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Senate Tax Bill will hurt Mormon tithe payers

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12 minutes ago, cinepro said:

The proposed change to the mortgage-interest deduction only takes effect at $500,000.  

The mortgage interest deduction has the ultimate effect of making housing prices higher.  It's really just a government (and tax-payer) subsidy to the real estate industry.  That's why they're freaking out about it.   Home buyers don't currently actually save any money; they just pay a higher price in the sale to compensate for paying lower taxes in the future, and this higher price benefits the real estate industry since it gets paid based on the sale price, and screws the people who don't itemize their deductions (usually lower-income workers) because it's higher-income people who typically itemize.    

Since the current interest deduction is "baked in" to the prices people have currently paid, it would be most fair to eliminate it for mortgages going forward so prices can adjust (downward) accordingly.  

It's getting rid of personal exemptions that will hurt the most. 

Edited by bsjkki
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32 minutes ago, bsjkki said:

A $300,000 home in my area is a 2 bedroom, 1 bath starter home or condo and $80000 is a near poverty income due to the cost of living so your attitude about being fine with these young families taxes going up is sad.

You are kidding...really??  What kind of acreage...??

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1 minute ago, Jeanne said:

You are kidding...really??  What kind of acreage...??

None...we've had a run up in prices the last 4 years and many young families in my ward can not get a house and pay more in rent for an apartment than I pay for my home. It's sad. 

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3 minutes ago, bsjkki said:

None...we've had a run up in prices the last 4 years and many young families in my ward can not get a house and pay more in rent for an apartment than I pay for my home. It's sad. 

Wow...I just can't imagine this.  I still kind of struggle on my own little place.  My tax man is quite a professional and itemizes everything for me which has saved me a lot of money.  Plan to retire soon so this tax stuff is important to me...tithing or not.

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30 minutes ago, Robert F. Smith said:

Yeh, if you are young and healthy.  However, if you have high medical costs, mortgage interest, and large charitable contributions (Mormons have the highest in the nation), then it makes perfect sense to itemize.  The Republican rationale has always been to encourage private charity, rather than dependence on govt charity, so why discourage private charity in this way?

Even when I was young (I'm still healthy) I depended on deductions from mortgage interest and charitable giving (tithing) to help make ends meet.

This will impact me less now that my home mortgage is paid off, but I pity those who are still early-on in their mortgage payback.

Furthermore, the Church stands to receive less in fast offerings and other charitable offerings such as humanitarian and missionary funds. If you're trying to make household ends meet, its a zero-sum game, and you'll have less disposable income for charitable giving after you've paid your taxes and less incentive for charitable giving if there is no tax deduction for it.

 

Edited by Scott Lloyd
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If the government is going to do this, it needs to remove the cap on flexible spending accounts that was instituted as part of Obama Care. People should not be taxed on the money they spend for health care.

 

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16 minutes ago, Scott Lloyd said:

If the government is going to do this, it needs to remove the cap on flexible spending accounts that was instituted as part of Obama Care. People should not be taxed on the money they spend for health care.

 

I would love this! Health care now costs so much, people should be able to deduct their expenses--especially since Obamacare capped FSA spending. 

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1 hour ago, Robert F. Smith said:

Yeh, if you are young and healthy.  However, if you have high medical costs, mortgage interest, and large charitable contributions (Mormons have the highest in the nation), then it makes perfect sense to itemize.  The Republican rationale has always been to encourage private charity, rather than dependence on govt charity, so why discourage private charity in this way?

One year, I think it was the birth of our third child, we had all three: mortgage interest, high mecical costs (in addition to my wife's already high costs), and high charitable donations. So don't get me wrong, despite my view that the tax code gravely needs simplification, I very much favor itemization, even tithing. I think too many Republicans have bought into the, cuts for the rich attacks and are scrambling to find ways to pay for the tax cuts. Eliminating itemization is one way they are trying to do it. That will hurt the middle class. 

Edited by Darren10
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26 minutes ago, Scott Lloyd said:

If the government is going to do this, it needs to remove the cap on flexible spending accounts that was instituted as part of Obama Care. People should not be taxed on the money they spend for health care.

 

Totally!

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22 minutes ago, Scott Lloyd said:

Even when I was young (I'm still healthy) I depended on deductions from mortgage interest and charitable giving (tithing) to help make ends meet.

A sad commentary on today's society.  I just completed 12 weeks course on Financial Self Reliance in my stake.  I learned quite a bit.  One major counsel is to be strict about living within your means.  That requires preparing for as good of a career as you know how and optimize your income (reasonable level to counter competition).  With that in mind, find a house that is fairly modest without extravagant upholstering and used vehicles.   Should be able to have an enjoyable life with family in an independent manner.   Budgeting is important in avoiding surprises and bondage.

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34 minutes ago, Gray said:

The answer is the GOP is trying to reward their wealthiest donors with an extravagant gift, at the expense of most of their constituents. Also, they're almost entirely bereft of leadership.

"the GOP is trying to reward their wealthiest donors with an extravagant gift, at the expense of most of their constituents" - I hope not. Who would these be?

"Also, they're almost entirely bereft of leadership." - You got that right. 

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16 minutes ago, bsjkki said:

I would love this! Health care now costs so much, people should be able to deduct their expenses--especially since Obamacare capped FSA spending. 

I have not had healthcare for almost ten years since I cannot afford it so I've become unfamiliar with its particulars. I do understand that all medical costs, premiums and any out if the pocket expenses are deductable but they have to be a certain percentage of your adjusted income for them to be itemized. I oppose capping FSA expenses as tax deductible but how much has it been under Obamacare? 

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7 minutes ago, Darren10 said:

I have not had healthcare for almost ten years since I cannot afford it so I've become unfamiliar with its particulars. I do understand that all medical costs, premiums and any out if the pocket expenses are deductable but they have to be a certain percentage of your adjusted income for them to be itemized. I oppose capping FSA expenses as tax deductible but how much has it been under Obamacare? 

$2500 and now $2600. With Obamacare’s heigher deductibles and higher out of pocket maximums, having this capped hurts those with chronic health conditions. 

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7 minutes ago, bsjkki said:

$2500 and now $2600. With Obamacare’s heigher deductibles and higher out of pocket maximums, having this capped hurts those with chronic health conditions. 

So, anything above $2600 is not deductible? No doubt it would hurt those with high medical costs. 

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16 minutes ago, Darren10 said:

I have not had healthcare for almost ten years since I cannot afford it so I've become unfamiliar with its particulars. I do understand that all medical costs, premiums and any out if the pocket expenses are deductable but they have to be a certain percentage of your adjusted income for them to be itemized. I oppose capping FSA expenses as tax deductible but how much has it been under Obamacare? 

If you are healthy, with the high costs now, you are better off putting money away for health needs. If they get rid of the Obamacare tax penalty that is not doing what it is designed to do but hurting the working poor, that would also help you with the Senate tax bill. It does help those who do not itemize by raising the standard deduction and possibly getting rid of the Obamacare penalty.

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Just now, bsjkki said:

If you are healthy, with the high costs now, you are better off putting money away for health needs. If they get rid of the Obamacare tax penalty that is not doing what it is designed to do but hurting the working poor, that would also help you with the Senate tax bill. It does help those who do not itemize by raising the standard deduction and possibly getting rid of the Obamacare penalty.

http://www.washingtonexaminer.com/trump-readies-executive-order-to-unravel-obamacares-individual-mandate-gop-senator-says/article/2639728

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So, I've been researching some more after reading The Hill article and some things are not as bad as I thought but still concerning. They do change the Child Tax Credit age limit from 17 to 18 and also raise the amount from $1000 to $2000. They also get rid of the income cap so you can claim this deduction even if you make over $110,000. It also adds a credit for dependent children over 18 of $500. Personally, I will still lose but it is going to effect less people. Those who itemize and don't have children will pay more. The details are not worked out completely though so maybe it will work out. https://www.forbes.com/sites/ryanellis/2017/11/16/top-five-ways-the-senate-tax-reform-bill-cuts-taxes-for-middle-class-families/2/#351f15513f2a

Edited by bsjkki
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2 hours ago, Scott Lloyd said:

Furthermore, the Church stands to receive less in fast offerings and other charitable offerings such as humanitarian and missionary funds. If you're trying to make household ends meet, its a zero-sum game, and you'll have less disposable income for charitable giving after you've paid your taxes and less incentive for charitable giving if there is no tax deduction for it.

Not if you pay tithing on your gross as you are paid . . . :) 

While eliminating exemptions and deductions could possibly affect tithes and offerings for some people, it really shouldn't, should it? Your tithes and offerings shouldn't be dependent on whether or not you get a tax refund subsidy. 

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The world is crashing in upon us.  There's nothing we can do, but hope and pray. 

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41 minutes ago, rongo said:

Not if you pay tithing on your gross as you are paid . . . :) 

 

Which I do. I don't see what that has to do with my post.

Quote

While eliminating exemptions and deductions could possibly affect tithes and offerings for some people, it really shouldn't, should it? Your tithes and offerings shouldn't be dependent on whether or not you get a tax refund subsidy. 

I've already said you should pay tithes no matter what. That's a straw man argument.

But offerings (fast offering, humanitarian services, missionary, etc.) are another matter. You can pay as much or as little as your means allow. And it stands to reason that your means are going to determine how much you pay and that tax deductions are going to be an incentive to pay in the first place or to pay more if you can. That's only common sense. Just because you (apparently) have never bothered to itemize, that doesn't mean that others haven't or that it isn't a prudent thing to do.

 

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2 hours ago, longview said:

A sad commentary on today's society.  I just completed 12 weeks course on Financial Self Reliance in my stake.  I learned quite a bit.  One major counsel is to be strict about living within your means.  That requires preparing for as good of a career as you know how and optimize your income (reasonable level to counter competition).  With that in mind, find a house that is fairly modest without extravagant upholstering and used vehicles.   Should be able to have an enjoyable life with family in an independent manner.   Budgeting is important in avoiding surprises and bondage.

I agree with all of this, but it is not a good argument against having tax deductions for charitable giving and mortgage interest. Many, many people need them even as they budget.

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Let's see the list of things that will hit me in the pocketbook -

- No more charitable deduction? Check.

- No more medical expense deduction (I've gone out of pocket $30k in each of the last three years fighting my kids' illnesses)? Check.

- No more mortgage interest deduction? Check.

In short, I'm screwed.  I have a six-figure income and can make more adjustments than the average citizen, but I'm certainly not being spared the pain.

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