Like many of you I’ve perceived that President Trump seems to be:
- narcissistic
- a pathological liar
- lacking in empathy
- a blowhard
- a bully
- a con man and a cheat
- a white supremacist
- racist and sexist
- xenophobic and…
- a sexual predator
But I’ve set a goal in trying to find at least one good thing in the people I most heartily dislike.
Trying to find something I could admire about Donald Trump has not been easy, but I’ve been doing my best. It’s taken me over a year—but finally I’ve seen something to admire about Donald Trump. It’s something I even envy!
Continue reading →
The GOP ‘tax reform’ bill in the U.S. Congress purportedly contains a clause that will raise the standards tax deduction rate from $6,300 to around $12,200. That’s almost double. Don’t think this will save you a huge chunk of money!
Doubling the Standard Deduction
This supposed benefit will kill off self-employment and Social Security with one stone. But not in one year. Only after years of erosion will working people realize how they’ve been tricked.
Doubling the standard deduction on federal taxes paid by employed and self-employed people will raise the US government deficit too. Who is going to make up for the loss of tax revenues from increasing the standard deduction? Certainly not corporations and not the tiny number of individuals making large sums of money off of investments and real estate.
The Impact on Self-Employed Workers
This year – with regular standard deduction
Let’s say a self-employed professional, such as a freelance book editor, or a beautician or bookkeeper makes $35,000 net business income this year.
Currently, a self-employed person we’ll call Jan, would have to pay 12.4% of $35,000 for SE (self-employment tax). That comes to minus $4,340 SE tax.
Deduct $4,340 for SE tax from $35,000 and we get $30,660. This is Jan’s net business income which goes on Form 1040 as personal income from business.
The present standard deduction on personal income is $6,300. So we subtract $6,300 from $30,660 and Jan has $24,360 taxable personal income.
Now subtract $4,500 for Jan’s individual personal exemption and Jan’s taxable income drops to $20,310
Jan’s $20,310 personal income is taxed at 15.3% and the government gets $3,107 in personal income tax from Jan.
Jan gets to keep $27,553 out of the $35,000 earned by the business ($30,660 after SE tax paid – $3,107 personal taxes)
Note: Self-employed persons pay twice as much SE tax as employees pay for FICA tax. Both taxes go toward Social Security and Medicare. (Employers pay for half of employees’ Social Security and Medicare taxes)
Self-employed people making under $127,200 a year of net business income must pay the full SE tax rate. However, the IRS does not levy income tax on the amount of earnings paid for SE tax. That would be double-taxation on the same money. Instead, self-employoed individuals get to deduct half of the SE tax from their net business income and half from their net personal income taxes.
Because self-employed pay the full SE tax, many self-employed persons will be far more negatively impacted by doubled standard deduction on personal taxes than employees. This bill will destroy many self-employed businesses. Continue reading →
Ten days ago, the Los Angeles Times posted an article, “California lawmakers upset that wildfire money is left out of White House’s disaster aid request” because none of the $44 billion asked from Congress for disaster aid this month is going to fund rebuilding California.
The article notes:
Every day, Mike Thompson [Napa Valley Congressman] hears a new story about how last month’s fires in Northern California have affected people’s lives. Insurance is being denied. Tourism is down. Some companies have laid off workers.
“Block after block of homes are wiped out and cars are melted down to their skeletal remains,” the Napa Valley congressman said of his travels in Santa Rosa over the weekend.
California had asked for $7.4 billion after receiving $576.5 million for wildfires in October. The $7.4 billion that California was denied would have included money for temporary housing for victims among many other things needed to restore the northwest part of the state. The only relief the White House offered was “tax relief for those affected”.
For those who lost everything, here is a list of things we received when were moved out of our home by our insurance company after water damage in 2002. (See our story in my post, “Fire and Water – How Can We Cope?”) Continue reading →