
A Year After the Middle Class Tax Cut, the Rich Are Winning - theslurmmustflo
https://www.bloomberg.com/graphics/2018-tax-plan-consequences/
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robertAngst
>The tax law limits or eliminates dozens of itemized deductions, including for
SALT, mortgage interest, home office expenses and fund management fees.

Wait, they got rid of mortgage interest?

Since the internet told me to see a CPA, I did. And I was not happy at how
limited his knowledge base was. I corrected him a few times during our
meeting. We had a conversation about Mortgage Interest and this never came up.

Isnt the point of the certification to be the expert? I'm just a math guy that
can read.

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zdragnar
For primary residencies, you can now only deduct interest on up to $750,000 in
debt (i.e. your mortgage principle) rather than the $1,000,000 if you had
bought your home before 2018.

In short, most people won't be affected, unless you own a mansion or a home in
an overpriced market such as SF or NYC.

Keep in mind that the standard deduction also doubled, so depending on your
own situation, you may not even need to itemize your deductions, such as your
mortgage interest.

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icsllaf
This seems backwards to me. Wouldn't a better option be to deduct interest on
any house worth less than 750k or some lower number as that would help the
middle class much more while also encouraging smaller home purchases and
affordability?

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zdragnar
Correct. The $750k number is the cap on the debt for which you can deduct paid
interest from. So, if you borrow 1 million dollars to buy a house, you only
get to deduct 3/4 of the interest now, instead of the full amount. Interest on
smaller loans continues to be fully deductible.

Doubling the standard deduction may have a perverse inventive against
borrowing less (or simply buying cheaper homes) as, depending on your
situation, it may be better than itemizing.

I think it's debatable whether the mortgage interest deduction really plays
heavily into a noticeable amount of people's decision to buy or not; unless
you are having a hard time deciding to buy or rent, there are a lot of other,
larger factors.

Finally, I believe that doubling the standard deduction and eliminating a
number of other deductions is a small, first step towards creating a simpler
tax code- such a code wouldn't be as useful for social engineering (help
middle class buy more small homes) but there are plenty of benefits, too.

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maxerickson
It certainly factors into what people are willing to pay each month, which is
the actual thing they think about when they are figuring out how big a
mortgage they can handle.

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kurthr
Is it really a "middle-class tax cut" when, "one in 20 families face a higher
tax burden this year... [but] 7.3 percent of middle-income groups."

That means that the middle class have a 146% chance of having a tax increase
relative to the median. Of course you could claim that the upper middle class
got more $ cut than the lower middle class or some such thing.

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ams6110
With any tax cut, the rich will benefit the most because they pay most of the
taxes.

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disishhsha
That doesn’t have to be true.

Examples:

1) A credit of $1,000 per taxpayer.

2) Increase the standard deduction by $1,000.

And countless others.

Tax cuts benefit the rich by design, not due to some natural law.

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copenja
Over 40 percent of Americans don't pay ANY Federal income tax.

So, by natural law, doesn't any tax cut not benefit them?

This includes most of the countries poorest citizens.

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epylar
It's worth noting that 24 percent of Americans are under 18 and 15 percent are
over 65. :)

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sjg007
That 24% under 18 are claimed by their parent/guardians.

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TheCoelacanth
That's only for determining who gets certain tax deductions. Minors still have
to pay their own taxes and file their own tax return (if they make more than
the threshold for filing) even if they are claimed on their parents taxes. The
only way you can have multiple people paying or filing taxes together is if
they are married.

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HillaryBriss
> ... the rich are winning

sort of like saying "the winners are winning."

the rich are pretty much always winning.

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justinzollars
Sorry people are downvoting you. I really hate this feature - I just want you
to know I appreciate your comment and if I were in charge I'd kill this
feature.

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HillaryBriss
thank you kindly. i'm not a fan of HN down voting either. i try not to do it
at all. (i think my total number of down votes can be counted on one hand.)

