Posted on 10/25/2017 7:19:22 PM PDT by Mariner
WASHINGTON - After weeks of silence, California’s 14 Republican members of Congress will have to weigh in for the first time this week on a tax plan that could hit millions of Californians.
Republicans vote Thursday on their budget, which paves the way for the party to advance its tax overhaul. As it’s currently framed, the overhaul would eliminate the state and local tax deduction, a write-off that disproportionately benefits taxpayers in high-tax, high-cost states like California. While the state’s Republicans have avoided taking a position on that proposal, Democrats are prepared to paint any Republicans voting for the budget as “accomplices” in the push to eliminate the deduction, warns House Minority Leader Nancy Pelosi.
“It is really an urgent time for the state of California,” the powerful San Francisco-area congresswoman told McClatchy, noting that the state’s residents saved more than $100 billion in taxes by taking the deduction in 2015.
President Donald Trump and Republican leaders have pitched their tax overhaul as a boost, first and foremost, for the middle class. And tax experts note that the vast majority of households taking advantage of the state and local deduction earn more than $100,000, which is considered wealthy in many parts of the country.
But as the state’s Democratic delegation noted in an Oct. 23 letter to the leaders of Congress’ tax-writing committees, roughly 83 percent of California households claiming the deduction in 2015 earned under $200,000. Given the high cost of living in much of the state, that qualifies as solidly middle- or upper-middle class, Pelosi and other Democrats argue.
Pelosi also points out that Republicans represent many of those Californians – on average, more than one-third of Republicans’ constituents used the deduction in 2015, IRS data shows. In seven GOP districts – those represented by Reps. Tom McClintock...
(Excerpt) Read more at sacbee.com ...
I itemize to the tune of more than double the standard deduction today and still will get a big tax cut after this. And actually there is evidence to substantiate it - the WSJ posted an article two days ago that said over 70% of income earners between $150k and $415k would receive a tax cut while less than 30% would get a tax increase. Those receiving a tax cut were twice as large, on average, as those receiving a tax increase (ie those between $150k and $415k, net collectively had taxes go down $4 for ever $1 it went up, at worst). And that was the *worst* group of anyone at the median level.
“I itemize to the tune of more than double the standard deduction today and still will get a big tax cut after this.”
Via what mechanism will you get a cut? Do you already know you are not among the 30% that will see an increase?
She’s right about this one. The plan is to “pay for” business tax cuts by raising other taxes, including the elimination of this state tax deduction. So instead of cutting spending to pay for tax cuts, the GOP wants to raise taxes to pay for lowering other taxes
Why play confusing games with all these deduction changes? Just CUT SPENDING!!!!!!
Because the current expectations is the 15% bracket goes up above $75.3k for married, the current 28%-35% bracket goes down to 25% and the next $500k goes from 39.6% to 35%. It's not hard to take that, double the standard deduction and adjust your deductibles and figure out your expected income tax. Only real question at this point is 1) where 15/25% cut off is and 2) where the 35%/39.6% cut off is. That doesn't even count the fact the AMT gets eliminated as well.
“I am certain my taxes will go up, as will millions of those like me. And we’ll work against Republicans every day from that day forward.”
If that’s how you base your vote, that’s fine...sad, but fine. I’m more interested in what’s best for country when I vote.
Sounds like a shell game. They’re raising my taxes, and they’re not even building the wall. The GOP is so worthless
“Remember, SALT covers every excise tax, property tax, school bond tax, sales tax and state income tax.”
You may want to read up on the tax laws a bit. You need an OR, in the above sentence.
100k is nada in CA. The valet parking guy at the local barbershop makes that.
And in the (unlikely) event my taxes do go up slightly, that’s fine. I think being able to deduct local taxes encourages local waste and I think most other itemization is BS as well. Even in that scenario, my net worth increases far more as stocks will benefit from lower and reformed corporate income taxes.
Correct.
You can claim either the sales taxes OR the state income taxes.
That’s why it’s enjoyed by 43 million households in every state.
Sadly it may well come down to perceptions, and even people on this thread are using faulty data. But who knows, maybe we’ll get lucky this time.
“the current 28%-35% bracket goes down to 25% “
You must be referencing the Trump Campaign Tax Outline.
There is nothing coming out of the GOP congress that even alludes to those rate reductions.
“That’s why it’s enjoyed...”
I don’t know too many people who ‘enjoy’ tax policy or use that type of language regarding tax policy, but I do recognize talking points...
I “enjoy” taking those deductions every year.
It certainly beats writing a check to the IRS.
Yes there is, but you can pretend it doesn't exist.
here are the current tax brackets. Keep in mind you can only play with 3 or 4 tax brackets - 15%, 25%, 35% and *maybe* 39.6% at double the current level which it starts, and you must double the standard deduction, which covers ~90% of Americans at that point.
Wait....
So if someone in a low tax state who makes the same as someone in CA, recognized as a high tax state, pays more in federal tax because his state tax deduction is less than the CA state tax deduction, that’s ‘OK’?
LOL.
Who cares if it raises Calif taxes? The citizens there allowed the state to degenerate to this point.
Indeed - The worst thing I understand that those who may see a tax increase here (those in very high tax states AND with high mortgage debt) may get pissed off here, but its difficult to see their federal taxes are already being largely subsidized by these "special deductions." But ultimately, simplification of the tax cut and tax cuts for corporate america (which benefit anyone who owns equity) are more beneficial for the middle class and beyond than any other group.
Apparently you’re not aware of the reach of such changes.
Because you haven’t bothered to get past your emotional reaction.
If it screws somebody in CA, it must be good!
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