Trump’s tax plan.
Of course the devil is in the details, and anyone who tries to score how this will work for the rich verses the poor is playing bullshit political games, so ignore them.
But if the reforms Trump wants to put into place–as described at the press conference–I believe it would increase our taxes.
This is because one major feature of Trump’s tax plan is to eliminate all deductions from personal taxes, except for the standard deduction (which would be doubled), and the home mortgage deduction.
Looking at my personal 1040 that I recently filed, I notice the standard deduction for Singles is $6,300 and married (filing joint) is $12,600.
What this means is that if your itemized deductions (such as what you pay in local taxes, property taxes and the like) is less than twice the threshold numbers, then you’ll have a lower taxable income under Trump’s plan. Greater than that, and you’ll have a higher taxable income.
In my case, depending on the cutoffs of Trump’s proposed tax brackets, our taxes may go up a few hundred dollars a year. I can envision those who are genuinely in the top 1% (we’re not even close) paying significantly more.
Does this bother me?
Honestly, if the tax code is greatly simplified, I’d rather pay a little more but have less stress while paying taxes. Right now because of the income bracket we’re in–high enough to come on the IRS radar, but not high enough to make hiring a tax attorney worthwhile–every April 15 fills me with dread. So much so that I often deliberately overlook certain deductions (such as the home office deduction) because the fine print on the deductions–such as recapturing the value of the deductions when a house is sold–gives me a headache and massive heartburn.
So I already pay a little extra to reduce my stress. Stupid, but true.
If we were to greatly simplify the tax code–and even use a European system where the government (which already has most of the information necessary to prepare your taxes for you) sends you the tax form for you to correct rather than the other way around (on penalty of audit or worse)–it would make paying taxes a lot less stressful.
Even if, for some of us, we wind up pay a little more.
As a footnote, do you know what a “tax loophole” is?
It’s a tax deduction we don’t like.
Meaning if you’re an average middle-class schmuck who owns a house, has a couple of kids and recently installed an energy efficient hot water heater (because the old one broke down and leaked water everywhere)–guess what?
You are taking advantage of a bunch of “tax loopholes.”