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5 Myths About the State and Local Tax Deductionís Cap
5 Myths About the State and Local Tax Deductionís Cap ^ | June 24, 2019 | Adam Michel

Posted on 06/25/2019 2:21:35 PM PDT by Tolerance Sucks Rocks

Ever since the Tax Cuts and Jobs Act passed in late 2017, Democrats and a few Republicans have decried how the law’s $10,000 cap of the state and local tax deduction harms schools, local communities, home values, first responders, and middle-class families. Fast forward almost two years later and these false claims are not going away.

House Democrats recently announced a hearing scheduled for Tuesday where many of the common myths are likely to be repeated.

Here are a few of the most common misconceptions.

Myth #1: The Cap Hurts Middle-Class Taxpayers

Before the 2017 tax cut capped the state and local tax deduction, 70% of taxpayers received no benefit from the deduction. Most of the benefits flowed to wealthy taxpayers in high-tax states.

Despite the cap, the vast majority of taxpayers still got a big tax cut for three reasons.

First, the tax law doubled the standard deduction, which means about half the people who previously chose to itemize their taxes (which allows access to the state and local tax write-off) now voluntarily choose to take the new larger standard deduction. Most of these people are better off than they were before.

Second, tax rates were lowered across the board. Even if taxable income increased slightly because of the state and local tax cap, lower tax rates mean most people still came out ahead.

Third, because the tax law raised the exemption for the ineffective and overly complicated alternative minimum tax, millions of higher-income alternative minimum tax-paying taxpayers saw the state and local taxes deduction increase from zero to $10,000 under the new law because they no longer have to pay the alternative minimum tax.

Taxpayers subject to the tax are not allowed to take the deduction for state and local taxes.

(Excerpt) Read more at dailysignal.com ...


TOPICS: Business/Economy; Editorial; Government; News/Current Events; Politics/Elections
KEYWORDS: biggovernment; bluestates; cap; deduction; doubletax; homevalues; incometax; itemization; middleclass; myths; propertytaxes; realtors; redstates; salestax; salt; savings; schools; standarddeduction; states; talkingpoints; taxcutsandjobsact; taxdeductions; taxreform; wealthy

1 posted on 06/25/2019 2:21:35 PM PDT by Tolerance Sucks Rocks
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To: Tolerance Sucks Rocks

“Most of the benefits flowed to wealthy taxpayers in high-tax states. “

Bullsh!t.

I am not wealthy and my taxes went up.

My Federal tax went up.


2 posted on 06/25/2019 2:25:46 PM PDT by Mariner (War Criminal #18)
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To: Mariner; SkyPilot; Rome2000; Jarhead9297

FWIW.

Not that I find the whole thing necessarily believable, in light of the massive amounts of money redistributed from bleu states like New York to red states like Alaska. And let’s face it, a $1400 average tax cut for individuals/families is PATHETIC.


3 posted on 06/25/2019 2:25:48 PM PDT by Tolerance Sucks Rocks (The Modern Democrat Party: America's largest hate group.)
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To: Mariner

Doesn’t surprise me. If I understand correctly, about 20% of the population saw their taxes remain the same or go up. I don’t believe the “only 10 percent” talking point, to the extent that is still out there.


4 posted on 06/25/2019 2:27:01 PM PDT by Tolerance Sucks Rocks (The Modern Democrat Party: America's largest hate group.)
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To: Tolerance Sucks Rocks; Mariner; lightman; Rome2000
What a bunch of garbage this article is.

He starts out using the Social Justice Warrior tactic of trying portray the tax hike (because that what it was) only affecting "the wealthy."

Dual income couple who are solidly middle class got bent over by this. Firefighters. Teachers. Electricians. The middle class. I guess that's just too hard for the author to understand.

We lost a large number of House seats directly because of the tax hike caused by eliminating and capping long standing deductions.

Rather than admit it, our side just goes further SJW.

Amazing.

5 posted on 06/25/2019 2:27:43 PM PDT by SkyPilot ("I am the way and the truth and the life. No one comes to the Father except through me." John 14:6)
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To: Tolerance Sucks Rocks

I got screwed big time by it. My federal taxes were over $100k for the first time ever


6 posted on 06/25/2019 2:33:09 PM PDT by from occupied ga (Your government is your most dangerous enemy)
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To: from occupied ga

Yes, this cap will only affect bleu states! /sarc


7 posted on 06/25/2019 2:34:27 PM PDT by Tolerance Sucks Rocks (The Modern Democrat Party: America's largest hate group.)
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To: SkyPilot
We lost a large number of House seats directly because of the tax hike caused by eliminating and capping long standing deductions.

What seats were those? Kali lost several seats to vote fraud.

8 posted on 06/25/2019 2:36:01 PM PDT by MileHi (Liberalism is an ideology of parasites, hypocrites, grievance mongers, victims, and control freaks.)
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To: Mariner

Gee!
You must be in the wrong state. Are you living in California?

For the first time in decades, this year, the standard deduction was greater than my itemized deductions.


9 posted on 06/25/2019 2:38:41 PM PDT by SubMareener (Save us from Quarterly Freepathons! Become a MONTHLY DONOR)
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To: SkyPilot

We lost a large number of House seats directly because of the tax hike caused by eliminating and capping long standing deductions.
*******************************************************
If you’re talking about the Californian shifts, I think most of those changes were due to vote fraud and “ballot harvesting”. Many of the affected districts had the Republicans ahead by thousands of votes on election night but later (weeks later in many cases) the’RATS pulled ahead.


10 posted on 06/25/2019 2:39:20 PM PDT by House Atreides (Boycott the NFL 100% ¬ó PERMANENTLY)
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To: Tolerance Sucks Rocks
As a small incorporated business owner taking full advantage of the 20% of qualified income deduction I was able to shelter almost $40K of formerly taxable income, which flowed to me personally on the K-1 form.

That was a huge tax savings for my small business located in CT.

FReegards!

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11 posted on 06/25/2019 2:45:21 PM PDT by Agamemnon (Darwinism is the glue that holds liberalism together)
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To: Mariner

If you are from CA, NY, NJ or IL I am sure your taxes went up. The feds stopped paying the states.


12 posted on 06/25/2019 2:54:11 PM PDT by Agatsu77
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To: All

Democrats want to talk about taxes. They’re the ones that started taxing social security. They are the ones that don’t believe in equal payback equal work. What you say. They applied locality payments so people in higher pay areas get more money for sane work. This way than can keep poorer communities poorer. Another question do you give part of your pay back to your employer? Military and federalm workers do.


13 posted on 06/25/2019 3:57:40 PM PDT by Retvet (Retvet)
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To: Tolerance Sucks Rocks

the real issue is that the corporate tax cuts don’t sunset but the individual ones do. that should have been flipped


14 posted on 06/25/2019 5:45:41 PM PDT by socalgop
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To: SubMareener

I live in California (not by choice at this point) and not only do I bring home $200 more a month but my yearly return was slightly larger than last year. I guess I live the lifestyle best augmented by the new tax structure.


15 posted on 06/25/2019 6:05:22 PM PDT by Usually_Disappointed (This space for rent.)
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To: Tolerance Sucks Rocks

I have to hand it to the Dems and the media, 80 to 90 percent of the country gets a tax cut, yet 80 to 90 percent of the country is CONVINCED that their taxes went up.

Mind blowing.


16 posted on 06/25/2019 6:58:58 PM PDT by BobL (I eat at McDonald's and shop at Walmart - I just don't tell anyone.)
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To: socalgop

Both corporate and individual cuts should be permanent.


17 posted on 06/25/2019 7:43:14 PM PDT by Tolerance Sucks Rocks (The Modern Democrat Party: America's largest hate group.)
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