The IRS vs. Trump

I've been brushing up on the various tax laws in preparation for my annual work as a tax preparer--which I didn't do last year, but I've done off and on since 2003. It's a great side gig and these days, I can do everything online--and on the weekends, so it doesn't interfere with my regular work.

Here's one very surprising twist. Everybody knows that Trump's tax giveaway for the rich bill (effective 2018) cut taxes in half for big corporations and the wealthy. Of course, this led to a huge deficit, which hasn't bothered Republicans until recently, when they've put back on their "fiscal prudence" hats for the sake of opposing Biden.

Many of the so-called Tax Cuts and Jobs Act (TCJA) provisions were specifically targeted at areas of the country Trump hates. For instance, the removal of the SALT deduction (state and local taxes) seriously affected wealthy states with high taxation, such as California (Trump's ultimate boogeyman state) and New York. Other provisions, such as the sharp restriction of charitable contribution deductions, fucked over different groups, such as the poor, whom Trump has always hated. There were a LOT of breaks, however, for big businesses. There was also petty, spiteful shit, like the removal of a $20 tax deduction for people who bicycle to work.

What I was VERY surprised to learn is that the IRS has, during the last two years, been quietly rescinding dozens of the provisions of the TJCA, one by one, including during 2020, the last horrible year of the Orange Turd's reign. Now, normally, those changes would have been noticed by the White House and an executive review could have been ordered. But as we know, Trump spent the entirety of 2020 plotting his reelection, planning an insurrection if he lost, and jerking off to Fox News until three in the morning. He was unaware that his bigly tax accomplishment was being taken apart, piece by piece.

The most impactful part of the TJCA was the reduction in corporate and wealthy tax rates, and that will probably be at least partially reversed if and when some version of the infrastructure bill is passed. But I was surprised to learn that the IRS has been chipping away at the TJCA for years. I imagine that tax filing compliance plummeted after the TJCA, in effect, took away almost all itemized deductions, including medical, mortgage interest, casualty and theft loss, etc. (Those still exist to some extent, but in greatly diminished form.)

Who knew they were on our side? Maybe there was some fighting between the IRS and the White House. Maybe Trump tried to order them to impose a 50% tax on Democrats, or to raise the tax rates imposed on black and Hispanic people, and they resisted. Maybe Trump asked them to somehow interfere in the counting of ballots, and they told him they had nothing to do with elections (Trump wouldn't necessarily have known that). In any event, during the Turd administration and continuing today, the IRS has been quietly rescinding the most ridiculous and unfair provisions of the TJCA, and that's good news.

More fact twisting, pot stirring  "maybe, maybe, maybe" bullshit from Kevin.

I hope you are right, particularly for our household in terms of taking away itemized deductions.  Husband buys tools and other job needs out of his own pocket.  Removal of that deduction HURT us pretty bad.  State deductions helped a little, but again, ouch! 

Candy

Lam has more jobs than Walter Mitty.

Another lam lie over the deductions.  You can either take deductions or the standard deduction, whichever is greater.  Most people come out ahead with taking the standard deduction & when combined with lower tax rates people pay less taxes.

Tax revenue also increased, the problem was that spending went up faster.

Do you file Schedule C? Or is he plain old employed? I ask because you can still expense the shit out of everything if you have a business--because the TJCA contained a LOT of business-friendly provisions. They couldn't figure out a way to avoid helping small businesses in the process.

It was really quite the shell game. The personal deduction was doubled, but stripping away itemized deductions meant that the average Joe's tax bill actually went up. The overall effect was a 2% increase in federal taxes for those making less than $250,000 a year. So yeah, "tax cut."

I suppose your husband tried asking his employer for reimbursement for those expenses once he could no longer deduct them? Because that rule change effectively diminished his pay. I think his employer is obligated to no longer compel him to eat those costs. The 2% of AGI rule, plus the way itemized deductions have changed, means that those expenses are borne by the employee. Perhaps his employer doesn't even realize that? It wouldn't hurt to ask.

The good news, on a relative basis anyway, is that the provisions of the TJCA expire in 2025. But if we have Republicans in control at that point, they'll just ram through an extension. Once of their most fiercely advocated positions is that corporations shouldn't pay taxes. We'd have to pry that position out of their cold dead fingers.

"the removal of the SALT deduction"

Wrong again, it was not removed but capped at $10,000.

You can take the higher standard deduction or itemize, whichever is greater.  Combined with lower tax rates simply math says people pay lower taxes.

I feel sorry for the people you do taxes for

There's nothing to dig into the weeds about.....the impact of the Trump tax cuts were either nothing or negligble to the overwhelming majoirty of people in the middle class or below.   Thats by their own testimony.     And Thats why Republicans had to go into the weeds with their team of accountants and spell out how people actually saved $50 on their tax bill.     Whoop-d-doo !

The big savings was for the groups Republicans always cut taxes on....and then dont reconcile in the budget.   So we now have a recod number of corporations paying ZERO federal income tax in addtion to the billionair class paying fewer cents on the dollar in taxes than I do.

And in Donald Trump's case there were multiple years where I didnt only pay a higher percentage of Federal Income tax than he did....I actually paid more tax in sum dollars than he did.    

But you reap what you sew.     If AMerica puts a scummy tax cheat in charge of tax policy you get screwed.    

Kevin, I've pointed this out to you ten times and you choose to ignore the truth.  Tax revenue increased after the tax cuts just as promised by Trump.  If you care about the truth, it's very easy to confirm.  You obviously don't care about the truth, or you would have researced tax revenues under Trump the previous nine times I explained the situation.

Next Kevin will tell us that tax revenues fell under Regan.

Kevin  ALWAYS twists the truth when making lying accusations. He trolls, always posting inflammatory content in order to 1) incite ,2) grant him a platform to argue, debase, and spew his never ending lies. When called out, he attacks anyone who proves he is lying. He is what is wrong in America.

It was also "capped" on the lower end at 2% of AGI. The result was to screw taxpayers in Democratic states, which was the intention.

You're far too ignorant to understand why it became much harder to itemize deductions, and how that jacked up everyone's tax rates.