Income tax cuts for anyone earning more that about $400K a year. Increased taxes for everyone else.
Probably eliminate the deduction for state income tax, and perhaps the mortgae deduction. Maybe just limit the mortgage deduction to $500,000 loans.
They have abandoned plans to decrease the amount you can contribute to your 401k plan–down to $2,400 from $18,000 a year.
The estate tax will be eliminated. That will benefit only the very small number of very rich (presumabley Republican) individuals who may have to pay it. Although not many individuals pay the estate tax, the loss of revenue is estimated at 172 billion. That loss will be made up by the rest of us and by our grandchildren, because another effect of tax cuts is to increase the deficit.
Gone also is the ability to deduct medical expenses that amount to more than 10% of your income. People with large medical expenses are typically over 50 and earn less than $75,000 a year. In other words, this tax cut will affect the poor and middle class in order to provide benefits to the very rich. Among those currently using thisdeduction are families paying for long term care. Remember, Medciare doesn’t pay for long term care. At one time, a lot of companies jumped into the long term care insurance business. Most of them have gone bankrupt or given up for other reasons. People receiving long term care just don’t die. Medicaid pays for some long term care, but patients must be devoid of assets to qualifyThis issue is a huge problem for the US that goes beyond this tax bill. Anyone wanting more info should start with the movie, “Still Alice.” Taking away the ability to deduct large medical expenses will make this problem worse for people who can’t afford it.
And by the way, deductions for student loans will also disappear.
CNBC has listed winners and losers under the Republican tax plan. there are lots of details, but the big picture is that those earning above $400,000 will benefit. Others will see their taxes go up. In addition, the deficit will go up. A lot. That means more money spent on paying interest on the debt. If interest rates generally go up, that will have a multiplier effect on the cost of raising the debt.
The ability to dedcut state taxes from your income before calculating the federal tax will also go. That means those living in blue (Democratic) states will lose a bigger deduction because of higher local taxes.
Almost everything about the bill is bad for ordinary folks and good for the super-rich.