earn, while hedge fund guys pay a very small percentage of their income in taxes. The new tax "reform" now adds more carve-outs that specifically target people who work for their income. If your pass-through entity is for passive income like investments and real estate, the pass-through deduction is unlimited, and the hedge-fund "carried interest" loophole is preserved. But if your pass-through is for your own labor like consulting, you're penalized with the deduction phase-out stating at $157k for individuals and $315k for joint filers.
charlesdm 9y ago
Yes. Regardless of where you live, making money through capital gains instead of working for it is generally a lot more tax efficient.
unclebucknasty 9y ago
With you 100%. There's no economic justification for these arbitrary designations that pick winners-and-losers. The rationale for these deductions was grounded in the acknowledgment of real expenses that can affect one's ability to pay. And, also fairness: that is, not taxing people on taxes. These expenses don't just magically disappear because a political party decided to favor other groups and needed to pay for it. Don't understand how it's Constitutional either. For instance, it's no secret that regions with the highest SALTs tend to be Democratic strongholds. Picking winners and losers along those lines is outrageous.
unclebucknasty 9y ago
>Apparently working for your income, rather than rent-seeking or capital investment, is something to be discouraged in the modern economy. And, this. Just within the last week or so there was discussion here about income inequality. I didn't bother chiming in. The same folks that sit around scratching their heads about this "intractable" inequality problem will defend to the death the rationale behind tax policy that favors capital over labor, busting unions, and other forms of trickle-down economics.

chrisbennet 9y ago

Well the money for the tax cuts for the rich has to come from somewhere...

goodoldboys 9y ago

Service businesses still get 20% deduction on business income up to a certain income threshold, which is pretty substantial (I think it's just under 400k). Have you talked to your accountant?

Judson 9y ago
For single filers, it's $157,500, with phase-outs $207,500. For joint filers, it's $315,000, with phase-outs to $415,000.
- goodoldboys 9y ago
  thank you for the specific numbers, I feel like I should memorize them for every time this issue comes up...

nightski 9y ago

You may not get as large of cuts as others, but if you are paying more taxes than the previous year you have some very special circumstances or have a really bad accountant. I'll actually be seeing a significant reduction in taxes due to the 20% pass through benefit and doubled standard deduction.

cryptonector 9y ago
Or you live in a high-tax State and you easily exceed the $10k SALT deduction.
- arkades 9y ago
  Which we really, really do.
  - xenadu02 9y ago
    Which was a deliberate "fuck you" by Republicans, attempting to enforce their ideal state tax policy through coercive taxation.
    - cryptonector 9y ago
      Well, I mean, it's not like Democrats don't do this sort of thing. It's politics. As someone once said, "elections have consequences", and surely should! And it's a question of fairness too. Should the federal tax code give high-tax State residents a break? Why should it? Or why should it not? These questions have reasonable answers, and reasonable people can disagree.
      - dragonwriter 9y ago
        > Should the federal tax code give high-tax State residents a break? It's not a break, it's mathematically necessary to prevent federal taxation from artificially negating what would otherwise be beneficial social action. Without local tax deductibility, local tax funded programs have artificially reduced net local benefit, which impact is greater the higher the federal income tax rate which is paid by the payers of the state taxes. The result is that, absent full deductibility, there is an artificial incentive (given progressive federal income taxes) not only for lower state taxes and spending even where a tax-funded program would be economically efficient before federal taxation was taken into account, but also for less progressive state taxes than would otherwise be adopted.
    - 9y ago

nodesocket 9y ago

Serious question are you just making this up or trolling? Because nearly everybody should see a tax reduction? Are you structured as a pass-through LLC? Do you own a house and live in New York or Caifornia?

hosh 9y ago
There's a 20% deduction that can be taken for the pass-through income ... if the pass-through income is below a threshold: http://www.cpapracticeadvisor.com/news/12389903/2018-tax-reform-pass-through-income-deduction-more-complex-than-thought http://www.cpapracticeadvisor.com/news/12389903/2018-tax-ref... So for some earning beyond a certain income threshold, yeah, they will get taxed a lot more. Interestingly, I think I saw that engineering and architecture services are exempt.
scarmig 9y ago
Since when did "be a homeowner in NY or CA" become some maligned minority that deserves to be screwed to benefit rich folks?
- nodesocket 9y ago
  Since living in the highest taxed states and then complaining about taxes... I moved from SF to Nashville TN, couldn't be happier.
  - rconti 9y ago
    People make decisions based on the available information, which does NOT included a looking glass. Imagine if your property taxes quintupled because it turns out your governor misallocated tax revenue and now they need to make up the shortfall. Well, serves you right for moving to TN, right? Wrong.
    - abfan1127 9y ago
      CA taxes haven't quintupled in the last year. Its always been high.

hkmurakami 9y ago

Aren't you helped by the loss of the marriage penalty?

gist 9y ago

> rather than rent-seeking Examples of the 'rent seeking' that you despise so much?

panarky 9y ago

> Apparently working for your income, rather than rent-seeking or capital investment, is something to be discouraged in the modern economy The tax code was already pretty regressive, with regular wage-earners paying Social Security and Medicare taxes on the first dollar they earn, while hedge fund guys pay a very small percentage of their income in taxes. The new tax "reform" now adds more carve-outs that specifically target people who work for their income. If your pass-through entity is for passive income like investments and real estate, the pass-through deduction is unlimited, and the hedge-fund "carried interest" loophole is preserved. But if your pass-through is for your own labor like consulting, you're penalized with the deduction phase-out stating at $157k for individuals and $315k for joint filers.

charlesdm 9y ago

Yes. Regardless of where you live, making money through capital gains instead of working for it is generally a lot more tax efficient.

unclebucknasty 9y ago

With you 100%. There's no economic justification for these arbitrary designations that pick winners-and-losers. The rationale for these deductions was grounded in the acknowledgment of real expenses that can affect one's ability to pay. And, also fairness: that is, not taxing people on taxes. These expenses don't just magically disappear because a political party decided to favor other groups and needed to pay for it. Don't understand how it's Constitutional either. For instance, it's no secret that regions with the highest SALTs tend to be Democratic strongholds. Picking winners and losers along those lines is outrageous.

unclebucknasty 9y ago

>Apparently working for your income, rather than rent-seeking or capital investment, is something to be discouraged in the modern economy. And, this. Just within the last week or so there was discussion here about income inequality. I didn't bother chiming in. The same folks that sit around scratching their heads about this "intractable" inequality problem will defend to the death the rationale behind tax policy that favors capital over labor, busting unions, and other forms of trickle-down economics.