U.S. Budget and Economy

On November 16, the Senate Committee of Finance advanced the "Tax Cuts and Jobs Act" out of committee. Information on the plan is posted here , including a link to Taxpayer Examples . The first two of those examples are for a "Family of four earning $73,000" and a "Single parent with one child earning $41,000". I've created an R Shiny application which can interactively show the tax savings for these two examples and other variations. That application can be accessed at this link . Selecting "Example 5 - Family of Four (Senate)" in the "Tax Examples" select list causes the following table and plot to be output: Example 5 - Family of Four Earning $73,000 Per Year Names Taxes Released 1 Current 2017 3682.50000 3683 2 Senate 2018 1499.00000 1499 3 Change -2183.50000 -2184 4 % Change -59.29396 nearly 60 percent The "Taxes" column are the nu...

As shown at the end of my last post , Example 4 released by the House Ways and Means Committee gives a tax increase if the wages are reduced to $45,000. This reveals an important point. It isn't just taxpayers who lose their deduction for medical or state and local taxes who can end up paying more in taxes. That appears to also occur for lower-wage workers who have no children but already have as many itemized deductions as the new standard deductions, even when they can still take those deductions. The following tables and plots show the change in taxes for such taxpayers, single and married, under the House and Senate tax bills. They were generated by selecting Examples A and B in the interactive application at this link . Example A - Single Person Making $25,000 Per Year with $12,000 in Deductions Example B - Married Couple Making $50,000 Per Year with $24,000 in Deductions House Senate ...

On November 2, a press release from the office of Speaker Paul Ryan announced the introduction of the Tax Cuts and Jobs Act. It begins as follows: Today, House Speaker Paul Ryan (R-WI), Ways and Means Committee Chairman Kevin Brady (R-TX), and other members of House leadership and the Ways and Means Committee introduced the Tax Cuts and Jobs Act—bold legislation to overhaul America’s tax code for the first time in 31 years. With this bill, a typical middle-income family of four, earning $59,000 (the median household income), will receive a $1,182 tax cut. At the end of the release is a link to descriptions of this and several other examples of how the proposed tax cuts would save money for various types of taxpayers. I've created an R Shiny application which can interactively show the tax savings for the first four examples and other variations. That application can be accessed at this link . Selecting "Example 1" in the "Tax Examples" select list causes...