I have been keeping a close eye on the new proposed tax plan. I noticed in one article (Nov.18, Bismarck Tribune, Page A7) Rep. Kevin Cramer explained he supports the tax bill because middle income households and businesses can expect to have on average $2,287 more in their pockets per year under this new plan, enough to buy groceries for eight months.
I immediately took out my 2016 tax return (married, filing jointly). Line 37 (Form 1040) states, “This is your adjusted gross income” and from that figure I subtracted $24,000 (new standard deduction) to arrive at the taxable income. I then multiplied that figure times 12 percent. The amount I would pay under this new tax plan is $64 more than in 2016, a far cry from a tax cut.
A Tribune article on Nov. 3, indicated that the House tax proposal eliminates the “personal exemption” deduction, which was $4,050 per person in 2016. I have heard nothing about this from Cramer or Sen. John Hoeven. Apparently they don’t want us to know this until it becomes law. Consider the loss of $8,100, then this $24,000 does not seem so big because in 2016 we were allowed $15,100 standard deduction plus $8,100 personal exemption, a total of $23,200; this is only $800 less than we can expect in 2018.
It is disappointing to hear our GOP delegates and President Donald Trump brag about the “big tax cut” and in doing so they always point to the standard deduction as being so great, but they forget to tell us the rest of the story. What happens down the road?
Deductions on the chopping block are: sales and income tax, property taxes, medical expenses including insurance premiums, self-pay nursing home care including insurance premiums. As a senior citizen, this really concerns me. I fail to see the huge benefit for the middle class as promised.
Curtis Schulz, Bismarck