Re: Don't let Democrats raise middle class taxes! Keep this economy booming, vote in November!
Posted by:
the scenarios
()
Date: October 01, 2018 12:06AM
I call b.s Wrote:
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> Author Field Wrote:
> --------------------------------------------------
> -----
> > I am middle class. Donald Trump and the
> > Republicans raised my taxes to pay for his tax
> > cuts for the wealthy.
>
>
> How so? I don't see many scenarios where a middle
> class income would be paying more under the new
> tax changes.
There are a few scenarios where a household would wind up paying higher taxes.
1) The $10k SALT cap. This is a big one. A family of two income earners making $150k a year is still middle class, especially if daycare bill(s) are in play to make the second paycheck happen. So maybe around $8k in state income taxes here in Virginia. That means if your property taxes are around $5k (about a $500k house), then you've just lost a $3k deduction right there. That's probably about $810 to $1k in additional taxes on that point alone. The pain of course is way way higher in New York and New Jersey.
This also is made more painful if someone has a vacation home. Yes, middle class people do have them! If your property tax bill on one is say $3,000, and you've already hit your $10k SALT cap elsewhere, ouch!
2) Loss of dependent exemptions. It used to be, if you had a dependent in your household, you could deduct $4,050. This could include a child, elderly parent, etc... That's now gone. The child tax credit fills this hole a bit with a doubled amount to $2k and a higher applicability cap, but the credit only goes to age 16. Have two college aged kids? You just lost a $8,100 exemption. There's a $500 dependent credit for non-children, but if you're in the 22% tax bracket, you're trading an effective $891 savings via exception for a $500 credit. Two dependent college kids, that's about $782 in additional taxes.
3) Moving for a new job. You used to be able to deduct that expense, which can easily be a couple thousand dollars (packing materials, truck rental, motel stays, gasoline). That deduction is history.
Overall the tax rates slid a little lower, and most individuals do see some tax savings. But there are plenty of middle class people, especially in states with high SALT amounts, that will be paying more.
But if you're in a low tax state, are married, and don't own your house, lower rates and a much higher standard deduction probably has done you a solid. At least until the bill comes due on the national debt.