This bill changes personal income tax base from federal taxable income to federal adjusted gross income by eliminating allowance of itemized deductions, taking 33% of IRS standard deduction, and decreasing tax rates. Applies to tax years beginning on or after January 1, 2018.
Personal Choice and Responsibility
It broadens the base of personal income taxes and reduces the tax rate. But this can be a significant increase in taxes for an individual with a medium income that has high medical bills, property taxes, a mortgage interest and/or gives generously even with the tax reduction. For a $70,000 income, the new tax rate would save $1,400 and adds 33% of standard deduction – about $2,575, creating a negative from current of $1,175. This ignores itemized deductions, which would have added a greater deduction to the taxable income. For a $70,000 income the national average itemized deduction is $19,588, and the national average medical expenses for this amount is $9,702, which results in a tax savings that far exceeds the $1,175 from this bill..