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Post by Pakachoag Phreek on Nov 6, 2017 10:44:29 GMT -5
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Post by hc811215 on Nov 6, 2017 11:00:25 GMT -5
If we earn a modest 5% on our roughly $750,000,000 that is $37,500,000. 1.4% of that is $525,000 to the government every year. Another provision negatively affects grad students. While not applicable to HC as an institution, but applicable to many HC grads in graduate school, the waiver of tuition for grad students who are teaching and research assistants will be considered taxable income to the grad student. I believe the same rule will be applied to professors and other college employees whose kids get waived tuition. That will now be deemed income to employee so far less valuable than it was, making attracting and keeping professors more expensive. Also, interest on student loans will no longer be tax deductible (currently you can deduct up to $2,500 if you make less than $80k as an individual or $160k married filing jointly. There is a lot not to like in the current proposal
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Post by hchoops on Nov 6, 2017 11:10:53 GMT -5
Unless you are a multi millionaire or billionaire
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Post by Tom on Nov 6, 2017 11:20:14 GMT -5
The city of Worcester announces about every year that the colleges with their multi-million dollar endowments should be paying taxes
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Post by matunuck on Nov 6, 2017 11:25:08 GMT -5
Gee, thought liberals at HC love higher taxes on the wealthy
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Post by hc811215 on Nov 6, 2017 11:43:28 GMT -5
Non-profit colleges like Holy Cross are not wealthy. If we have to pay $500,000 in taxes each year that is less we can do for current students, especially poor students receiving financial aid.
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Post by gks on Nov 6, 2017 13:03:51 GMT -5
Hard to argue that 500K is awful when the school is sitting on 750M.
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Post by hchoops on Nov 6, 2017 14:05:55 GMT -5
Hard to argue that 500K is awful when the school is sitting on 750M. But who benefits from the bill ?
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Post by hc811215 on Nov 6, 2017 14:09:35 GMT -5
I pretty sure the school isn't sitting on $750 million, it is investing it and using the income to offset operating expenses and fund capital projects. It enables us to be one of the few schools with need blind admissions and it allows us to offer some serious financial aid to a large number of students. College endowments just seem like a strange thing to target to fund cuts for corporations and their owners and the elimination of the estate tax that only applies to the super rich. I know I'm probably getting close to that political line so I won't go further. At the end of the day, the final proposal will likely look much different than the current one so we will have to wait and see.
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Post by rgs318 on Nov 6, 2017 14:14:55 GMT -5
You are right about that. Until then each side can cherry pick points to show benefits to the middle class or spotlight tax cuts for the rich. After all, most people in the US (currently over 50%) pay no federal taxes and will continue to not pay taxes. The "rich" pay an overwhelming part of the taxes that fund the government. I have been told by a CPA that if the final form of this tax reform is similar to what is being discussed, people may save a good deal on tax preparation since so many will no longer be itemizing deductions. I'm not counting on that.
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Post by KY Crusader 75 on Nov 6, 2017 14:47:30 GMT -5
Two thoughts: (1) I'm baffled when I hear of the huge percentage of filers who pay big $$$ to have someone prepare their returns when they could do so themselves via TurboTax (or whatever other apps there are) or simply on a paper form; and (2) the big benefit, and I believe it will be enormous, to every American would come from lowering the corporate income tax, enabling US companies to better compete with foreign entities, and thus providing yet another huge boost to the economy.
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Post by Tom on Nov 6, 2017 15:52:10 GMT -5
I know this is an unpopular opinion, but if we spend about a half a trillion (give or take a few billion) more than we take in, are tax cuts the best plan? I would think reducing income without reducing spending would increase debt.
Disclaimer - I am speaking in very general terms and understand the theory that a smaller percentage of a bigger pie could mean increased revenues. Just a generic concern about our reliance on the credit card
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Post by Pakachoag Phreek on Nov 6, 2017 16:04:03 GMT -5
To clarify. The proposed tax is a tax on endowment income. If the HC endowment income amounted to $50,000,000, the tax would be 1.4 percent of that amount, or about $700,000.. The tax is not applied to public university endowments, or I presume, the endowments of athletic associations that are affiliated with a public university. As for the actual effect on the tax burden of graduate students, certain college employees, one would have to see whether other proposed changes effectively negated any adverse tax consequences. However, the canard that many Americans don't pay any [Federal] taxes continues to resurrect itself. The orange/yellow slice represents payroll taxes, paid by nearly every working American. Corporate income tax represents 1.5 percent of GDP. Individual incomes taxes represent 8.4 percent of GDP. The average effective corporate tax rate in 2010-2011 was 20 percent. www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/Average-Effective-Tax-Rates-2016.pdfSo lowering the top rate to 20 percent is very unlikely to produce the economic stimulus proposed by tax cut proponents. The Laffer Curve (as a panacea for economic woes) is indeed a laugher. Where is GoPurp so I can joust with him? ?
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Post by rgs318 on Nov 6, 2017 16:11:50 GMT -5
To clarify. The proposed tax is a tax on endowment income. If the HC endowment income amounted to $50,000,000, the tax would be 1.4 percent of that amount, or about $700,000.. The tax is not applied to public university endowments, or I presume, the endowments of athletic associations that are affiliated with a public university. As for the actual effect on the tax burden of graduate students, certain college employees, one would have to see whether other proposed changes effectively negated any adverse tax consequences. However, the canard that many Americans don't pay any [Federal] taxes continues to resurrect itself. The orange/yellow slice represents payroll taxes, paid by nearly every working American. Corporate income tax represents 1.5 percent of GDP. Individual incomes taxes represent 8.4 percent of GDP. The average effective corporate tax rate in 2010-2011 was 20 percent. www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/Average-Effective-Tax-Rates-2016.pdfSo lowering the top rate to 20 percent is very unlikely to produce the economic stimulus proposed by tax cut proponents. The Laffer Curve (as a panacea for economic woes) is indeed a laugher. Where is GoPurp so I can joust with him? ? Having prepared taxes for Straight and Narrow clients, I know the numbers are not a canard. The fact that there is money deducted does not mean it is paid to the government. Much of it is returned in tax refunds and (for low paying jobs) even more is sent back in the form of unearned tax credits. I did not say that no tax was paid. I was speaking about income tax. The number of people not paying any federal income tax in the new plan would go even higher than it is now.
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Post by crusader1970 on Nov 6, 2017 18:38:29 GMT -5
Unless you are a multi millionaire or billionaire Not totally true. They lose all their state and local income tax deductions along with all but $10,000 of their real estate tax deduction. Rate stays at 39.6%. When they die, of course, they will benefit from the elimination of the estate tax.
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Post by matunuck on Nov 7, 2017 9:17:04 GMT -5
How entertaining that all these schools that charge ridiculously high tuition to fund lots of nonsense programs, new administrative offices for PC causes, and the general pampering of students are now whining about costs. We will see on economic growth, but I suspect a significant cut in the corporate tax will easily juice growth in the next few years.
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Post by hchoops on Nov 7, 2017 9:29:05 GMT -5
you presume that the bill will pass
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Post by alum on Nov 7, 2017 9:53:11 GMT -5
How entertaining that all these schools that charge ridiculously high tuition to fund lots of nonsense programs, new administrative offices for PC causes, and the general pampering of students are now whining about costs. We will see on economic growth, but I suspect a significant cut in the corporate tax will easily juice growth in the next few years. Yes, no doubt about it. In fact, some might say that spending several thousand dollars per undergraduate to offer Division 1 athletics at a small liberal arts college is a waste. I guess it's all in the eye of the beholder. My problem with this proposal is that it singles out private colleges and universities. Is this saying that the work they do is less important than what HHMI or the Gates Foundation or any of the big hospital nonprofits do? Tax reform involves Congress and the President picking some winners and losers. Some want to do away with the estate tax because it results in double taxation. That is true to some extent, but as to accumulated wealth, repeal of the estate tax while we have "stepped up basis" will result in the passage of assets to the very wealthiest Americans, the majority of which has never been taxed. If there is only repeal of the estate tax, either we increase the debt or somebody else pays for it. Doubling the standard deduction will be great for many, but those with big families might find that this is offset by losing the personal exemptions. The wealthy who earn most of their income through work ($30 million baseball players, for example) will likely pay more in taxes while those who earn their money from investments will pay less. I think that earned income should be more prized than return on equities but I understand that there is an argument that the invested money creates jobs. These are all judgment calls The home mortgage deduction exists because as a society we have believed that home ownership is a good thing and we believe that this deduction allows more people to own houses. But does it? If we did away with it, gradually so as not to upset the expectations of those who relied on its existence, might we reduce the cost of housing and keep it affordable. The British did that and their level of home ownership has remained steady. Reducing the cost of housing is great for younger people and might be a goal for the federal government, but what about all the retirees here who haven't sold their home yet but are planning on cashing out at some point. My real problem is that the answers are likely to be found in the relative lobbying strength of certain industries as opposed to what you, or the people we know, or I each independently think is good for us or, because we are men and women for others, for most Americans.
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Post by Pakachoag Phreek on Nov 7, 2017 19:11:38 GMT -5
The college has just posted its audited financial statement for fiscal 2017 (year ending June 30).
The net return on long-term investments was a bit shy of $84 million. Applying the 1.4 percent tax, the tax bill for HC would have been $1,175,000.
Just enough of a tax bite to rule out joining HE.HE is a discretionary future expenditure and would be the first thing to go!
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Post by deep Purple on Nov 7, 2017 23:44:13 GMT -5
Unless you are a multi millionaire or billionaire If you are lower/middle income and file the standard deduction (which doubles) along with the expanded brackets (12% up to $45k single $90k joint) it’s a great plan. If you’re a multi millionaire/billionaire and itemize and no longer have all the cushy deductions, then it’s not so great.
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Post by sader1970 on Nov 8, 2017 6:31:49 GMT -5
Yay! 1. Post card return form (Can I still send it electronically and save a stamp?) 2. Think of all the money I will save not using TurboTax! 3. Uh, I live in RI (worst place in New England, some say the country, to live in retirement) - state income taxes take a bite, perhaps not like my native NY but still helpful for fed tax 4. The best benefit, apparently, the GOP will have finally passed some form of legislation 5. Up next, like a vampire w/o the stake in the heart, another shot at "repeal & replace" of healthcare coming back to life in some altered form But I have a nagging feeling that this isn't being done for me but those in a cohort who live and work around Pennsylvania Ave.
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Post by Pakachoag Phreek on Nov 8, 2017 6:38:19 GMT -5
Unless you are a multi millionaire or billionaire If you are lower/middle income and file the standard deduction (which doubles) along with the expanded brackets (12% up to $45k single $90k joint) it’s a great plan. If you’re a multi millionaire/billionaire and itemize and no longer have all the cushy deductions, then it’s not so great. If you are married with two children and take the current standard deduction, your current deduction + exemptions amounts to $28,900. As the GOP proposed bill does away with the exemptions, the increased standard deduction would be $24,000, so you have nearly $5,000 less to subtract from the top line, and no real change in the tax rate.. Some of that may be made up with parent tax credits and an increase in child tax credit ________________ I believe the only state and local taxes that may be deducted are property taxes, and that's capped at $10,000 . .
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Post by Tom on Nov 8, 2017 9:16:32 GMT -5
If you are lower/middle income and file the standard deduction (which doubles) along with the expanded brackets (12% up to $45k single $90k joint) it’s a great plan. If you’re a multi millionaire/billionaire and itemize and no longer have all the cushy deductions, then it’s not so great. If you are married with two children and take the current standard deduction, your current deduction + exemptions amounts to $28,900. As the GOP proposed bill does away with the exemptions, the increased standard deduction would be $24,000, so you have nearly $5,000 less to subtract from the top line, and no real change in the tax rate.. Some of that may be made up with parent tax credits and an increase in child tax credit ________________ I believe the only state and local taxes that may be deducted are property taxes, and that's capped at $10,000 . . Which means if you live in a state with a state income tax, your lost deduction from the top line is greater than $5000
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Post by sader1970 on Nov 8, 2017 10:45:10 GMT -5
Trying to stay within our strictures against "politics," I have read/heard in multiple media that the disallowance of state income tax deductions tends to work against Democratic majority states. I am positive that this can only be a coincidence.
But back to the original point, shouldn't we all be pleased that Holy Cross would "qualify" as an elite (and rich) private college/university to have its endowment taxed?
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Post by Pakachoag Phreek on Nov 8, 2017 15:18:19 GMT -5
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