michel@inuxa.UUCP (Alan Michel) (07/03/86)
I read somewhere (maybe USA Today) that the new tax rates are proposed to start next July 1, but that the new rules on allowable deductions (whatever they may be) would start January 1. This sounds like they are trying to sneak in 6 months of non "revenue neutral" tax reforms. Anyone else know anything or heard anything about this? Kind of reminds me of our state's "temporary" income tax increase of a few years ago that no one (in the state legislature anyway) seems to remember was supposed to be temporary. Who knows, maybe they will "forget" to put the new rates into effect in July. Extra money is very addicting, especially to politicians in off election years.
joemu@nscpdc.UUCP (07/07/86)
> I read somewhere (maybe USA Today) that the new tax rates are > proposed to start next July 1, but that the new rules on > allowable deductions (whatever they may be) would start > January 1. This sounds like they are trying to sneak in 6 > months of non "revenue neutral" tax reforms. > Anyone else know anything or heard anything about this? > This is TRUE! My latest edition of Money magazine confirms what you heard. In fact a lot of people will actually pay MORE taxes under the "lower" rates. (because you loose 6 months of deductions while at the old "higher" rate) There was an example where a couple earning ~45k a year and currently paying ~32% taxes would pay ~34.5% under one proposal (house or senate) and pay ~36% under the other. It looks like a lot of us will really get screwed the first year and the second year will be when the real benefit of the tax reform will affect us (assuming they don't change it again next year). I can give the exact figures from the article if someone needs them or just pick up the magazine at the news stand.
thomas@utah-gr.UUCP (07/16/86)
Is it so surprising that some people will pay more under ANY tax change
(reform or otherwise)? Obviously, with the government in a deficit
position, they are not going to lower taxes (except with a maniac like
RR at the helm). So, if some pay less, some must pay more. For
example, it appears that, depending on which version (or almagamation)
passes, we may end up paying more or less. Exactly which, and how much
depends very heavily on the "pension" deductions (e.g., IRA, 401(k),
403(b)). In any case, assuming we decide not to make the "pension"
contributions if we will be taxed on the money, we will have more take-
home pay than before (but less retirement money).
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=Spencer ({ihnp4,decvax}!utah-cs!thomas, thomas@utah-cs.ARPA)