Posted on 04/30/2017 4:46:57 PM PDT by MaxistheBest
The Trump Administration’s stated intention to eliminate the state and local tax deduction (SALT) is likely to meet major opposition from big blue states’ Congressional delegations. The New York Times reports:
To some, it is a tax on blue-state liberalism. To others, President Trump’s plan to end the federal deduction for state and local taxes would eliminate a costly perk for the wealthy.
But to many taxpayers, the deduction is a cherished break that can save them thousands of dollars in double taxation.
Mr. Trump and House Republicans, riding a wave of conservative and populist sentiment, are pushing to end the provision. Yet they must overcome a long tradition and powerful opponents, including Republican and Democratic officials in wealthy, populous states like California, New Jersey, New York and Texas.
The deduction overwhelmingly benefits six-figure earners. The benefit is largest for affluent people living in states that impose high income tax rates, which are much bluer than average.
(Excerpt) Read more at the-american-interest.com ...
“...The deduction overwhelmingly benefits six-figure earners...”
Mo wonder Chuckie Shumer was crying so loudly about it this morning....
There was a time when you could deduct interest on Credit cards and every dime of medical expenses. People forget.
How did Texas get lumped in with California, New Jersey and New York?
It is double taxation. You are paying taxes on money that was taxes.
New York State needs bankruptcy. The government in NY State can not change otherwise.
Otherwise, the state will continue to become a hollowed-out shell, with a very few crony-capitalists trading fake federal reserve money and debt in NY City, with the remainder of the state sliding further into a swamp of progressive, statist poverty and decline.
Yes!
Ha! Normally the NYT complains about people who "earn too much" compared to others and not paying "their fair share".
I said to the Deplorable Men's Diner Club last night that this is a throw away item. Trump goes to the High Tax Blue States who are all infested with Sanctuary Cities, get rid of these and I'll drop this tax change. It is so Art of the Deal Trumpian and the young lad that was the only one who has read The Art of the Deal was smiling and nodding and many others agreed.
Doesn’t New Hampshire have ridiculously high property taxes?
That’s a good argument. The flip side of this is that these deductions aren’t allowed uniformly. I don’t believe you can deduct your state sales taxes, for example, on your Federal income taxes. And someone who is a tenant pays their landlord’s property taxes as part of their rent but gets no deduction for it.
no kidding about Chuck...
not that many people itemize
https://taxfoundation.org/who-itemizes-deductions/
Trump will let this play out.
High taxes in states no longer a fed problem.
That is why we have states though. Otherwise everything is at the national level.
So because several states’ benefits are not nationwide for everyone, no one can benefit? What stupid logic.
Im not a democrat and Trumps crappy tax plan is going to raise my taxes.
A lot. I’m not happy. We still have Obamacare, there’s no wall coming, and he’s raising taxes on many. He’s losing me.
Never having lived there I'm not sure but I've heard it said that their taxes aren't much higher than those in Massachusetts.
OTOH:
Massachusetts sales tax===>6.25%
New Hampshire sales tax==>0.00%
Massachusetts income tax===>5.25%
New Hampshire income tax==>0.00%
At its most basic level, the federal state and local tax deduction (SALT) is a hidden federal subsidy for services the high tax states provide within their states.
Those services are subsidized by the federal government through the collection of higher taxes from residents in lower tax states that do not provide those services.
Why should someone in a low tax state like Wyoming with the same income as a person in California pay more federal tax on that income than the Californian?
Doing away with the deduction is the fair thing to do.
If California and New York want to provide more government paid services to their residents the people in places like Florida and Texas shouldn’t have to help subsidize it by paying higher federal taxes than a New Yorker with the same income.
Look, if NY or California want neat parks with hot tubs and zip-lines, and billion dollar bullet trains and welfare for all and those states tax tremselves to provide such things, nGreat! BUT, individual taxpayers should not get to deduct anything from their Federal Tax obligations for doing so. Oklahomans might decide to go low amenities, stick with the basics and have a low tax. They too, will pay their full Federal obligations.
What’s wrong with that?
“It is double taxation. You are paying taxes on money that was taxes.”
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True, as the article states. If a state wants to prevent such “double taxation”, they can always exempt FEDERAL taxes from being taxed by the state. But, of course, that would eliminate what is, in effect, a large federal subsidy of high-tax states’ spending.
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