Show HN: Tax plan impact calculator
taxulator.com
taxulator.com
Its author, Maxim Lott, is a journalist and has been tweaking the calculations over the past couple of weeks reflecting the latest changes in the bills. You may have seen his predictive markets analysis site [1] in the run up to 2016 US Presidential Election.
As a matter of disclosure, the author is a friend and I helped him debug a couple of small issues.
"No impact from end of state and local deductions"
Same at $30k, $300k, and $1M. I don't think it's accounting for SALT at all.
The problem with a lot of reporting on these tax “plans” is that it doesn’t take into account the massive cuts that’ll be needed once this thing gets passed.
That and any increases to health insurance costs due to repeal/uncertainty/etc wipe out any saving for most people.
But hey if I could lobby this easily to get my pet thing into a tax bill I would.
Wildly incorrectly. I live in WA and it overestimates my sales tax deduction by a factor of ten.
It also doesn't include the Senate's AMT change at all.
It doesn't seem to include PEP or Pease.
Edit: The more I play with this, the more flaws I find. I work at a tax policy think tank and I've been involved with more than a few tax calculators, and this one isn't reliable. It fails basic tests, like applying the standard deduction if itemized deductions are less than that amount.
Second edit: Here's a tip. It's a lot easier to calculate marginal rates on income if you go through the brackets backward rather than forward. That way, you just check if income is >= the current bracket threshold. If yes, subtract threshold from income, add that multiplied by the rate to the running total of taxes owed, and move to the next bracket. Else, just move to the next bracket. Way easier than what you're doing.
Re tax brackets, we are looking to add state tax soon so it is much easier not to hardcore the running totals. The computation time is insignificant but code is cleaner with our current method, IMO.
Yeah, this is the difference between the calculator showing a $2K tax hike for me, and a $2K cut.
I don't believe the AMT exemptions you're using are correct (although they are widely reported). The bill updates the "original" AMT amounts from 2012, which need to be inflation adjusted.
I made these accurate graphs that include everything. They also compute your state taxes for you.
Senate: https://jsfiddle.net/4ec6eLz5/ House: https://jsfiddle.net/bsjryfLo/
Re AMT, When I read the bill my interpretation was that the new levels were the correct numbers for 2018 and increase from there. I’m certainly not a lawyer and relied on other ‘widely reported’ interpretations. Given how many reported things turned out to be at least moderately innacureatr when we did fact check them, it would not surprise me if you are right.
I really like your site and the graphs. The fixed property tax deduction seems like a limitation (I personally pay close to 2x your NY rate and have some friends who pay more) but it certainly does some things that we don’t, Pease included. Had I found your site a week ago we likely would have had to build our own!
We made our code available on GitHub so by all means feel free to contribute and improve it if you like!
This means the "40%" figure being thrown around is off, it's only a 30% reduction
edit: should have included property tax, which is more of an issue than mortgage interest for existing homeowners.
https://github.com/nick264/gop-tax-plan-calculator/blob/mast...
Cannot speak to the soundness of the calculations, but there looks to be a ton of guesswork involved, and it does seem fairly simplified in light of the size of the bills being considered.
I wish we had documented every hard coded number with a source but we only started doing that at the very end of project when we were reconciling different sources. We plan on documenting everything going forward with a source.
If you want to influence the outcome of what is in the tax bill, then finding the thing in it that you don't like the most (and preferably it is in only in one of the bills) and advocating for that to be removed or changed is probably the most useful. Academia was up in arms about losing its special tax break on tuitions (only in House bill), got a bunch of press, and it looks like that might be left out in reconciliation.
But take any of these with a huge grain of salt, because expats have very different rules to play by, including some generous exemptions.
$6300 was the single filer standard deduction amount from 2016. It shows different outputs when toggling between itemized and standard deduction.
I recently started working on something similar: http://politisee.com, with a little different goal. Rather than calculate the net result for a single person, Politisee for a single person, Politisee tries to summarize and compare plans, and shed light on how they perform broadly to society (i.e. at all income levels). However I do plan to add the personal side too. For now I'll be linking to yours.
One of the challenges of the broad approach is getting everything into an apples-to-apples comparison. I'm definitely going to be taking some inspiration from your work.
Every calculator on here gives a different result though.
Or is it that Trump, like Reagan, is about to grow the US debt by untold amounts?
The US is heading toward trillion dollar deficits no matter. There's absolutely nothing that can stop that, unless someone wants to dramatically slash entitlements - which is never going to happen. You can't raise taxes on the rich enough to find $1 trillion in new revenue. To plug the hole with tax revenue, it'll be necessary to dramatically raise taxes on everyone in the top 50% income wise, matching what other advanced welfare states do in taxing the middle class a lot more by necessity to pay for entitlements.
The annual tax cut cost is going to be about $150 billion per year, roughly $1.5 trillion over the next ten years, assuming mediocre revenue gains from it. The eight Obama years added about $9 trillion in new public debt, and the US got absolutely nothing from that vast fiscal destruction (other than further eroded infrastructure, a mostly horrible healthcare plan, a trillion dollars in new student debt, zero gain in the median American net worth figure, and the greatest wealth gains in US history by the rich).
You can't actually think $150 billion per year matters any longer. It's dramatically beyond game over for the US fiscally. Nobody even dares to bring up the idea of paying down the debt now. It's the Japan debt scenario full steam ahead, $30 trillion in public debt by 2027 no matter what happens. That means permanently low Fed rates, because the US will never be able to afford the interest on $30+ trillion otherwise.
I'll take the 20% corporate income tax rate in exchange for the $150 billion per year cost (plus the big jump in the standard deduction); the $150 billion thrown onto the burning fiscal picture that started with the Bush years, got dramatically worse with the Obama years, and is going to continue through the Trump years, is simply meaningless at this point.
As for the Reagan reference in the parent comment, that's sort of a common comparison to criticize Republican tax (and often defense) policy since the 80s. There is somewhat of a common trend of cutting taxes far more than spending and increasing military expenditures simultaneously. Bush was a much worse offender here though, with Iraq and Afghanistan.
And are you just referring to the individual mandate change? Or are other big parts of the safety net changing from this bill?
(And yes, I understand the long-term policy and political implications, but I’m asking about specific immediate changes in this bill)
https://www.washingtonpost.com/amphtml/news/wonk/wp/2017/12/...
Now, knowing republicans that's not how it will pan out though. They aren't known for making smart cuts, they typically reduce benefits/expenditure while keeping profiteering in place.
We have a progressive tax system, so rich states should be paying more than they receive in federal funds.
The more relevant question is how do the Atlantic's charts look once you correct for income levels? Given that CA's returns are barely less than 1, I suspect that CA is in a situation where the tax deduction is effectively allowing the federal government to subsidize the state.
If you are tired of paying state tax WA/TX/FL all have large liberal cities that have a good amount of STEM jobs...
If $10000 is your tax liability, then a $10000 deduction is worth only your marginal rate * amount of the deduction, because a deduction reduces your taxable income prior to figuring out liability. (A tax credit is a dollar for dollar reduction of a tax liability.) Assuming 25% bracket, then a $10000 deduction for SALT is worth $2500 off your federal taxes.
This is a "soak everybody not wealthy enough to make substantial donations to us" plan, basically.