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Tax Changes Have Some Homeowners Scrambling

Those in high-tax states might want to prepay their 2018 taxes this year
By John Johnson,  Newser Staff
Posted Dec 20, 2017 1:02 PM CST

(Newser) – Congress is done with its tax overhaul and President Trump is thrilled to be able to sign it into law. Now comes the real-world consequences for payroll companies, accountants, citizens, and even the IRS, as the scramble begins to put the wide-ranging new rules into effect in a mere 12 days, reports Politico. One tangible example: Some homeowners in high-tax states such as New York and New Jersey are trying to figure out whether they can prepay their 2018 property taxes in the current calendar year, to avoid sharp new limits in deductions under the tax plan.

  • Complicated: It could actually take years for the Treasury Department and the IRS to write the new rules for the most complicated changes, such as taxes on offshore business profits and pass-through businesses, per Politico.
  • Your taxes: The Washington Post has an interactive graphic allowing you to plug in basics including including income, location, and the amount typically itemized to see the plan's effect on your bottom line. (It notes, however, that many of the cuts affecting the middle class are not permanent.) Money looks at the impact under eight different scenarios, from wealthy homeowners in Manhattan to renters in Milwaukee.

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  • Unpopular: Two-thirds of Americans say the plan is designed to mostly benefit corporations and the rich, while only 7% say the same of the middle class, according to an NBC/Wall Street Journal poll. Overall, 24% of Americans say the plan is a good idea, and 41% say it's a bad idea.
  • Unhappy realtors: The Wall Street Journal breaks down the impact on various businesses, with realtors coming out as as among the biggest losers because of changes that curb the advantages of buying a home. On the other hand, retailers should be thrilled because of the big cut in the corporate tax rate to 21%.
  • ObamaCare: The legislation eliminates the individual mandate, and Money sees potentially big consequences for the Affordable Care Act. Healthy people might opt to skip insurance now that they won't be penalized for doing so, and insurers may raise rates to cover the sicker people who remain. Insurers also may drop out of the market rather than deal with such an "unpredictable consumer pool."

  • Rosie's offer: Rosie O'Donnell caused a stir Tuesday night by offering to pay GOP Sens. Susan Collins and Jeff Flake $2 million each to vote no. Later, she reiterated the offer to Collins in particular, declaring of Collins' support for the tax bill, “Woman, mother, grandmother, sister, daughter, you have betrayed us all.” As Newsweek notes, more than a few people online saw the offers as legit and think O'Donnell committed a crime.
  • Pros and cons: Paul Ryan makes his case in an op-ed in the Wall Street Journal, declaring, among other things, that "a family of four earning the median income of $73,000 can expect a $2,059 tax cut." He sees the legislation as "the most sweeping pro-growth reform of our tax code since the Reagan era—perhaps ever." For a counterpoint, see Will Wilkinson in the New York Times, who complains that the bill is "notably generous to corporations, high earners, inheritors of large estates and the owners of private jets." The headline accuses Republicans of showing "contempt for democracy."
  • The next debate: At the Washington Post, Heather Long writes that the debate to follow tax reform could be both ugly and consequential. That's because these tax changes worsen the national debt, and that will likely force questions in the near future on spending cuts and tax increases. "The debate could touch on some of the most value-laden questions facing the nation—what type of financial security to provide the elderly, what safety net services should be offered to the poor, and how much the government should try to shrink economic inequality."
(Read more tax code stories.)

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