Skip to comments.You Won’t Believe What Tax Reform Will Cost Wealthy Californians In 2019
Posted on 04/18/2018 1:52:05 PM PDT by SeekAndFind
Lots of people just talk about soaking the rich, but Donald Trump and the GOP actually did it — in California, anyway, although they won’t be alone. The controversial phase-out of the state and local tax deduction (SALT) will drop like a bombshell on high-tax-rate blue states, which is one reason why Democrats so staunchly opposed it. According to an analysis from California’s Franchise Tax Board, the Golden State will be Ground Zero:
President Donald Trumps tax cuts will be anything but for about 1 million California taxpayers who will owe Uncle Sam more money a year from now.
Theyre the Californians who will lose a collective $12 billion because the new law caps a deduction they have been able to take for paying their state and local taxes, according to a new analysis by the Franchise Tax Board.
Very wealthy Californians earning more than $1 million a year will pay the lions share of that money, with 43,000 of them paying a combined $9 billion.
It’s not all coming from the wealthy. Another $1.1 billion will come from households earning less than $250,000, hiking their tax liability $4400 on average. That’s not peanuts, but it’s a far cry from the average $209,302 per family that will be owed by those households earning more than a million dollars a year.
Put this another way. That represents the federal tax liabilities that everyone else in the country subsidized through SALT. The “progressive” income tax used taxes paid by people in low-tax states to repay the wealthy for their taxes in places like California. The SALT deduction really only comes into play for people who can itemize enough to outstrip the standard deductions, so its benefit plays mostly to the wealthy anyway.
It also plays mostly to the benefit of a very few states. California and New York taxpayers soak up almost third of all benefits from SALT deductions; add in New Jersey, Illinois, Texas, and Pennsylvania, and they account for more than half of its benefits. Taxpayers in most other states end up footing the bill.
Not only do other taxpayers end up subsidizing the wealthy, they also indemnify blue-state politicians against the consequences of their tax policies. Next year, taxpayers in California, New York, and other high-tax states will have to truly pay for their own taxes rather than foist them off on everyone else. When that happens, will high tax rates be politically sustainable? Will the political party that insists on the rich “paying their fair share” celebrate the impact of the rich actually paying their fair share? Probably not, which is the real reason Democrats are running on the repeal of the tax cuts.
That will likely prove to be a very popular platform … in California and New York. Among the millionaires. And the Democrats who run those states. For now.
Gee, that is a shame.
Elections have consequences.
Hasn’t the left always wanted to “tax the rich?”
About time they pay their “fair share”
Pity for the elitist?
Tax your enemies, reward your followers .
This is what Obama did with the tea party nothing new here move along .
I’m a Californian and I am tickled pink about this change. We will most likely not be affected, but if we miss a couple of bucks, it will be worth it to see the big bucks liberal a$$holes pay up. And watch Brown have a hissy fit about all of it.
Where does Michael Moor(efood) live? Please tell me California.
God bless you, conservative Californian. We really do have your back.
Hillary told them she was going to raise their taxes and they gave her millions in donations. Trump gave them higher taxes for nothing.
Here’s a little suggestion for LoonyLeftist states: cut your own taxes as compensation.
I don’t like to see anyone having to pay higher taxes. Government at all levels should dramatically cut spending and taxes. Especially California and New York. Otherwise, these high taxes are gonna piss off a lot of rich limousine liberals till they quit voting for tax and spend democrats. /s
This could get very interesting. Love to be a fly on the wall as the state legislatures get together and try to figure a way to satisfy the big spenders and keep the big earners from moving out.
The high tax states have about one year to get their act together before it all falls apart. And don’t forget the pension liability issue - that one isn’t going away either.
Good luck girls!
Hasnt the left always wanted to tax the rich?...
I wonder if they are tired of winning already ;)
Before I left, I lived in a condo I bought 20 years earlier, so my property taxes were about $3,500 when I left, well below the cap.
Don’t worry, Robert Redford, Matt Damon, Susan Sarandon and everyone else in Blue California will be more than happy to pay government more.
Write offs limited at $10,000 worked. Californians are now having to pay for open their borders not the rest of US.
I don’t think Proposition 13 is operative any longer. Even so, Mello Roos has been used to mitigate proposition 13 and has become a problem unto itself.
I thought they WANTED to only tax the rich.
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