Trump truly has fucked us
"But thanks to a rule change that the Internal Revenue Service made Thursday, a lot of Americans will reportedly be paying a bit more in taxes in 2019 than they thought they would--and even more in later years. Eventually, maybe a lot more."
Remember the Big Tax Cuts? The IRS Just Announced a Surprising Change That Will Probably Make Yours Smaller
Most Americans expect to pay less in federal taxes this year, after President Trump and Republicans in Congress passed a last-minute tax bill last December.
But thanks to a rule change that the Internal Revenue Service made Thursday, a lot of Americans will reportedly be paying a bit more in taxes in 2019 than they thought they would--and even more in later years. Eventually, maybe a lot more.
It all comes down to a simple math equation--or more accurately a series of simple math equations. Because the tax law uses particular dollar amounts to establish thresholds for different things--tax brackets, the amounts of deductions, etc.--the IRS has to adjust many of these numbers for inflation each year.
Traditionally, the IRS has used a calculation called CPI-U to compute inflation. (CPI stands for "consumer price index," and the U stands for "urban.") But besides cutting taxes, the law also required the IRS to change to a different calculation.
So, on Thursday, the IRS announced how it's making this big change, to something called "chained CPI." The difference between the two, as The Wall Street Journal explains, is that under chained CPI, inflation moves more slowly.
So, legal thresholds like the standard deduction that taxpayers are eligible to take, and the income needed to move into a higher tax bracket, will go up more slowly than they otherwise would.
"The result," the Journal's Richard Rubin writes, while noting that it's unusual for the IRS to issue guidance like this so late in the year: "More income gets taxed at all, or taxed at higher rates."
It's difficult to calculate exactly how much any individual taxpayer will see their taxes go up as a result of this change, since everyone's circumstances are different, and usually change from year to year.
But Congress's Joint Committee on Taxation says it will cost U.S. taxpayers $133.5 billion over a decade.