@3puppies That was more of a tongue in cheek statement. Wishing that people stop saying how the poor will hurt when deduction goes away when in reality it’s the wealthy who benefit most from deduction. I was hoping people would just call spade spade instead of calling it upside heart with a stem. BTW medical survives in Senate bill. I would guess it will survive in the joint bill.
So the senate bill is 479 non searchable pages. Does anyone know what happened to the following small issues
An early version of the senate bill eliminated specific identification of shares for capital gains:
The house bill eliminates the estate tax. Does that automatically eliminate the stepped up basis upon death?
@garland "This is probably a naive question, and I keep thinking I’m missing something. So, Collins caved because they kept the 10K property tax deduction, right? But I still don’t know how that will help people in the midrange, who are losing exemptions. My example is me–
Last year, a bit over 19K in deductions, mostly mortgage and SALT, some charitable.
plus 8200–two exemptions =27K and change, overall deducted from gross income (also that “huge” 250 for teachers that’s being eliminated.)
Next year, since my deductions never added up to 24K, letting me keep the property tax deduction does not help at all. Without the usual exemptions, I might as well itemize.
Which means my 27K+ has gone down to 24K. So preserving the property taxes to some extent doesn’t seem to be applicable to most people .
And if I still had kids on my taxes, I’d be losing 4 exemptions. And many people are losing more than that."
You put it very well. What you illustrated is what most people are failing to see during the debate. It is not hard to see but people are just believing trump when he says “this is the largest middle class tax cut in history” or “The tax savings are going to be massive for the middle class.”. These people will not realize it until they actually do their tax forms.
To me this whole 10K property tax is joke. I fail to see how this really can benefit a large population of middle class for the exact reason you illustrate.
@ClassicRockerDad - that provision regarding FIFO for cost basis is still in Senate bill. See pg 254-255 of 479.
The House bill retains step up in cost basis at death even with repeal of estate tax.
It seems the tax scam train is continuing down the track this morning. All kinds of political will to pass this junk despite people not being in favor of it.
It really does make one scratch their heads. This is such a great opportunity for the republicans who control everything to send a nice gift to the populous to preserve their majority and make the voters happy. Instead they chose to pass a bill for the donor class and make the voters upset. They are really banking on the fact that people are too stupid to figure out that this years taxes is not any lower than last years taxes.
@busdriver11 – I might have confused you because I left out the “not” in might as well not itemize. Sorry!
But the comparison is easy–when itemizing plus the exemptions–last year I deducted 27K+. (19K+ for itemizing, 8200 for exemptions.)
Evenwith the preservation of 10K in property taxes, my itemizing will not get near 24K, and the exemptions will be gone, so I might as well use the standard deduction.
24K is 3K less than 27K. So the preservation of the property tax deduction up to 10K did nothing to help mine, and i think the average, taxpayer’s bill. We’ll all take the standard anyway, and it will be less because the exemptions are gone.
So my big point is–why are some Republicans touting that (the 10K P tax deduction) as a compromise, when in reality it will change nothing for most people?
Regarding the stepped-up basis at death even without estate taxes: silly @ClassicRockerDad, that would hurt the donor class.
@MassDaD68, clearly they think they can sell the story and/or get away with the lies.
Maybe they’re right.
“The House bill retains step up in cost basis at death even with repeal of estate tax.”
Wow.
My biggest complaint about the dialog is that the Republicans scream about how the standard deduction is being doubled from 12K to 24K implying everyone is getting this. They fail to even mention the elimination of the personal exemption. This plan would not be too bad if they simply doubled the standard and kept the exemptions. Very simple change that people would benefit from. Not the donor class, but the average family would benefit.
But as @garland pointed out , losing the exemption takes away most of the benefits.
I have 2 kids so for me I really cannot see how my taxes will benefit to any great extent.
Just a thought, can anyone explain to me how a stepped-up cost basis at death without an estate tax is different from an aristocracy? It’s exactly the same right. Generation to generation, the gain is never taxed.
Okay, I understand now. Hopefully the lower tax rates will make it so you don’t have to pay as much in taxes, however, I can’t think it would help that much with a 3K difference.
The reason why they’re touting the 10K property tax as a compromise is because they’re trying to find anything to make it look better. The 10K will definitely help people who are still going to itemize. For example, if you have high property taxes and are making big payments on a mortgage and/or large charity contributions, you would definitely use the 10K deduction, as you’d itemize. I suspect many of Susan Collins constituents are paying for expensive mortgages in a high cost of living area, plus mega property taxes. It’s definitely worth something to that group of people.
I have a mortgage, and two houses worth of NJ property tax. It STILL doesn’t help me. Taxes in NJ are overall much higher than Maine. Housing prices too. Maybe some wealthier folks on the water would benefit, but I can’t see this helping the average Mainer at all.
I really don’t think that people are realizing what the loss of exemptions will mean, especially for families with children.
I am baffled as to why Collins fought for it and how this helps Mainers. They are not on the whole a very wealthy state. $10K in property tax would be considered high. I would think over half the residents pay about half that a year.
But this ONLY helps if you have other itemized deduction to get you over the standard deduction. Otherwise it is wasted or not utilized.
It looks like Collins was promised support for other bills: https://www.nbcnews.com/politics/congress/sen-collins-outlines-deal-making-behind-tax-vote-n826046
It may not help too many people in Maine, though there will still be some who itemize. They would probably be higher income and have a large mortgage or charity deductions. I think they still have job expenses as deductions also. It would probably help people who live in New Jersey and New York much more. We will still itemize, so it will help us.
That’s not how I read the initial comments. Rather, it was along the lines of, “In many communities, most people are religious. Religious institutions in those communities are the focus of charitable work toward the less fortunate in those communities, because most people who work to help the less fortunate do it through their religion.” That’s not saying anything about people who aren’t religious-- they also may work to help the less fortunate, but they don’t do it through churches and there are fewer of them.
Suppose we said Catholics as a group in the United States do more to help the poor than Muslims as a group. That wouldn’t be saying anything about the relative charitableness of an individual Catholic or Muslim; both Catholics and Muslims in the US help the poor, but there are a lot more Catholics.
Susan Collins claimed that she voted for the tax bill in exchange for Alexander-Murray being attached to the Continuing Resolution as well as other health care conditions. The Continuing Resolution came out today; no Alexander-Murray, to the surprise of no one.
Well, they don’t have her vote in the bag on the reconciled bill. If they screw here over and the bill continues to drop in popularity, maybe she will become a no vote.
but if the House passes the Senate version as-is, there will be no need to reconcile and no additional vote in the Senate