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Question from a Tax dummy

alumni94alumni94 Member Posts: 4,849
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edited May 2022 in Tug Tavern
If Biden removes Trumps tax cuts, when would that go into play?
Is it right away, or does it kick in for the next tax year?

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    RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 101,158
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    I don't know the answer but going back the Trump tax cuts were passed in 2017 and took effect in 2018

    Now - and this is not tug material but fact - sometimes polticicans go back on promises to raise taxes

    https://abcnews.go.com/WN/obama-compromise-extend-bush-tax-cuts-wealthy-reaction/story?id=12331470

    Dec. 7, 2010— -- President Obama reached a landmark compromise with Congressional Republicans last night to extend the Bush tax cuts to all Americans for another two years, in addition to extending unemployment benefits and a payroll tax cut.

    In remarks at the White House, Obama said there were elements in the plan that even he didn't like, but he said compromise was necessary to ensure that taxes don't go up on middle class Americans on Jan. 1.
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    RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 101,158
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    I see the GOP trading covid and UI spending for keeping the tax cuts

    Catch my podcast!
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    HHuskyHHusky Member Posts: 19,110
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    I believe the 1993 tax increases went into effect in 1993. That's the only one I remember going into effect the same year though.
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    pawzpawz Member, Swaye's Wigwam Posts: 18,751
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    edited January 2021
    For my real estate guysm, good bye 1031 exchange.


    Allegedly. (see grandpa race's example above)


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    ntxduckntxduck Member Posts: 5,513
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    alumni94 said:

    If Biden removes Trumps tax cuts, when would that go into play?
    Is it right away, or does it kick in for the next tax year?

    It would not kick in for the taxes you are currently doing (2020). It would start with your 2021 return
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    RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 101,158
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    The Biden administration isn’t actively considering retroactive tax increases, which fail to give individuals and businesses time to respond to the higher rates, a Treasury Department official said.

    “You want to have a tax system where people -- taxpayers -- can react to the increases in the tax system so that they can change their behavior,” Mark Mazur, the Treasury Department’s deputy assistant secretary for tax policy, said Tuesday at an American Bar Association virtual event. “When you do retroactive tax increases that’s not possible. That tends to be not the first choice.”

    Speculation has surged in recent months among wealthy families and U.S. businesses that the new administration could pursue increases in corporate, individual and capital gains tax rates later this year, and make them effective to the start of 2021. Family offices and some companies rushed to restructure their assets and pursue some sales before the end of 2020 to avoid the potential for higher taxes this year.
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    creepycougcreepycoug Member Posts: 22,741
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    RaceBannon said:

    The Biden administration isn’t actively considering retroactive tax increases, which fail to give individuals and businesses time to respond to the higher rates, a Treasury Department official said.

    “You want to have a tax system where people -- taxpayers -- can react to the increases in the tax system so that they can change their behavior,” Mark Mazur, the Treasury Department’s deputy assistant secretary for tax policy, said Tuesday at an American Bar Association virtual event. “When you do retroactive tax increases that’s not possible. That tends to be not the first choice.”

    Speculation has surged in recent months among wealthy families and U.S. businesses that the new administration could pursue increases in corporate, individual and capital gains tax rates later this year, and make them effective to the start of 2021. Family offices and some companies rushed to restructure their assets and pursue some sales before the end of 2020 to avoid the potential for higher taxes this year.

    I moved a few discretionary items into 2020 for this reason. I don't know anybody with any such moves to make who didn't make such moves.
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    greenbloodgreenblood Member Posts: 14,277
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    edited January 2021
    I wouldn’t be surprised if Biden passed them for this year. Especially, if you want to raise taxes. You don’t want to give the wealthy a chance to hide or defer it if your intention is to increase revenue.
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    creepycougcreepycoug Member Posts: 22,741
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    greenblood said:

    I wouldn’t be surprised if Biden passed them for this year. Especially, if you want to raise taxes. You don’t want to give the wealthy a chance to hide or defer it if your intention is to increase revenue.

    Everybody who has the means to defer income (read: it's not an option for the average person) already did it the second this guy won office. Many of them were doing a % of it anticipating he'd win office, and many still have been doing it for years on the notion that, long-term (most income deferrals put you years out) tax rates would go up.
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    DerekJohnsonDerekJohnson Administrator, Swaye's Wigwam Posts: 59,917
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    RaceBannon said:

    I see the GOP trading covid and UI spending for keeping the tax cuts

    Catch my podcast!

    The GOP has no leverage for the foreseeable future
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    RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 101,158
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    DerekJohnson said:

    RaceBannon said:

    I see the GOP trading covid and UI spending for keeping the tax cuts

    Catch my podcast!

    The GOP has no leverage for the foreseeable future
    They may in the Senate. 50/50 with both parties having defectors makes it tough to get to 60 for anything

    I guess that's why you change the rules
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