# Wow, the new tax bill is really a substantial reduction

Looking at the proposed new marginal tax rates and brackets on the senate website (https://www.finance.senate.gov/imo/media/doc/12.2.17%20HR%201.PDF)   from the current 2017 rates on wikipedia (https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Marginal_tax_rates_for_2017) how big a tax break can you expect?

Quick math for a family with \$150k annual taxable income with the old (2017) method:

•      10% on \$9,325                           =   \$932.50
• +  15% on (\$37,950 – \$9325) =   \$4293.75
• +  25% on (\$91,900 – 37,950) = \$13,487.50
• + 28% on (\$150,000 – \$91,900) = \$16,268.00
•                                                                ———————–
•               total (2017)                               = \$34,981.75

and now with the new (2018) method:

• 10% on \$19,050                           =    \$1,905
• 12% on (\$77,400-\$19,050)  =     \$7,002
• 22% on (\$140,000-\$77,400) =   \$13,772
• 24% on (\$150,000-\$140,000) = \$2,400
•                                                     ———————
•           total (2018)                           =\$25,079

So basically \$10k less in tax, or an overall reduction of around 30%

Of course that does not take into account changes to itemized deductions, but at least its a start to wrap your mind around the new tax bill.

## One thought on “Wow, the new tax bill is really a substantial reduction”

1. Clay wilson says:

Thanks for the break down.