DarkRange55
Enlightened
- Oct 15, 2023
- 1,786
If you have your own business you have access to an additional tax cut called Qualified Business Income (QBI) which is roughly 20% of your pass through entity profits. Large C-corps don't get this because they're taxed in the business. (C Corps are Federally taxed now at 20%, and individuals taxed at up to 37%, this QBI 20% cut to individuals was to make up part on the disparity in tax rates between C-Corporations and individuals).
Thats a huge benefit to the middle class. Double the standard deduction, double the child tax credit. Where as wealthy people in big liberal cities because they put a cap on SALT (state and local taxes), you can only deduct $10,000 a year. With a cap it reduces the chance you can itemize deductions. If they lifted the salt cap they would pay a bunch of state and local taxes and itemize and save on federal income taxes. (This is true, but if you got a federal benefit for the reduction of your federal income taxes, from the state income tax deduction, the following year you will be taxed on that portion of the state deduction that reduced your prior year federal tax liability). (So the state would not change because you do not get a state deduction for the State tax, itemized deduction, but any benefit that you got that reduced your FEDERAL tax, from itemizing and taking large state tax deductions, you would be taxed on that on the federal tax return in the following year).
So most tax cuts for working people in the TCJA have a sunset provision on them, some not. Whereas the tax cuts for corporations and wealthy are permanent. "The individual taxpayer cuts will expire by 2027. If Congress does nothing to extend them, the top 1% will at that point receive roughly 83% of the tax cut benefits, according to estimates from the nonpartisan Tax Policy Center."
https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained/
Trump ("Trumpenomics") has proposed some radical changes to the tax code including eliminating income tax in favor of tariffs. We shall see…
Thats a huge benefit to the middle class. Double the standard deduction, double the child tax credit. Where as wealthy people in big liberal cities because they put a cap on SALT (state and local taxes), you can only deduct $10,000 a year. With a cap it reduces the chance you can itemize deductions. If they lifted the salt cap they would pay a bunch of state and local taxes and itemize and save on federal income taxes. (This is true, but if you got a federal benefit for the reduction of your federal income taxes, from the state income tax deduction, the following year you will be taxed on that portion of the state deduction that reduced your prior year federal tax liability). (So the state would not change because you do not get a state deduction for the State tax, itemized deduction, but any benefit that you got that reduced your FEDERAL tax, from itemizing and taking large state tax deductions, you would be taxed on that on the federal tax return in the following year).
So most tax cuts for working people in the TCJA have a sunset provision on them, some not. Whereas the tax cuts for corporations and wealthy are permanent. "The individual taxpayer cuts will expire by 2027. If Congress does nothing to extend them, the top 1% will at that point receive roughly 83% of the tax cut benefits, according to estimates from the nonpartisan Tax Policy Center."
https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained/
Trump ("Trumpenomics") has proposed some radical changes to the tax code including eliminating income tax in favor of tariffs. We shall see…
