Tax Bill for Individuals

[Section112]

Because there has been lots of talk about this, I thought i would post the best summary I have seen so far about the effects of the new tax bill on Individuals. Hope this is helpful in summarizing this bill for you:
https://www.journalofaccountancy.co...cpald&utm_medium=email&utm_campaign=18Dec2017

 

[Merge]

Thanks for posting.

 

[HALL85]

Yes, thanks for posting. Nice factual summary.

Won't know the complete impact for a few years. I was hoping for way more simplification but lots of compromises to get it done. We need a vibrant and growing middle class and the average family has an extra $1,000 they will hopefully have dinner out once or twice more a month or do a few more home improvements. Happy to see the end to the individual ACA mandate.

 

[cernjSHU]

Yes, thanks for posting. Nice factual summary.

Won't know the complete impact for a few years. I was hoping for way more simplification but lots of compromises to get it done. We need a vibrant and growing middle class and the average family has an extra $1,000 they will hopefully have dinner out once or twice more a month or do a few more home improvements. Happy to see the end to the individual ACA mandate.

Yup some middle class people being bought off for $1000 a year, What does that come up So for $83 per month, the middle class and the country takes a hot for millionaire , billionaires and corporations to save millions and the country to go into bigger debt by minimum a trillion. But probably more.

Moreover, those of us in NJ will really get hurt. According to that article And wow, I did not know this provision was even in this - ALIMONY WILL NOT BE DEDUCTABLE. This will truly devastate people. I don't know why this idiotic provision is not getting more attention. How are people going to live when they are paying alimony?

 

[Section112]

Alimony will be deductible for marriages that officially ended before the law goes into effect but not after. It's a big change for sure but they tried (did not completely succeed) to simplify the tax code.Alimony reform is advancing in some states more than others. Not NJ which is typical as they still have very archaic laws (permanent alimony) that the lawyers in our state won't allow changes to because it makes them so much money.
I think for this law to be successful there still needs to be some changes. Just another incentive to really pay attention and make sure you marry the right person.

And we have to hope that the corporations keep their profits and companies in the US and hire more US workers. If that happens this bill will be a significant success. No guarantees but the rate of corporations keeping their profits out of the US is hurting tax collections and if US companies stay at home it will at minimum retain jobs here but it also may help to grow jobs here and the tax base.
What is worrisome is some of Trumps proposed changes to H1B because we need qualified foreign workers here to grow the economy. Just some random thoughts. I saw a study on CBS that said 85% of Americans will get some sort of tax cut but those rates change in 2027 and then taxes will go up.

For NJ this hurts due to our very high state and real estate taxes and corresponding loss of the SALT deduction. I read six states will have their taxes go up including California, NY, Maryland, NJ, Mass and one other that I cannot remember. The rest of the states will have more of their citizens where their taxes will go down. No coincidence that those are the six highest taxed states in the country.

Just some random thoughts.

 

[HALL85]

Yup some middle class people being bought off for $1000 a year, What does that come up So for $83 per month, the middle class and the country takes a hot for millionaire , billionaires and corporations to save millions and the country to go into bigger debt by minimum a trillion. But probably more.

Moreover, those of us in NJ will really get hurt. According to that article And wow, I did not know this provision was even in this - ALIMONY WILL NOT BE DEDUCTABLE. This will truly devastate people. I don't know why this idiotic provision is not getting more attention. How are people going to live when they are paying alimony?

You do a great job spitting back partisan talking points. So you want the wealthy to take a hit, just not the wealthy in New Jersey. And those same evil corporations are also feeding your 401(k).

And the reason why the alimony clause and other details are not getting attention? Because the MSM is too busy chasing down Russia and bloviating every tweet Trump types. He has manipulated and played the MSM and it's all about diversion. The effects of this bill will not be known for several years and so any absolute predictions from either side at this point are just silly. One thing is for sure though. The underpinnings of the ACA have just been cut blocked.

 

[Section112]

Here is a summary of some of the changes the tax bill will have that affect corporations and businesses. This is not even close to 100% of the changes at all but just a summary of some of the points. You can see the bill is trying to get US companies to repatriate their foreign earnings and keep the profits here. What I don't see is some of the deductions corporations will lose that should make it into the bill.

https://www.journalofaccountancy.co...cpald&utm_medium=email&utm_campaign=19Dec2017

 

[Pirata]

They caved on the private equity carried-interest deduction.

Must be nice to have lobbyists working for you.

 

[Section112]

They caved on the private equity carried-interest deduction.

Must be nice to have lobbyists working for you.

Agree that was bullshit!

 

[Pirata]

They caved on the private equity carried-interest deduction.

Must be nice to have lobbyists working for you.

Agree that was bullshit!

I suspect they will go back at that again in the new year and repeal it.

 

[Hall-line-forever]

And they removed the healthcare mandate, didn' t they? THat's huge.

ObamaCare repeal next!!!!!

 

[Merge]

And they removed the healthcare mandate, didn' t they? THat's huge.

ObamaCare repeal next!!!!!

Yea they got rid of the mechanism which allows us to cover pre-existing conditions.

Can’t wait until we can deny coverage again, and people have to file bankruptcy for medical bills again! #maga

 

[shu09]

Yea they got rid of the mechanism which allows us to cover pre-existing conditions.

Please explain.

 

[Section112]

Yea they got rid of the mechanism which allows us to cover pre-existing conditions.

Can’t wait until we can deny coverage again, and people have to file bankruptcy for medical bills again! #maga

Source on that? I have not seen anything legit that says that so far.

 

[Merge]

Why do you guys think the mandate is there? Why do you think preexisying conditions were not covered prior to the ACA?

The mandate is there to help pay for coverage of sick people, and make sure that people don’t just look for coverage when they get sick.

I am not suggesting anything controversial here. This was widely discussed years ago.

How many links would you like?


http://amp.nationalreview.com/artic...care-repeal-plan-preexisting-coverage-problem

https://www.thebalance.com/obamacare-pre-existing-conditions-3306072

http://money.cnn.com/2017/11/15/news/economy/obamacare-individual-mandate/index.html

http://www.foxbusiness.com/politics...are-individual-mandate-what-it-means-for.html

 

[shu09]

The mandate is there because it's a revenue generator. Nothing more, nothing less. Remember, follow the money.

It generates revenue for health insurance companies that they wouldn't have otherwise had. Think about it. Millions of relatively healthy (mostly young) people paying premiums every month they otherwise would not have. Big time $$ for the insurance companies.

If they don't buy insurance, it's a free revenue generator for the government. Remember, the mandate was ruled a tax by the Supreme Court.

 

[Merge]

The mandate is there because it's a revenue generator. Nothing more, nothing less. Remember, follow the money.

It generates revenue for health insurance companies that they wouldn't have otherwise had. Think about it. Millions of relatively healthy (mostly young) people paying premiums every month they otherwise would not have. Big time $$ for the insurance companies.

If they don't buy insurance, it's a free revenue generator for the government. Remember, the mandate was ruled a tax by the Supreme Court.

Yes exactly. It is about generating more revenue, so thy can price policies reasonably. Did you click on any of the links I provided?

Covering pre-existing conditions was literally the reason for the mandate.

 

[Section112]

Yes exactly. It is about generating more revenue, so thy can price policies reasonably. Did you click on any of the links I provided?

Covering pre-existing conditions was literally the reason for the mandate.

The mandate was there for lots of reasons but mostly because it will keep more people in the pool (healthy and non-healthy people), generating more revenue to pay for the claims and to potentially keep the premium costs lower. The problem is that has not kept premiums down and people can opt out and pay which does not help the diversity of the pool.

The tax bill takes away the mandate - it does not preclude insurance companies from covering pre-existing conditions - that is false and misleading. Will losing the mandate raise premium prices - absolutely yes. So I get what you are saying but the new law changes the mandate only. Does it undercut Obama Care. Yes I agree. It has been falling apart anyway with so many insurers leaving states and this trend will continue.

Congress and Senate need to fix ObamaCare.

 

[HALL85]

In a way, the failure to repeal Obamacare will actually pave the way for major reconstruction with the elimination of the mandate under the tax reform. This will now force the healthcare issue to be solved in a bipartisan manner.

 

[Merge]

The mandate was there for lots of reasons but mostly because it will keep more people in the pool (healthy and non-healthy people), generating more revenue to pay for the claims and to potentially keep the premium costs lower. The problem is that has not kept premiums down and people can opt out and pay which does not help the diversity of the pool.

This was the first year the penalty would have been fully in place.

Just like the tax bill will ale years to understand its true benefits / consequences... the ACA was the same except it was never fully implemented.

But again... the mandate was specifically designed to pay for covering preexisting conditions by decreasing the risk in the pool. Not sure why you are taking issue with that.

This is from Eric holder and Kathleen Sebelius in 2010.
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/13/AR2010121303816.html

“Without an individual responsibility provision, controlling costs and ending discrimination against people with preexisting conditions doesn't work.“

 

[Section112]

The next word I believe from Eric Holder will be the first. In that sentence you write multiple things including controlling costs i.e., premiums and pre-existing conditions. Show me where the new tax bill specifically says that insurance companies don't have to cover pre-existing conditions. It's not there and they do and they have already built that into the premiums for the coming year that are rising quickly.

I completely agree that something has to be done but am not sure our dysfunctional Congress and Senate can get it done. Noone talks to each other anymore and its both parties doing it not just one party. This has been true the last ten years at least. Sad state of affairs.

 

[Merge]

The next word I believe from Eric Holder will be the first. In that sentence you write multiple things including controlling costs i.e., premiums and pre-existing conditions. Show me where the new tax bill specifically says that insurance companies don't have to cover pre-existing conditions.

that’s not what I said.

The mandate is the mechanism that pays for covering pre-existing conditions. The people who designed this law said that.

I’m not saying this tax bill removes coverage, but premiums are going to spike fairly drastidally because healthy people will be leaving the pool.

Congress will need to do something to address that fact, or the plans on the exchanges are going to be too expensive to work leaving millions again uninsured.

 

[Section112]

From what I understand a lot of the plans did not know if the tax law was going ahead or not so many (maybe not all) have built that uncertainty in and that is another one of the reasons why premiums are really high in the new plan year.

 

[HALL85]

Congress will need to do something to address that fact, or the plans on the exchanges are going to be too expensive to work leaving millions again uninsured.

and this may be the good that comes out of this. Congress will have to do something and most likely in a bipartisan manner. They can finally learn how to work together as real public servants.

 

[Section112]

and this may be the good that comes out of this. Congress will have to do something and most likely in a bipartisan manner. They can finally learn how to work together as real public servants.

I hope you are right. I'm thinkig pigs will fly before these folks work together.

 

[Merge]

and this may be the good that comes out of this. Congress will have to do something and most likely in a bipartisan manner. They can finally learn how to work together as real public servants.

Unfortunately, it is hard to see that happening.

2018 = Democrats 2010. They are going to try and pick up House seats blaming republicans for passing an unpopular bill, just as republicams did in 2010.

 

[shu09]

Fifth Third bank and Wells Fargo are increasing their minimum wage and paying bonuses. AT&T is paying bonuses and adding $1 Billion to its capital expenditure budget.

Amazing! This bill is working already and it hasn't even taken effect yet.

I thought all these companies were going to hoard the cash and reward their executives?!?!?

 

[HALL85]

Fifth Third bank and Wells Fargo are increasing their minimum wage and paying bonuses. AT&T is paying bonuses and adding $1 Billion to its capital expenditure budget.

Amazing! This bill is working already and it hasn't even taken effect yet.

I thought all these companies were going to hoard the cash and reward their executives?!?!?

Can't wait for Chuck "The Clown" Schumers Sunday press conference.

 

[Merge]

Fifth Third bank and Wells Fargo are increasing their minimum wage and paying bonuses. AT&T is paying bonuses and adding $1 Billion to its capital expenditure budget.

Amazing! This bill is working already and it hasn't even taken effect yet.

I thought all these companies were going to hoard the cash and reward their executives?!?!?

It’s PR. Just like Carrier was going to keep all of those manufacturing jobs if they got a break and then left anyway 6 months later. At the end of the day, AT&T, Wells Fargo and Fifth Third are going to be paying market rates for their employees. That is their responsibility to their shareholders. For now, they are trying to make some positive press. Nothing wrong with that, it is good business, but track employment and wages for the next 2-3 years and we will see some of the real impact on this tax bill.

 

[Pirata]

track employment and wages for the next 2-3 years and we will see some of the real impact on this tax bill.

Exactly!

OK class, today's word is "Up". Let's spell that. U....P....

 

[shu09]

It’s PR. Just like Carrier was going to keep all of those manufacturing jobs if they got a break and then left anyway 6 months later. At the end of the day, AT&T, Wells Fargo and Fifth Third are going to be paying market rates for their employees. That is their responsibility to their shareholders. For now, they are trying to make some positive press. Nothing wrong with that, it is good business, but track employment and wages for the next 2-3 years and we will see some of the real impact on this tax bill.

Might be PR, might not be. What I do know is that it is money in the pockets of middle and lower class workers.

 

[HALL85]

Might be PR, might not be. What I do know is that it is money in the pockets of middle and lower class workers.

Yes, there is definitely a PR aspect to this, but these are real actions, not promises. Money in working Americans pockets with either bonuses or increased minimum wage.

 

[shu09]

Yes, there is definitely a PR aspect to this, but these are real actions, not promises. Money in working Americans pockets with either bonuses or increased minimum wage.

Wage growth! Who'd have thought??? LOL!

 

[Pirata]

It’s PR.

I think it goes beyond simply PR. It is a very strong endorsement of the tax plan.

I expect more will follow.

AT&T is paying a special $1,000 bonus to more than 200,000 of its non-management workers.

Fifth Third Bancorp, will raise the minimum wage for all of its nearly 3,000 hourly employees to $15, and would distribute a one-time bonus of $1,000 for more than 13,500 employees

Wells Fargo, said it would boost its minimum wage to $15 per hour

Boeing said it would move forward with $300 million in investments including $100 million in employee training and education and $100 million to enhance Boeing facilities as part of its "workforce of the future" initiative.

Comcast said it would award special $1,000 bonuses to more than 100,000 eligible employees.

 

[Pirata]

Let's not overlook ANWR!

Can't wait for Greenpeace to go bat-guano !

 

[Merge]

I think it goes beyond simply PR. It is a very strong endorsement of the tax plan.

Yeah, of course they endorse it. They keep more money.

However it is also irresponsible if they start paying their employees more than market rates, unless they are seeing a return on that increased “investment”.

Like carrier before them... I will take an approach that says this is good news, but let’s wait and see what the actual real impact is.

It is supply side economics which doesn’t work without also having enough demand.

 

[shu09]

However it is also irresponsible if they start paying their employees more than market rates, unless they are seeing a return on that increased “investment”

HAHA. You want wage growth, yet you say this? Stop talking out of both sides of your mouth.

 

[Pirata]

However it is also irresponsible if they start paying their employees more than market rates,

I don't think they are going to characterize this as an increase in pay. It is more along the lines of a sharing of profit not unlike any other profit sharing plan or initiative. In good years you get more, bad years you get less. Your pay rate stays the same, but your overall comp can change based on circumstances.

I am not sure I get where you are coming with regard to "irresponsible if they start paying their employees more than market rates". Maybe I am missing something but I see it as a companies prerogative to pay whatever the they please. Many companies are known to may more or less than market for a particular skill.

I am also not understanding why this would be criticized. A tax bill was passed that included a tax cut for corporations. That affected their projected bottom line and they are sharing that with their employees. Immediate cash is flowing down to the workers to be used however they see fit; savings, spending, whatever. Why is this a bad thing?

 

[HALL85]

That affected their projected bottom line and they are sharing that with their employees. Immediate cash is flowing down to the workers to be used however they see fit; savings, spending, whatever. Why is this a bad thing?

Answer: Because the Democrats didn't think of it....

 

[Merge]

HAHA. You want wage growth, yet you say this? Stop talking out of both sides of your mouth.

Both sides how? This is economics.
Tax rates don’t increase wage rates.

The purpose of a company is to use the money from investors / shareholders and generate profit. We have seen a period of large corporate profit which has not resulted in increased wages. Why do you think that is?

Corporations don’t increase wages because they have more money, they increase wages when the employment market is saturated and attracting talent is very competitive.

When there are 100 qualified applicants for 1 job, there is little incentive to pay a higher than market wage.