posted by Heretic
Are you talking your week-by-week take-home being increased? Because I've been seeing a lot of rumblings by people complaining about how they've gone from having a refund to having to pay or from having to pay a little to having to pay a lot when they go to file. With the primary reason, from what I gathered from an article I read about this (ie: I skimmed it, therefore, I might be somewhat off), being that they got more take-home pay on a weekly basis due to how things were set up...and then, because they're the kind of idiot that thinks "MOAR TAKE-HOME = I WIN!!!!" and then stops thinking right after that thought, they're completely baffled by how the gubment is sinking their claws in a bit more at filing time.
You can go back and forth on whether someone received more or less of a refund etc….that is not the point because there are too many moving parts there. The point is what was their total tax liability for the year, versus what it was the prior year (assuming the same income).
About the only people who are not benefiting from the rate cuts are those who had very high deductions for state, local and property taxes. Those people are obviously high earners as well. The cap on those SALT deductions is now $10,000. So, if a taxpayer had say, $35,000 in state, local and property taxes that were previously fully deductible, they will lose $25,000 of that deduction, increasing their taxable income in ’18 by $25,000. At a high tax rate of say, 35%, they would owe $8,750 more in federal tax (all else being the same). However, that extra tax will be offset by the overall lower rates. So let’s say that taxpayer has $300,000 in taxable income and may now save 2% from the rate cut, he saves $6,000, which offsets all but $2,750 of the higher tax from the loss of the deductions. So much for the liberal myth that the tax cuts only benefited the wealthy. What did happen is people in the highly, overtaxed states like NY and CT, and MD and CA are realizing how badly they have been overtaxed at the state level by liberal politicians, and they are moving out (which is why Cuomo is crying his eyes out in NY).
