Posted on 12/23/2019 4:30:54 AM PST by karpov
No problem with that; if I was wrong I’d rather you told me!
The problem goes beyond “how many” - it is punishing those that even bother having children (when they reach a certain age) - and it extends into their early 20s if they are full-time students. The tax cut primarily benefited a growing number of Americans who are foregoing families and home ownership, and that in and of itself should be a cause for concern (not cutting their taxes, but the behavior it encourages). What is the long-term future for a country where this becomes common practice? It is unfolding before our eyes, and it is future that is filled with foreigners with a lower standard of living.
Thanks! I won’t argue the social implications too much, but maybe a bit.
First off, I’m tired of subsidizing college, since the colleges just grab all that money for themselves, as shown by their tuition far outpacing inflation or wages (or even both combined, not that it means anything).
Second, I do agree that a 16 year old cutoff is way too early. The cutoff should have been 19 or 20, and independent of college...in my opinion, at least.
Third, unlike many others here, I agree with you that the tax code SHOULD be used for encouraging productive families to have kids...since the government, outside of the tax code, is DISCOURAGING productive people from having kids - it’s called Social Security - why have kids if the government is going to provide for your every need in old age?
“ “The elimination of the personal exemptions was crushing; it removed thousands of dollars from your untaxed income.”
I thought there was an offsetting tax credit for kids...unless I missed something.“
Personal exemptions have become the “Standard Deduction” and it’s so large most people can’t itemize beyond those happy savings.
Standard Deduction
To compensate for the loss of personal exemptions, the standard deduction was nearly doubled for the 2018 tax year, and it was again adjusted upward for 2019. Depending on your tax-filing status, you are entitled to take one of the following standard deductions:
Single or married filing separately: $12,200.
Head of household: $18,350.
Married filing jointly or qualified widow(er): $24,400.
“Everyone is entitled to a standard deduction,” says Kim Dula, managing partner in the Philadelphia office of the accounting firm Friedman LLP. There are no eligibility requirements, no special forms to complete and no income limitations. As Dula puts it, “It’s a freebie.”
I suspect the 16 year-old cutoff is to simply force those older teens into the workplace - just as the Earned Income Credit does for low-wage workers. The political caste that designs these bills don’t want to show up at their favorite restaurants and serve themselves.
The Social Security model only works with a growing population (as a pyramid scheme); since many Americans stopped breeding, the only options are to deduct more from workers and raise the eligibility age - and that has happened.
I never thought of extending the exemption for full-time students into adulthood as “subsidizing college” (though I won’t disagree it does to some extent); to qualify, the student must be full-time, and it doesn’t have to be a “college” per se. While full-time students can certainly work, most can’t provide for themselves at that point.
I wouldn’t agree the two are related (personal exemptions and standard deduction) beyond a narrow point; rather, the increased standard deduction instead replaced (for many people) itemized deductions and the personal exemption FOR THE TAXPAYER. It didn’t take into account the dependents at all, as illustrated by the fact that those without dependents received the same new standard deductions as those with them.
You can look it up; taxpayers with larger families were among those more likely hurt by the new tax law.
“You can look it up; taxpayers with larger families were among those more likely hurt by the new tax law.”
ONLY if, for a married couple with children the dependents and all itemized deductions were greater than the new standard deduction, now $24,400.
How big of a family are you talking about?!?!?!?
I don’t have a large family, but only one of my children still qualifies for the child tax credit. The others are full-time students that would have qualified as dependents before (for years to come).
My itemized deductions were a bit below the new standard deduction, so I benefited a little from the increased standard deduction - and lost all those personal exemptions in the process.
Let me be clear - I do not have a large family, and I don’t care about the SALT limit (capping those deductions at $10,000).
“ so I benefited a little from the increased standard deduction - and lost all those personal exemptions in the process.”
You are really looking at it the wrong way. You lost no personal exemptions. You gained more with the standard deduction. And if your exemptions were higher than the standard deduction you could still itemize.
You are looking at it the wrong way; you don’t understand that “personal exemptions” and “deductions” were on different parts of the tax form before (and not related at all). The former is only a function of actual people involved (taxpayer, spouse, dependents); the latter relates to how you spent your money (charitable donations, state and local taxes, mortgage interest, etc.). They eliminated the former altogether, and modified the latter (in a way that benefited me, but in no way compensated for the loss of the personal exemptions).
Does that make sense?
He may not be talking about that big of a family. The two big things that induce most people to use itemized deductions are mortgage interest and property taxes. The tax code revisions (I will not call them cuts for reasons explained later) capped the property tax deductions not sure what they did with mortgage interest. In a higher tax jurisdiction and upper middle class wages in those jurisdictions mortgage interest on a recently purchased house, real estate tax and State and local taxes can easily be much greater than the new standard deductions.
My personal experience is that I could not tell that I had received a tax cut, due to change in employers causing my tax and benefit withholdings to be changed, and receiving a raise. Large numbers of people use their refunds to tell if they got a tax cut, the changes in the withholding tables caused many to either have a reduced refund or even owe money when they did their taxes as they barely noticed their increased paychecks or did not realize that the increase in their take home pay was due to reduced taxes.
Ok, he’s welcome to give it back. Whoever he is.
“... not sure what they did with mortgage interest. In a higher tax jurisdiction and upper middle class wages in those jurisdictions mortgage interest on a recently purchased house, real estate tax and State and local taxes can easily be much greater than the new standard deductions.”
Mortgage interest is deductible if you itemize, but as stated before you have to exceed the (married filing jointly) $24,400 you are given as a standard deduction to do so. And the interest is limited to the interest on a million dollar loan unless you got the loan after 12/14/17. Then it’s a $750K loan. And only on your primary residence and no longer on HELOC interest.
You see, the opposite of what Democrats say is true. They say the tax cuts go to the rich. In truth it is designed to help those average Americans with income below $500K per year.
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