False tax ‘relief’

Dear editor:

As a professional, I am in the midst of tax training for the 2017 tax year and, as such, have access to professional grade tax software. In doing practice problems, I have found that we will lose far more than any temporary gains and that the promises we’re given for “relief” are false and for those few who will see some reductions in taxes, it’s but temporary. For example:

A family of four filing as MFJ with two children.

They have an Adjusted Gross Income (AGI) of $50,944. Doubling the standard deduction, using their example, subtracts $24,000, leaving a net taxable income of $26,944 and a tax (using current schedules) of $3,575. Even subtracting the doubled Child Tax Credit (also temporary) of $4,000 still leaves a net tax due before applying any withholding of $1,575.

As tax law stands now, this same family would have a standard deduction of $12,700 (not $12,000) and four personal exemptions of $4,050 times four equals $16,200, for a combined subtraction from AGI to equal a net tax liability of $22,044, or $2,341 less than their “reform” proposes. Then subtracting current child tax credit of $2,000 leaves a net tax due of just $341 vs. the proposed $1,575, or $1,234 higher, also before deducting taxes already paid in. It’s an increase for many families.

Also, if you have a dependent adult, you lose another $4,050.

Self-employed? One of the proposed versions would eliminate all expense deductions and tax the full gross income unless you are incorporated. This means the full 15.3 FICA plus federal and state withholding will be substantially higher, so again a tax increase, not a tax cut. And, all the Schedule A deductions they got rid of while corporations not only keep all of their loophole deductions, but gained even more? How does this simplify the tax code? It doesn’t, it just steals from the people to give corporations our money, which equals another huge transfer of wealth from the bottom up.