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Good luck with that. GOP will cut both estate taxes and capital gains. They are wholly corrupted by their big donors.
.In general I support the estate tax (not that the rich have actually had one). But if it's done away with I can't imagine that the cap gain tax exclusion would still apply. If there's no estate tax, there should obviously be no step-up in basis of cap gain property. In fact, I think the deceased person's estate should pay cap gains whether or not the asset is sold/liquidated (of course in that example the heirs would get a step-up in basis since tax had been paid).
Fern
Heard something interesting on CNN money....a person on there suggested that the $2,400 cap on deferred would not really be deferred. You would not pay taxes on the first $2,400 on contributions, would pay up front taxes on the remaining contributions and when you withdraw the money, you would pay NO taxes on any of the gains or contributions. So that would move the revenue mostly forward (to today) and give a double dip in not paying taxes EVER on the initial $2,400 each year. I just can't see the government giving up that much money and never getting taxes on it. Deficits be damned I guess.
Probably not going to happen but these guys are desperate to get enough revenue to cut taxes for those at the top. Not sure how any of this mess passes the Senate on reconciliation when there is a $1.5 trillion cap on the cuts over a decade.
Repubs don't care about future govt revenues. They care about looting the Treasury now on behalf of the ultra wealthy & hobbling the govt under enormous debt load down the road. They'll necessarily move the tax burden down the scale & into the future in the process.
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Good luck with that. GOP will cut both estate taxes and capital gains. They are wholly corrupted by their big donors.
Aside from the obvious implications of moving revenue forward, contributing to deficits in the future, etc, I must say this plan sounds like an absolute accounting nightmare.Heard something interesting on CNN money....a person on there suggested that the $2,400 cap on deferred would not really be deferred. You would not pay taxes on the first $2,400 on contributions, would pay up front taxes on the remaining contributions and when you withdraw the money, you would pay NO taxes on any of the gains or contributions. So that would move the revenue mostly forward (to today) and give a double dip in not paying taxes EVER on the initial $2,400 each year. I just can't see the government giving up that much money and never getting taxes on it. Deficits be damned I guess.
Probably not going to happen but these guys are desperate to get enough revenue to cut taxes for those at the top. Not sure how any of this mess passes the Senate on reconciliation when there is a $1.5 trillion cap on the cuts over a decade.
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Good luck with that. GOP will cut both estate taxes and capital gains. They are wholly corrupted by their big donors.
Yeah, the old "broaden the base" from Romney (and his 47% comment) comes to mind.
Republican rich donors are completely misreading the populist moment, and are pushing Republican politicians for what they think will be a "permanent" tax cut, and to do that, Republicans will have to come up with offsets. Otherwise, the tax cuts will sunset in 10 years like Bush tax cuts did. Since their base of useful idiot is already squeezed, all they have left to squeeze is the upper middle class. So I think they will go through with shrinking pretax 401K and deduction for state income taxes, and I think it will backfire on them in the long run because these are swing voters, but they are so afraid of pissing off their rich donor base for 2018 that they will do it.
My parents refuse to alter their views of Trump and the Republican party no matter what they do so go figure. This is the support that keeps idiots like these in power.
They can get far more money upfront if they don't have to worry about it being revenue neutral, but then it will expire in 10 years.Repubs' rich donors are counting on the idea that there will probably always be enough Repubs in the Senate to block tax increases in the near future. Possibly falling out of power is the risk Repubs take for money upfront.
I sure hope so. My investments (moderately conservative) are up 19% ytd. Not this good since Reagan years or the late internet bubble.I really hope the economy makes it through 4 years of trump.
My wife and I have put 30k/yr into 401k for years. Explain to me why we must detonate our responsible retirement plans by limiting that number to less than 5k/yr to give the ultra wealthy a sackful of cash. Removing the tax deduction is equivalent to limiting it. Removing it would result in a cost of 40k to make a 30k investment.
Do you get that this will drastically impact me negatively and many other working families like mine? I am being punished for attempting to do the responsible thing and provide some independence for myself in retirement. What in the fuck am I supposed to do now? Fuck the republicans. I wish there was a hell they could go to when they die. They are evil bastards who don't give a shit about the backbone of America---- the MIDDLE CLASS.
As someone in your exact same position..... Come on dude, you're not the middle class. I'm not the middle class. A household > $100k /year isn't really the middle class anymore. You and I are both safely in the privileged upper class of the top 10%.
I agree with one thing - I'm tired of incentivizing itemized deductions. So I'm fine with getting rid of the mortgage interest rate deductions, state tax deductions, etc... But where I draw the line is when they are effectively trading off those deductions in order to justify getting rid of the estate tax as well...
My mortgage deductions is one of the biggest reasons why I purchased a home.
I very much agree. I’m down with eliminating basically all deductions (although in a gradual way) but doing that to give tax breaks to millionaires and billionaires is ridiculous.
This would all have to be done carefully as to not tank the housing market and to basically loot blue states for the federal treasury but in principle there is no good reason to incentivize owning over renting or to have state taxes reduce federal ones.
I thought you were smarter. Low overhead is the key to middle class retirement. Owning your home outright is a huge step in that direction. Paying rent sucks the cash & the life out of median families & below. Rent rarely goes down and the value of a fixed mortgage payment diminishes greatly over time other than in a deflationary scenario.
Paying rent your whole life locks people into the work until you die scenario.
I'm terribly sorry to disappoint you with my limited intellect, but you're very much mistaken. The MID hurts the middle class, it does not help it.
Look at it this way:
1) Housing prices for regular people are primarily determined by the effective amount they pay each month in 'rent', meaning mortgage and property taxes combined.
2) When you give someone an income tax break for buying a house you effectively increase the 'rent' they can afford to pay and therefore housing prices go up.
3) The single largest obstacle to home ownership is the down payment, not the monthly mortgage payment, and the MID makes the down payment higher.
4) Therefore, the MID makes owning a home harder for regular people, not easier.
Also, the MID is primarily used by the upper middle class and rich, not the people who need help the most.
Paying rent is preferable to owning a home in any number of circumstances as it limits downside risk, sudden expenses, and increases mobility. Regardless, it's a choice everyone needs to make for themselves and there's no reason for the government to incentivize buying a house. If they want to subsidize middle class retirement they should just do it directly.