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<<<But look at it the other way, MFJ, kids out of the house and off the family payroll, and who own a $160,000 house. At 4% interest rate, assuming 120k mortgage, that is $4800 in interest, and the implied tax rate you wrote (which I only assume arguendo), that would be $7,520 in taxes, for $13,320 to deduct, or only $620 more than the 2017 MFJ standard deduction of $12,700, with a tax savings of $93 in the 15% bracket, that is not a lot of incentive, either.

And with the 2017 personal exemption amount of $4,050, under the current rules, the couple excludes $21,370 ($8,050 + 13,320) whereas the DJT plan would allow the 24k deduction, and would generate a small tax savings of about $394.50.>>>

"However, their overall taxable income has actually gone up if they were maxing out their 401(k)s before the tax change and if the plan to reduce amounts they can contribute to 401Ks or tax contributions to 401Ks.

So in your situation above, say both earners made $70k a year, and maxed out their 401(k)s every year. In 2016, their taxable income could be $104,000. Under the new plan, it would be the full $140K... so it seems like there would be no tax savings, but rather higher taxes would be likely."

We were talking about standard deductions.

I forget who wrote it above, but I agree that the proposed low limit on tax deductible contributions is all about finding revenue, within the federal 10 scoring requirements, to pay for the proposed tax cuts for the very high income group.

It will not score the revenue lost after 10 years because so many more funds are now held outside of deductible IRA accounts and/or in Roth accounts.

I thought that was crystal clear.

Regards, JAFO
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