Posted on 10/12/2015 11:04:45 PM PDT by grundle
Bush wants to cancel the deduction for state and local taxes.
As the presidential candidates roll out tax reforms, one test of seriousness is which tax deductions they’ll cut. One of the better ideas is Jeb Bush’s proposal to end the deduction for state taxes. While liberals decry tax cuts for the rich, they adore this particular subsidy for the rich, and especially for rich states and the political class in Sacramento, Albany and Trenton.
Since the creation of the federal income tax in 1913, taxpayers who itemize have been allowed to deduct the income and property taxes paid to state and local governments from their adjusted gross income, and more recently sales taxes. Since only one of three taxpayers itemize—most of them affluent—and since the affluent pay higher marginal tax rates, the value of the benefit is worth more to higher earners. Nine of 10 foregone dollars from this tax deduction accrue to people making more than $100,000 a year, according to Congress’s Joint Committee on Taxation.
The perk is a particular bonus for high-tax, mostly Democratic-run states. In practice the federal government effectively pays as much as 39.6% of a person’s state and local tax bill and thus uses federal revenue to finance state spending. This Uncle Sugar tax discount makes it less painful for Governors to raise income or sales taxes and localities to raise real-estate taxes.
You know where they are. In a 2012 analysis of IRS data, the Tax Foundation found that the 10 counties that benefit the most from the write-off are New York, Nassau and Westchester (top marginal income tax rate: 8.82%); Marin, San Mateo and Santa Clara in California (13.3%); Fairfield on Connecticut’s gold coast (6.7%); and Morris, Somerset and Hunterdon in New Jersey (8.97%).
(Excerpt) Read more at wsj.com ...
i HATE NYC and I HATE cuomo and deblahblahblah.
my fiance just got laid off and she wont get unemployment until her eight week severance package is up. She worked HARD for that measly 8 weeks after 12 years!!
but losers who collected for 150 weeks bankrupted it.
I hate cuomo. I wanted to call him some Italian slurs. Thought it would be ok since I’m Italian. But dont want to take any chances :)
Now Rudy, there was a leader. Too liberal for president, but Great for NYC mayor.
Kicked Arafat out of two social gatherings. NEVER met with sharpton. Tough Italian.
When Bush and Pataki weren’t saying a word after 9/11, he was assuring us.
Went to almost EVERY fireman’s funeral mass.
Now we arm them in the mid east.
What a bunch of crap. 100k a year is not affluent and many of the people making it are not liberal. The state tax deduction is fair why should you be taxed on the money you paid on other taxes? I say this article is written by liberals looking to spread a little class envy and misinformation.
I’d have to move. There are more registered Republicans in NYC than in a few states.
Because it rewards citizens of high tax States vs. those of low tax States?
Here’s a novel idea - how about the government cuts waste and corruption, stops sticking its collective nose into unconstitutional areas of life, lowers its spending, cuts taxes and stops bleeding the citizens white by grabbing every dollar that isn’t nailed down or hidden under a mattress.
Income tax is contrary to the founders intent.
There's a better argument for eliminating this deduction, or at least changing it. One problem with it is that some types of local services are provided differently, and therefore subject to different tax deductions. A good example of this would be garbage collection. If I live in a town where my garbage collection costs are paid through my municipal taxes, then this is effectively a deductible living expense for me if I itemize on my Federal taxes. But if I live in an area governed by a homeowner's association and my garbage collection costs are covered by my association fees, then I can't take advantage of this deduction.
I'd be fine getting rid of the deduction entirely except for the deductibility of state/local income taxes. There's no reason to subject the same income to double taxation.
Bush is an ass of epic proportions. Instead of declaring how he'll lower the tax burden for all U.S. citizens he's playing class warfare and the piece of rag, WSJ, is pining at his feet to make him president.
The days of U.S. greatness are gone for the middle class. We are now officially pawns, jesters and fealty to the ruling class.
The Pease provision already phases out this deduction for high-income taxpayers. I guess the WSJ missed the Taxpayer Relief Act of 2012.
If this isn't sarcasm go back to 8th grade math. It doesn't reward anyone. The people who live in high tax states are already "punished" by the high state taxes. It simply levels the tax burden somewhat.
85% of a $15,000 property tax bill goes to the local school district. $15,000 off the top of Fed Taxes.
4 kids in a very good public school, with rigid geographical boundaries for enrollment means that one gets tax deductible, “private” school performance with no ‘outsiders” at a fire-sale price.
If you don’t live here, you can’t go here. It’s de facto (remember that middle school phrase?) segregation, but not by race; only GREEN need apply.
This is a big part of WHY Obamabots will now be using HUD/FHA lending “guidelines” to control where people live.
Really rich don’t care about the deduction, they have all they need. It’s the “getting to be rich” folks that benefit the most from this. That middle class we talk about all the time.
Want to see the liberal hypocrisy on this issue in action? Look up the school battles in the Bimbo (outside of Brooklyn Heights) neighborhood in Brooklyn. You can send your kids to a high performing school, 85 percent like you OR send them to Gladiator Training at the school with 85 percent folks from the projects.
Quibbling about deductions is missing the point and shows that the battle is already lost. If the income tax is to be retained the only sensible way to do it ant the way that will suck the world’s industries into the USA (if accompanied by severe reduction in regulation) is a 9 or 10% flat tax from the first dollar of income with no deductions at all, no credits, no exemptions. Cutting more people out of the taxpaying segment of the population, as Trump’s plan would do, simply enlarges the constituency for higher government spending and higher tax rates. Bush I knew that and his tax cuts therefore had longer range effects that were designed, to be self canceling due to the increased clamor for more goodies from those who don’t think their net incomes are affected by higher rates.
I heard the plan on Bennett this morning. It was 20% per the man himself. 20% TOO high. I, nor any Man, is 20% slave to the Fed. leviathan.
The ONLY good tax proposal on one based on Liberty and Freedom: consumption tax. Includes any/all persons, COMPLETELY voluntary and wholly Constitutional (unlike any flax tax).
You won’t get an argument from me about the value of a flat tax. I’ve often said that if Steve Forbes had a great personality he would have been a phenomenal President.
The consumption tax is too complicated and too full of loop holes already built in. I studied several versions of it before I decided the flat tax is better. An alternative to the flat tax and it would have to be done with an Amendment to kill the income tax is what the founders envisioned from the first, a uniform tariff on all imports- no variation in the percentage.
Loopholes? I’d love to see/hear about those. I’m not sure what’s so hard about a LOW X% at the time of initial/final sale; no tax on 2nd hand, barter, trade, etc.; no exemptions.
Even killing the (still illegal: 4th/5th..) 16th; a flat tax would STILL run into the existing same hurdles: not cover everyone, special cut-outs, compliance by bureau/police, lack of Freedom/Liberty to choose.
We need to STARVE the beast and return it to its rightful size/role, not make things easier with a BS ‘revenue neutral’ pan-into-fire approach.
Tariffs are another ball of wax ;)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.