Will Your Taxes Go Up? Find Out With These 8 Scenarios

With Republicans having inexplicably sacrificed a crucial Senate seat last night by choosing to support a candidate accused of multiple counts of pedophilia, it's unclear whether tax reform is even a remote possibility at this point.  Certainly, the challenge of forming a consensus among the GOP was difficult enough when they held a 2-seat advantage in the Senate so we can only assume it will be next to impossible now that that lead has been cut in half. 

Of course, Republicans seem to have every intent of passing a tax bill before Doug Jones gets seated in January...but, then again, they've missed almost every deadline they've set for themselves since Trump moved into the White House nearly a full year ago.

Be that as it may, just in case a bill gets passed at some point before winter break, Bloomberg, along with a little help from Baird Private Wealth Management, has put together a series of 8 tables which help to quantify exactly how you may be impacted by tax reform whether you're a "millionaire, billionaire, private jet owner" living in Manhattan or an "average Joe" making $40k a year and renting an apartment in Milwaukee.  Here they are:

Scenario 1 - Manhattan Millionaires: These Manhattan residents have a jumbo mortgage (at an assumed 4 percent interest rate) and take a $40,000 deduction on mortgage interest; pay property taxes of $96,250 and state income tax of $135,360; and make annual charitable contributions totaling $100,000.

Unfortunately, contrary to what you might hear from Nancy Pelosi, these folks take a hit under both the House and Senate tax bill primarily due to the loss of the SALT deductions.

Scenario 2 - Malibu Millionaires:  A married couple has a primary residence in Malibu, California, and a second home in Lake Tahoe. The property tax on the Malibu home is $15,860, and $4,896 on their second home; they deduct $40,000 total in mortgage interest for the two homes; and give $50,000 to charity.

Scenario 3 - Small Business Owner:  This married couple with a small manufacturing business in Pittsburgh, Pennsylvania, has $300,000 in pass-through business income. Their deductible mortgage interest adds up to $6,000; their property tax is $8,600; and they give 5 percent of their income to charity.

Scenario 4 - Suburban Family:  A married couple in a New York City suburb has estimated state income tax of $17,290; their annual mortgage interest deduction is $14,000; and they pay property tax of $13,750 -- about the same amount they donate to charity.

Scenario 5 - Single Secretary In Manhattan: This New York City renter pays estimated state income tax of $8,148 and gives about $6,500 to charity.

Scenario 6 - Married Family In Austin:  This young couple rents and has income of $100,000. They give $5,000 a year to charity.

Scenario 7 - Median Income Couple In Portland:  This Portland, Oregon, couple earns close to the median household income for the U.S. Their property tax bill is $1,688; their deductible mortgage interest is $3,000; and estimated state income tax is $4,744.

Scenario 8 - Median Income Family In Milwaukee:  This married couple rents and has an estimated 2017 state income tax bill of $2,104.

Of course, this will all change when/if the GOP submits a final tax bill for consideration...but, like Obamacare, you may only find out how it truly impacts you after it has already been passed.

Comments

Bes Wed, 12/13/2017 - 18:14 Permalink

crumbs peasants fighting over crubs and people are gratefully that their oligarch overlords dropped a few on the ground as they enjoy the whole hog ------- people have some pathetic expectations and no one wonder the bar is sooooo fucking low

nmewn ACP Wed, 12/13/2017 - 18:39 Permalink

My favorite statist and/or progressive refrain is..."How are we going to pay for this?!"...and I'm always like, wtf are you talking about?...you are not "paying" for anything...you are going to be taking less from us and the rest of the country is sick & tired of allowing Blue States to deduct local/state taxes off their federal tax bill, its a subsidy.They can either get another job or elect people who don't tax the dog squeeze out of them ;-)

In reply to by ACP

Automatic Choke ACP Wed, 12/13/2017 - 19:10 Permalink

Scenario #3 is wrong.    It lists the gross income the same both ways.From the preliminaries I've read, if you are a small business owner with pass-through taxing (LLC, S-corp), then your business becomes more profitable (on paper) because many expensible items now are not allowed.  You'll pay full freight instead of pre-tax on these, so the pass-through income will appear larger (even though you have no more money), and your tax bill goes up.    It can be a substantial hit -- but I haven't seen the full list of what items will change yet.

In reply to by ACP

Utopia Planitia nmewn Wed, 12/13/2017 - 19:36 Permalink

That line clevery connects with those who simply react emotionally (demonrats/progs) and is immediately rejected by anybody with active brain cells. It is a statement that has nothing to do with what is being discussed.Example: If your neighbor decides to NOT take his family to see a movie on Friday night does anybody stand up and start screaming "HOW IS THE THEATER OWNER GOING TO PAY FOR THAT?!?!?"  Of course they don't.  But it is the exact same scenario. If you take that mindset to the extreme then the govt has to be in total control of all production and all consumption. Which is the goal of demonrats and progs.

In reply to by nmewn

nmewn Utopia Planitia Wed, 12/13/2017 - 19:51 Permalink

"If you take that mindset to the extreme then the govt has to be in total control of all production and all consumption. Which is the goal of demonrats and progs."Exactamundo!Because when you boil it all down, the only people who could possibly be against anyone getting a tax cut would have to be, parasitic wards of the state OR the very interested bureaucrat who suckles them at someone elses expense. 

In reply to by Utopia Planitia

Mikeyyy nmewn Wed, 12/13/2017 - 20:20 Permalink

Why then isn't the rest of the country sick and tired of allowing corporations to deduct state & local taxes?  Oh that's right, they're right wingers who either believe in trickle down, or don't even know they're subsidizing corporations. Which kind of stupid are you?

In reply to by nmewn

Kefeer Mikeyyy Wed, 12/13/2017 - 22:26 Permalink

Corporations do not pay taxes.  All liabilities (i.e. taxes) are priced into the delivery of any good or service.  Corporate taxes do one major thing; keep the playing field uneven for small local and regional corporations.  Large corporations can more easily reduce or eliminate corporate taxes while the smaller ones cannot.

In reply to by Mikeyyy

nmewn nmewn Wed, 12/13/2017 - 19:19 Permalink

LMAO!...so I'm sittin here trying to figure out if stupid people can't appreciate quality sarcasm or we really do have five progs (as of now...lol) who are so deeply wounded by me pointing out the obvious that...Pelosi/Reid & Obama...DIDN'T PRODUCE A TAX CUT FOR THE AMERICAN PEOPLE!At all. Zilch. Nuffin.I'm gonna chalk it up to stupid progs and leave it at that ;-)

In reply to by nmewn

Urban Redneck nmewn Wed, 12/13/2017 - 19:45 Permalink

Actually the Pelosi/Reid/Obama tax cut might be much better... I have not read the latest version of the bill, but if employee benefits like health insuranc necome taxable income... republicans will beg for Pelosi/Reid/Obama.Much of the commentary even from the left of earlier versions was pure drivel.  And a lot of the problems I really doubt were addressed in the final version.  Ryan and Gruber probably outsource to the same TPTB skunk works...

In reply to by nmewn

Paul Kersey Bes Wed, 12/13/2017 - 19:55 Permalink

Didn't see anything about the loss of state tax deductions, which will cost me about seven grand more, and didn't see any mention of the loss of student loan interest deductions, medical cost deductions and teacher-funded materials deductions. Didn't see any subtraction against the taxes to pay for the New York multi-millionaires' carried interest deductions. In other words, the writer of this article is either badly misinformed, or believes that those that read articles like these are either badly uninformed or stupid, or both. To Suzanne Woolley, the Bloomberg writer of this article, please know that most of us ZH readers are not your dumbed down Goldmanite muppets.

In reply to by Bes

Buckaroo Banzai chubbar Wed, 12/13/2017 - 18:35 Permalink

"Secretary" = personal assistant to a corporate executive, which means you are going to get paid a shit ton of money because you can't hire anyone competent to function at an executive level of professionalism in Manhattan for less than $100k.Of course people over 40 remember a time when "secretary" was a catch-all term for office administrative help, a role that literally does not exist any more.

In reply to by chubbar

Umh chubbar Wed, 12/13/2017 - 20:50 Permalink

From a financial point of view what I do not understand is people that retire from places like NYC and stay there. It is cheaper almost anywhere else. I know that it is what they became accustomed to, but that kind of money will buy luxury a few hundred miles down the road.

In reply to by chubbar

adanata Wed, 12/13/2017 - 18:19 Permalink

 .... so tell me again... why are the citizens of a monetary sovereign paying income taxes?                     Global Central Banksters....  Hang 'em High

spastic_colon Wed, 12/13/2017 - 18:23 Permalink

this is all about working people with taxable compensation........what about retired with tax exempt and div/interest income.....there are still ways to game this system

shimmy Wed, 12/13/2017 - 18:23 Permalink

Of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course of course The ZH clown writer should just have a post that is nothing but of course.

Umh nmewn Wed, 12/13/2017 - 20:36 Permalink

While you are probably correct sometimes things break in our favor. In my case the interest on the house payment is approaching zero, so at least the timing is good. I have told many people that once you are out of DEBT you are much more flexible (while we owe on the house we can pay it off if needed). When you are flexible you can take advantage of silly ass tax changes. One of the big problems with tax changes is that they screw over those that are locked in to a plan.

In reply to by nmewn

luckylogger Wed, 12/13/2017 - 18:37 Permalink

Rich over paid chumps living on the coasts now pay moreWWWWWWWWWAAAAAAAAAAAAAHHHHHHHH!Breaks my heart, and I dont have to subsidize your fuking local taxes either.I kinda like it if it is true.Guess we have to wait until we fill out our 18 returns that we find out,,,

rent slave Wed, 12/13/2017 - 18:45 Permalink

Taxes on low income single seniors will increase by about 5 per cent under the House bill,but will be cut by about 50 per cent if the Senate version is adopted due to the elimination of the higher senior deduction currently and the elimination of the personal exemption.