GOP Tax Reform – Not So Big Savings

Tax Reform has been all over the news in the last week and when the Senate passed their bill on Friday night, I was excited at the prospect of seeing a solid windfall based on what the politicians were saying about it.

The Republicans promised big savings for everyone across the board – they were even concerned it might be too much and increase the national debt. Democrats, on the other hand, claimed the tax cuts were only for the wealthy and would increase income inequality – I guess by increasing tax equality – as the US has a very progressive tax structure.

Since we are a wealthier than average household, I expected we would make out pretty well in this deal. Our average tax rate went up about 4 percentage points under Obama’s tax increase, so I hoped we would get that back. (We also have been socked with a $5K/year extra ObamaCare Tax that I hope has been completely eliminated).

Unfortunately, that doesn’t look like the case. I used the MoneyHelpCenter.com calculators to compare our expected 2017 income & deductions under the new Senate plan compared with existing laws and only found a benefit of 1.5 percentage points. The calculator is pretty simple – and not authoritative – but I hoped it would give me some sense of what we might be getting.

Tax Reform was one of my top 4 priorities last Election Day in my post What The New President & Congress Must Address. It looks like the Republicans are delivering some of what I hoped for, but much less than I wanted to see.

How do you expect to make out in 2017 Tax Reform?

Image Credit: Pixabay

7 thoughts on “GOP Tax Reform – Not So Big Savings

  1. We’ll save a few hundred dollars on the standard deduction. But our healthcare costs may rise with the removal of the Obamacare penalty. Still, I’m not too concerned because I think more changes are coming.

    Liked by 1 person

    • True – they still have to sort things out between the house and Senate versions. I hope they kill the AMT.

      Like

  2. We will get clobbered by tax reform, because it looks like property tax deductions will be limited or eliminated, and state income taxes will no longer be deductible. We live in a high income tax state. The reform will probably increase our taxes by 5%. It also appears the Obamacare tax is still in effect.

    Liked by 1 person

    • It looks like they are trying for a $10K/year property tax deduction. That’s about exactly what we pay. We’re in high-tax MN, but on principle, I’m fine if that isn’t a deduction.

      Like

      • Yes – Minnesota is true blue Democrat controlled for generations. We pay 9%+ income tax. That said, IMO, it is our State’s problem and shouldn’t be ‘excused’ by the Federal government with a SALT deduction.

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s