Ron Wackowski: Who’s been naughty or nice according to the new tax bill
December 21, 2017
Republicans in Congress have finished their rushed, last-minute compromise tax bill, and the President is set to give Americans a "big, beautiful tax cut" for a Christmas present. Unfortunately, just like Santa's list, it's obvious that some folks have been naughty and some have been nice, according to a summary from NPR.
The following compares tax rates by taxable income for married couples filing jointly:
- Taxable income less than approximately $19,000 – tax rate is the same. Granted, these folks see lower taxes because they likely don't itemize and the standard deduction goes up.
- Between $19,000 and $150,000 – tax rate goes down by 3 percent.
- Between $150,000 and $230,000 – tax rate goes down by 4 percent.
- Between $230,000 and $315,000 – tax rate goes down by 9 percent.
- Between $470,000 and $600,000 – tax rate goes down by 4.6 percent.
It's the thought that counts, so don't compare gift values. However, if Santa didn't treat you as well as others, don't worry; this is all set to expire in 2026 so it's nearly a certainty there will be another tax reform season in the future.
Corporations have been very good. The corporate tax rate goes from 35 percent to 21 percent. Plus, these cuts are extra nice – they are permanent.
Workers' gifts won't arrive in time for the holidays, unfortunately. The President, our Secretary of the Treasury and Congressional Republicans are confident it will come in the form of higher future wages. Let's keep wishing.
Real estate developers — like Senator Corker and our President — have also been very good this year based on some new criteria? They get to deduct 20 percent of the income from "pass-through entities," but it was capped at half of what they paid their employees. To help them with this pesky point, they got a last-minute addition to the tax bill, according to Forbes magazine, that lets them deduct 2.5 percent of the value of their assets … a really good thing for people you know who own valuable buildings.
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If you're a senior who likes surprise gifts, like my 90-year-old mother, you're covered. If the deficit rises too much, AARP points out that automatic cuts to Medicare, etc. may very well occur. This may happen by year end. Not a gift you wanted, Mom? Sorry … even though you paid into this benefit for decades, others obviously were nicer and more deserving.
And lastly, for you young and healthy citizens out there, you won't be penalized for not buying health insurance. I wish you a healthy new year. However, just like figuring out how to care for that Saint Bernard puppy you wanted for Christmas, you will have to figure out how to make our nation's future financial ends meet. With uncertainty in the future tax regime, as the Wall Street Journal points out, possible expiring tax provisions and potential increases in the deficit, this tax bill may very well be the proverbial "gift that keeps on giving."
This was really meant to simplify taxes, however. The standard deduction is higher, but the exemption for children is eliminated. Oh, but the child tax credit is higher. And, so…. umm … a couple with two kids may or may not be better off, according to NPR. But, it's simpler … I think. Will we still do our taxes on a postcard as Congressman Tipton touted? Apparently not.
Be sure to send thank you notes to Congressman Tipton and Senator Gardner, or tell them in person if you ever get a chance. Better yet, send your message through the ballot box. That's the only message they will understand.