Tax reform may end up being good for payers
With all the recent news articles concerning the effect of the new tax laws and all the negative publicity surrounding such changes, you really have to wonder if this is going to be good or bad for you. The final tax changes have not been set, but a good guess of the percentage changes, the new tax brackets, deductions and credits can be made. Get out last year’s tax forms, make a copy and mark up the changes as best you can, to see how the new tax law affects you. This is the only way to determine whether the changes are good or bad.
Listening to our governor, these changes will decimate the middle class. I think the governor is absolutely correct, if you consider the governor’s definition of middle class, as those 341 donors who donated on average over $40,000 each to his campaign fund. And aren’t these the rich, the very people everyone wants to have pay more taxes.
So what’s the problem, governor?
For us of more modest means, let’s take a quick look at one proposal that gets a lot of bad press, that is, eliminating the tax deduction for each dependent. The child tax credit will be increased from $1,000 to $1,600. If you are in the 15 percent tax bracket, that is, make less than $90,000 for a married couple using the new house tax brackets. This increase in tax credit is equivalent to a $4,000 deduction per child versus the present $4,050. A little worse, but not when you consider you are now in a 15 percent tax bracket instead of a 25 percent tax bracket.
“The lady doth protest too much, methinks,” is an important quote to remember when you hear all these politicians telling you how bad something is or will be.
Do the calculation yourself, and see if it’s good or bad for you. You may be pleasantly surprised.