If you’re a tax winner or loser
See for yourself
President Donald Trump has signed the controversial tax cut bill into law. We are now at the point where the rubber meets the road. Who are the winners and losers under the new law, which takes effect for the 2018 tax year? It depends on whom you talk to. For example: Some corporations have said they will give bonuses to millions of employees. There are some who applaud the bonuses and others who say it’s a scam.
The proof will be in the pudding once employers use the new tax rates to calculate federal income taxes on present wages. Republican leaders have said that 80 percent of wage earners will see a reduction in the tax around Feb. 1. Democratic leaders say this is a tax “grab” and that it is only a tax break for the rich shareholders of the evil corporations.
I don’t think anyone should wait until February to find out if his or her taxes went up or down. This is assuming your gross pay remains the same. Since the new tax rates are published and we know how much we make, let me make a suggestion: The Post-Gazette could publish a tax calculator with the new tax rates and let people decide for themselves. Here’s how it would work: Take a look at a recent paystub and see how much is taken out for federal income tax now. Using a 2018 tax calculator with the new tax rates, the wage earner will find out if she is a winner now instead of waiting for the outcome.
Disclosure: I am not an accountant. But if I’m missing something, I’m sure we can get the bugs out of my scenario. By having a logical, honest way of calculating the new rates, taking into account the new standard deduction and child tax credit, some of the politics will be out of the equation.
Some Republican leaders estimate that 90 percent of tax filers will take the standard deduction. Currently, 70 percent take the standard deduction. A recent poll shows that only 17 percent of people believe their taxes will go down. Are they correct?
Let’s do the math and find out before February. If you don’t do the math yourself, then you’ll probably believe what someone else tells you happened. MIKE SULEY Scott