LogFAQs > #900623705

@EternalDivide posted...

We'll unless you're telling me numbers lie and that those extra dollars in that check I got are somehow imaginary. Then I'll go ahead and fall for that so called republican bs.

FYI, the tax bill did several things that work against your interests:

1) It made the increase to your standard deduction temporary, it expires in ten years and you will go back to your old standard deduction.

2) It made the gradation method used to increase the income thresholds in the IRS tax table that determines your effective tax rate on your taxable income use a reduced inflation model, so more of your money will be taxed at higher rates over time.

The effect of 2) is gradual and zero at tax bill start, so upfront it will seem like a cut. But current you is borrowing from future you, who will pay a higher percent of your taxable income as federal income tax. And the standard deduction that would offset it will expire, leading to an overall tax hike that is gradually phased in.

These made the net cost of the cut to your income tax nearly zero to the government, and freed the bill's 1.5T budget to focus on permanent corporate tax rate cuts that are not offset by anything.

I think it's important that taxpayers understand what to expect on future tax returns so they are not caught owing a penalty.
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