Will your federal taxes be going up or down next year?

[aygart]

It was you who said:
I do have a problem paying more to a corrupt, bloated, and inefficient government (but right now that's the best we have so I guess we have to pay something. I would much rather see a more efficient and fair tax regime based on consumption rather than income).

Consumption of what?

[ExGingi]

Consumption of what?

Goods (and possibly, but not necessarily services). Mostly something along the lines of a VAT.

Make no mistake. A VAT will be coming to the US sometime in the future. I'd rather it not be instated by proponents of big government.

[aygart]

Goods (and possibly, but not necessarily services). Mostly something along the lines of a VAT.

Make no mistake. A VAT will be coming to the US sometime in the future. I'd rather it not be instated by proponents of big government.

Why is that more fair? What difference does it make who instituted it?

[Work-for-ur-muny]

How do I delete?

You did something that reset the poll, but it didn't add the option of changing the vote. Whatever. It's ok. We already know how scientific DDF polls are.

[Denverite]

We’ll be going down significantly as will any small business owner who has an S Corp or LLC and has to currently pay for any annual profits at their personal income rate instead of letting any of it stay in the business. Also I can’t believe it’s not all over the forums but the senate version enables you to put money into 529 accounts (like an IRA for college expenses) and use that money for day school. If this part stays in the final bill, being able to pay tuition with pre-tax money will mean a ton for frum families!

[ExGingi]

We’ll be going down significantly as will any small business owner who has an S Corp or LLC and has to currently pay for any annual profits at their personal income rate instead of letting any of it stay in the business. Also I can’t believe it’s not all over the forums but the senate version enables you to put money into 529 accounts (like an IRA for college expenses) and use that money for day school. If this part stays in the final bill, being able to pay tuition with pre-tax money will mean a ton for frum families!

529 isn't pre-tax

[Denverite]

529 isn't pre-tax

Sorry, my mistake, the earnings from them is tax free.

[ExGingi]

Sorry, my mistake, the earnings from them is tax free.

And as some have pointed out, certain states do give a tax credit for 529 contributions up to a certain amount.

[Denverite]

And as some have pointed out, certain states do give a tax credit for 529 contributions up to a certain amount.

Right but right now it’s only post-secondary tuition now not for day school...

[skyguy918]

Sorry, my mistake, the earnings from them is tax free.

Actually, Colorado is the one of the few states that allows you to deduct the full amount of your 529 contribution from your state income tax (and probably the only one from that small group of states with a significant Jewish community). For example, NY's is limited to $10k per year per couple, and NJ doesn't have any deduction. You can now essentially pay your tuition state tax free.

They require you to put the money in their state plans, and I don't know if they're any good. It shouldn't matter though, as they have no holding period - you put the money in for a day to qualify for the deduction, and then withdraw it the next day to pay tuition.

[Denverite]

Actually, Colorado is the one of the few states that allows you to deduct the full amount of your 529 contribution from your state income tax (and probably the only one from that small group of states with a significant Jewish community). For example, NY's is limited to $10k per year per couple, and NJ doesn't have any deduction. You can now essentially pay your tuition state tax free.

They require you to put the money in their state plans, and I don't know if they're any good. It shouldn't matter though, as they have no holding period - you put the money in for a day to qualify for the deduction, and then withdraw it the next day to pay tuition.

You’re saying assuming they pass this tax law?  Because as I understand it now 529’s are only for post secondary costs.  Colorado also has great thing called the Colorado Child Care Credit that allows us to take 50% of many donations to Jewish institutions as a credit off our state tax and also since pre-school and kindergarten aren’t offered full day those expenses (up to a certain amount) can be taken as a childcare credit.

[skyguy918]

You’re saying assuming they pass this tax law?  Because as I understand it now 529’s are only for post secondary costs.  Colorado also has great thing called the Colorado Child Care Credit that allows us to take 50% of many donations to Jewish institutions as a credit off our state tax and also since pre-school and kindergarten aren’t offered full day those expenses (up to a certain amount) can be taken as a childcare credit.

Correct, if it passes it seems like you could make 100% of tuition state tax free, assuming you pass the money through the 529 to make it eligible for the deduction.

[Work-for-ur-muny]

Correct, if it passes it seems like you could make 100% of tuition state tax free, assuming you pass the money through the 529 to make it eligible for the deduction.

In "you," are you referring specifically to Coloradans, or anyone?

[skyguy918]

In "you," are you referring specifically to Coloradans, or anyone?

Colorado. And the same is true for any of the states that allow you to deduct the full amount of your 529 contributions from your state taxes. That doesn't include any other states that would be represented on DDF, but PA and IL have high enough limits that are per child (instead of per family) that they're just as good unless your tuition is really high ($20k for IL, $28k for PA). NJ, CA, and MA are among the states that have no 529 deduction, while FL and TX don't have state income tax in the first place.

http://webcache.googleusercontent.com/search?q=cache:BW5ULc57WuMJ:www.finaid.org/savings/state529deductions.phtml+&cd=3&hl=en&ct=clnk&gl=us
(the actual link wasn't showing data in the table so I'm using a cached version)

[aygart]

Why is that more fair? What difference does it make who instituted it?

@ExGingi BUMP

[GTR]

Probably down a tiny amount.  Looking at prepaying property tax now.

[username]

How do I delete?

I can do it for you. Whats your password?

[skyguy918]

For those in NYC, how much property tax can you prepay? Is it only what you've been billed already? I get billed mid-year, with quarterly payments listed, and then an update before end of year changing the amount of the last 2 payments. I just sent those last 2 payments now, but I'm wondering if I can prepay more than that.

[ExGingi]

Why is that more fair? What difference does it make who instituted it?

A consumption tax is more fair than an income tax, as it doesn't tax productivity (and in a discriminatory way - as the current code does) but rather equally tax everyone based on how they choose to use their money. No one has any use for money, but only for what it buys.

If a VAT is instituted by big government proponents, it is not likely to replace income or payroll taxes, but to find a way to generate more revenue for their pet projects, and is likely to be instituted in some kind of a discriminatory way.

[aygart]

A consumption tax is more fair than an income tax, as it doesn't tax productivity (and in a discriminatory way - as the current code does) but rather equally tax everyone based on how they choose to use their money. No one has any use for money, but only for what it buys.

If a VAT is instituted by big government proponents, it is not likely to replace income or payroll taxes, but to find a way to generate more revenue for their pet projects, and is likely to be instituted in some kind of a discriminatory way.

A VAT will tax a higher percentage of the income of the lower classes since they spend more of their income unless distinctions are made for types of consumption. It taxes productivity more so than income in a sense since it is the economic activity itself.

Who enacts it has little to do with how it ends up. The current income tax system was enacted at 1%. Once it is enacted with bipartisan support now the spenders can do with it as they please.