Category Archives: Tax Issues

“Tax cut” could taste like a Nothingburger for many middle-class taxpayers

Several clients asked me this past week what the Paul Ryan tax proposal announced by House Republicans would mean.

To use a phrase the White House might find familiar: For many taxpayers, it might be just a big Nothingburger.

Ryan says a typical middle-class family could save around $1,200 in taxes. What he doesn’t say is that a family with four children could wind up with a larger tax bill instead of a tax cut. If you have significant deductions for state and local taxes (which would no longer be allowed), property taxes (which would cap out at $10,000), and medical expenses and charitable contributions, your taxes might be higher instead of lower.

Who will definitely benefit: Corporations, which could see their top tax rate slashed from 35% down to 20%, and the wealthiest families, as the estate tax (which now applies to fewer than 6,000 estates annually, or only two out of every 1,000 or so estates) is eliminated entirely–good news if you have a relative who is worth more than about $6 million. Nothingburger for everyone else.

John Cassidy of The New Yorker does a nice job of summarizing the current state of play here, and Jim Tankersley of The New York Times shows how 13 million taxpayers earning under $100,000 would get hit with a tax hike under the Republican proposal.

Stay tuned.

ObamaCare tax prep requirements are catching subsidy recipients unaware

The Affordable Care Act made preparing and filing tax returns even more complicated last year (I know, you’d think that wasn’t possible) because of the gymnastics involved in running health insurance subsidies and credits through the tax code. Now we’re learning that thousands of people might lose their health insurance subsidies because they didn’t file… Continue Reading

Corporations say DOMA is a big tax hassle

I always say that everything’s about taxes. The current legal wrangling about gay marriage proves it once again. More than 200 companies have signed onto a brief filed with the Supreme Court saying that the Defense of Marriage Act has become an administrative hassle, forces them to discriminate against different classes of married employees, and… Continue Reading