Why the new 12000 dollar standard deduction for single, and 24000 for joint in the new tax plan is

[karynnj]

57. Depends - if they pass something that gains some Republican votes ...

and that might happen if 2018 is a huge landslide - with many deficit hawks seeing the writing on the wall. They might have enough votes would change the rules to something more reasonable on pass through income - especially from real estate activities (passive or active) that were huge giveaways'. They might stop all remaining steps towards eliminating the estate tax. Those two things cost much of the money. The third thing would be to relook at corporate taxes. Corporations, by and large NEVER paid the percent of taxes that the rates suggested - as they protected so much income through deductions, so the comparisons to what was actually paid in other countries was dishonest. Here, they will need to compute the new effective rates. It might be easier to raise that rate by eliminating some (less defendable) deductions - raising the effective rate to at least the previous effective rate.

The ONLY reason to have any hope on this is that it seems that - at least at this point - people agree with the Democratic view that the tax cut bill stinks. In addition, the excellent OP suggests that many will be unpleasantly surprised when they see their paycheck - assuming that withholding can be done to reasonably approximate the tax impact. (I am retired so I do not know if the IRS and employers have a new equivalent to the W4 form and formulas for companies to accurately compute the withholding. It might be they will try to use the old information to approximate the amount assuming that standard deductions are used. ) At any rate, they pushed this through so fast at the end of the year and made it effective almost immediately. It would seem unlikely that all companies will get this right. It might be a mess.

Not to mention - the impact on 2017 taxes. I could not turn on the tv or radio for more than an hour without hearing multiple times that people should pre pay property taxes for 2018 if they were already assessed or to create personal charitable accounts - where the money put in is ALL a contribution to charities now - not when you give it away in the future. (If you had the money now, you could put the next few years church or synagogue dues/donations there) Many charities also made the case for many people. that a donation last year would be tax deductible and in future years - because you would take the higher standard deduction - it would not be. It will be interesting to see if in aggregate, this has an impact.