In another anti-family move, the Noem/Trump tax cut bill threatens to reduce the money divorced couples have available to support their divided families by eliminating the alimony deduction.
Under current law, a divorced spouse who pays alimony can deduct the amount paid from taxable income. A divorced spouse who receives alimony reports the amount received as income and pays income tax thereon. Section 1309 of the bill passed by Rep. Noem and the House GOP yesterday reverses that situation: the alimony payer would pay the tax, and the alimony recipient would not count that alimony as taxable income.
Now considering that alimony done right should be payments from the wealthier spouse to the less-well-off spouse, then in many of the twelve million cases in which the alimony deduction was claimed in 2015, taxing the payer rather than the recipient will result in that income being taxed at a higher rate:
In a hypothetical example, a man making $90,000 this year and paying $20,000 in alimony would get to subtract the $20,000 from his income, lowering his tax bill by $5,000 to $13,245, according to the IRS draft tax table for 2017. His ex-wife would pay about $2,500 in taxes on the $20,000, but no taxes under the House GOP plan [Dave Collins, “Divorcees Warily Eye GOP Plan to Cut Alimony Deduction,” AP via San Francisco Chronicle, 2017.11.16].
Ending the alimony deduction means on face that the government takes more resources away from families who happen to have parents not living together any more. But in practice, it means that the wealthier spouse will fight in court to avoid that increased tax liability by paying less alimony, meaning that, even with the reduction in tax liability, less-wealthy spouses will likely end up with less support.
The current system appears to encourage wealthy divorcees to provide more support to their former partners. The House tax bill undoes that incentive, thus hurting less-wealthy divorcees’ ability to get back on their feet after the split.
Any self-respecting true conservative would be against this tax cut and speaking out against it.
Good grief! Where are the men’s groups?!?!
I wonder about that, Caitlin. I wonder if they’re trying to decide if they can beat the direct impact of higher taxes with in-court arguments to reduce alimony payments.
But, if they have their own private jet, they can take some extra deductions. Republicans are just so thoughtful.
,,,,,, and we have little (if any) hope that our senators will not stoop and kiss the corporate ring to show their fealty as Kristi has done.
Two republican senators, Lisa Murkowski and Ron Johnson, have both stated they are NO votes on this brutal assault on Americans called a GOP tax plan.
Senator Susan Collins is wavering on her vote because of the repeal of the individual mandate.
Senator McCain indicated that this time around he would support the GOP tax plan that includes repealing the individual mandate. McCain and his wife are wealthy and would benefit from this absurdity.
America is past 20 trillion bucks in debt. What America does not need is more taxcuts and more debt.
We need serious tax revenues from off-shored korporate profits instead of dropping the liability to near zero so the money can be repatriated and handed out as bonuses.
We need to raise rates on the wealthiest and cut the loopholes so they can’t get away not paying any income taxes. We need to raise the taxable amount of income for SS to at least a million or
two.
The poors always get the dirt end of the stick because we have no representation.
simply put by https://www.newyorker.com/news/news-desk/the-shocking-math-of-the-republican-tax-plan
The house Joint Committee on taxes reports:
The middle class will pay more in taxes and the richimaginary world of right-wing ideologues, know that tax rates aren’t that important a factor in investment decisions. So they realize that even a huge tax cut wouldn’t lead to much more spending.
And with that realization, the rationale for this tax plan, such as it is, falls apart, leaving nothing but a scheme to make the rich — especially those who rake in investment income rather than working for a living — richer at will pay less. by 2025 there will be a direct transfer of money from the poor to the rich, and to corporations. 3/4s of tax benefits will be a wasted harmful gift to the rich (especially those who rake in investment income rather than working for a living ) while the other 1/4 will go to corporations who will spend it wisely (C.E.O.s, living in the real world of business, not the imaginary world of right-wing ideologues, know that tax rates aren’t that important a factor in investment decisions. So they realize that even a huge tax cut wouldn’t lead to much more spending.
And with that realization, the rationale for this tax plan, such as it is, falls apart, leaving nothing but a scheme to make the rich — richer at everyone else’s expense).
By 2027 taxes on less than $75,000 income INCREASE while taxes on income above $75,000 DECREASE. The greatist tax cuts go to incomes above $1million. hahahaha. What a joke thune (who is taking 13 million people’s health care away too in the Senate bill), and ryan are playing on us little people in SD. https://www.nytimes.com/2017/11/16/opinion/trump-tax-plan-hate.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
Wee Dogie! We passed ourselves a tax cut. Good for them.
They may get bragging rights short term. Defending this dog is another matter. They are cutting corporate tax liabilities by 40%. (35% rate to 20%) Cut the estate tax liability 100% for millionaires and billionaires with estates larger than 11 million dollars.
Then, oh yes, then there are the rest of us. A tiny cut for the lower middle class and a couple percent off for the upper middle class. And they expire at that. Good luck defending that bitch next year.
Why were there no hearings on this bill?
Wrong.
If we shift income from one person to another, the receiver should pay the income tax. You get free income, you should be taxed to pay for your food stamps and other freebies too.
Here’s a little gem buried in this so called tax plan.
A provision titled Family Leave, sounds good, right?
It is just more flimflam and does not benefit a family in anyway, the tax deduction is for corporations that provide daycare for employees children.