Lee Wochner: Writer. Director. Writing instructor. Thinker about things.


Tax change

After filing my taxes next year, I’m wondering if change is all I’ve have left.

I say that because I met with my CPA today, and it seems that whatever tax maneuvers I was able to do before no longer apply. The good news (for me):  Because I own a business, I should qualify for a deduction on pass-through income. This is the thing that was added in the compromise legislation — so now I guess I owe Senator Bob Corker, who held out for this, a thank-you (even though I’d prefer to see him in prison for self-dealing). The bad news (for me):  My state and local taxes, and my mortgage interest, are no longer deductible. (And surely it’s coincidental that these provisions mostly affect such states as California, New York, New Jersey, and Connecticut, for example, which reliably vote Democratic. But I digress.) Minimum, my federal taxes are estimated to go up $1200 just because of losing that interest deduction.

So much for the tax “cut.”

Other elements of this are head-scratchers:

  • For some reason, the pass-through income deduction applies to product-oriented businesses, but not services. So if you’re an accountant, lawyer, doctor, or Indian Chief, no deduction for you. But if you’re manufacturing mousetraps, sure, you get the deduction. What exactly could be the rationale behind this? Except punishing service providers? And if so — why?
  • In 2018, entertainment deductions are no longer allowed. I’m shocked this made it through. Really? All those K Street lobbyists won’t be able to deduct their pricey lunches and dinners and travel and concerts and so forth? How did they miss this? Had they known, they never would have let it happen.
  • Also, medical and dental expenses aren’t deductible the way they were. Two years ago, I could have bought a good used car for what I spent on the interior of my mouth — and that’s not even with counting the agony that came with it. I got two kinds of relief:  When the pain finally subsided, and when I got a deduction for it. So:  Let’s strip out the Affordable Care Act as best we can, piece by piece — and let’s also limit or remove people’s deductions for medical expenses. One or the other change might make sense, but doing both just seems punitive.

I’m not opposed to change, but, in general, I like change for the better. This was supposed to be a simpler tax code that jump-started the economy. Just about nobody believed that, including the people who said it. For one thing, the economy is doing fine. For another, if you suck $1500-$5000 extra out of my finances, and then you multiply by the number of people like me in those blue states where we actually financially support the federal government (unlike, say, Alabama, Mississippi,Oklahoma and all the other red states that cost the feds more money than they send), what you’re actually doing is depressing our spending ability — which shrinks the economy.

I do wonder just how much informed thought went into this by our selected officials and the corporate overlords who own them. To wit:  Have they asked, if we all die sooner without health care, who’s going to support the 1%?

One Response to “Tax change”

  1. Dan Says:

    When you give more $$ to the Rich, you’re “providing inventive for the job creators.” Give it to the poor and working class, and it’s “welfare.”

Leave a Reply