https://www.forbes.com/sites/anthonynitti/2017/09/27/release-of-gops-long-awaited-tax-plan-reveals-exactly-why-tax-reform-is-so-hard/#380ba7604597What Makes It Hard? You may have noticed, however, that in the second example, I did not further reduce the taxpayer's income by the $4,050 personal exemption. This is because as part of the new framework, the GOP intends to do away with the deduction currently allowed to each taxpayer, his or her spouse, and each dependent child. Interestingly, by eliminating the personal exemptions, there will be a "tipping point" where large families would have been better of under current law, with a standard deduction of $12,700 (for married couples) and personal exemptions of $4,050 for each family member over the proposed standard deduction of $24,000 with NO personal exemptions.
To illustrate, assume a married couple with four children earning $40,000. Under current law, taxable income would be reduced by a $12,700 standard deduction and six personal exemptions for a total of $24,300, resulting in taxable income of $4,000, and a tax bill of $400.
Under the new framework, however, this same family would reduce income by only the new $24,000 standard deduction; no personal exemptions would be permitted. As a result, taxable income would be $16,000, and with the new bottom rate of 12%, this family would pay tax of $1,920, or $1,500 greater than under current law.
it appears, however, that the new framework is trying to ameliorate the impact of this tipping point by accommodating for the loss of personal exemptions by creating an enhanced child tax credit and even a $500 credit for non-child dependents, like an elderly parent. How much these credits help, however, won't be clear until more detail is provide as to just how they'll work. It is also very important to note that these changes to the tax credits don't appear to increase the amount of any credit that is refundable; as a result, if a low-income taxpayer has no tax liability, this won't increase the amount of their refund. Thus, the lowest-income of taxpayers will not be harmed by the changes, but won't benefit either.
SO PERHAPS WITH A $500 CREDIT FOR NON-CHILD DEPENDENTS, IT MAKES IT A BIT EASIER TO SWALLOW FOR LARGE FAMILIES?