Update: Republican/Trump Tax Plan Would Raise My Taxes by about $3,000

A few weeks ago, I estimated the Trump tax plan would raise my families taxes by over $4,000 and most likely close to $5,000 per year.  This morning, the detailed tax proposal was released and I have recalculated our tax increase to be between $2,500 and $4,000.  [The range is primarily due to my uncertainty about whether we would receive a new credit for $300 per individual that did not qualify for the expanded tax credit.  We would not qualify for the $1,600 tax credit due to my dependent children being 16 or over, and income phase outs.]

The three most significant changes:

• Tax bracket details:  The most significant to me and most households is that the 12% tax bracket extends farther than the 15% tax bracket in current code.  Specifically, under current law, the 15% bracket ends at around $76,000 for married filing jointly, whereas the Republican proposal would have a 12% rate up to $90,000 for married filing jointly.  In my previous calculation, I assumed 12% rate ended at same income level as current 15% rate.  This extended bracket saves me about $1,800 in taxes compared to my initial calculations.  The proposal also retains the 39.6% rate for incomes over a million dollars but that doesn't affect my family.
• Property Taxes deductible up to $10,000:  This is a compromise on the state and local tax deduction controversy.  For my household, it wouldn't matter.  It would bring our potential tax deductions from about $18,000 to just under $24,000, the new standard deduction, so we still wouldn't itemize.  However, this could help reduce the hit on some California households.
• Future mortgage interest deduction capped at a $500,000 mortgage, reduced from current cap of $1 million.  This could have interesting effects on California housing, especially in high-cost coastal areas.  In some ways, you could think of this as paying for the return of the property tax deduction.  If you are buying a Bay Area house with a jumbo mortgage, you will still get to deduct property taxes under this new proposal but that will be offset by this new limit on your ability to deduct mortgage interest.

So people like me are still facing an unpleasant tax increase from the Republican/Trump plan, even if it is not quite as large as I originally thought.