“Hypothetical” example: Modified AGI of ~$95k
Married filing jointly. One dependent child.
CURRENT: Personal exemptions X3 plus $21k itemized deductions (state+local taxes and mortgage interest) reduces taxable income by $33k to about $62k. Tax liability of 10%*18650 + 15% * (62000-18650) — $1000 child tax credit ≈ $7,400.
PROPOSED: Zero personal exemptions plus $24,400 standard deduction (no longer makes sense to itemize) reduces taxable income by $24,400 to about $71k. Tax liability of 12% * $71k -$1,600 child tax credit = $6,900.
Trump Tax Cut = $500.
Not that this hypothetical relatively fortunate family particularly needs a federal income tax cut, but if this family had even two children, its taxes would actually increase under the GOP tax proposal. Correction/UPDATE: The tax cut is still about $500 in this example even with two children, because for the two children the increase of the child tax credit approximately offsets the loss of the personal exemptions.
In either case, there is no significant, tangible benefit. This family can only hope that increased corporate profits will somehow trickle down to their 401K account.
Very thin gruel, indeed. Maybe if the level of mathematical and civic literacy in this country was higher, middle-class people wouldn’t fall for this crap.
It seems to me that a significant number of Trump voters will actually have their taxes increased to partially offset enormous tax cuts for the already obscenely rich, but Fox Noise will actually convince them to believe that their taxes were cut, even if confronted by their own actual tax returns showing otherwise. After all, this is the same crowd that believes that the stock market went down and unemployment went up under Obama, and also believes that Obama was president at the time of the TARP bailouts, etc. This is also the same crowd that judges the merit of all policy proposals by how much they piss off “libtards”. Even if it hurts them personally, the angrier it makes liberals, the better.
