Posted on 10/31/2017 10:51:30 AM PDT by Mariner
(CNSNews.com) - The tax plan the House Ways and Means Committee will release on Wednesday may eliminate the federal income tax deduction that people are currently permitted to take for the state and local income or sales taxes they have paid.
That deduction, according to the latest Internal Revenue Service data, was taken by 42,502,130 tax filers—or 95 percent of the 44,671,840 tax filers who itemized their deductions in tax year 2015.
The deduction allowed those 42,502,130 tax filers to reduce their federal taxable income for 2015 by a combined $351,163,796,000.
The tax reform framework that the White House, the House Ways and Means Committee and the Senate Finance Committee agreed to in September said the tax plan it envisions “eliminates most itemized deductions, but retains tax incentives for home mortgage interest and charitable contributions.” It did not say it would retain the deduction for state and local income and sales taxes.
The Senate version of the fiscal 2018 budget resolution, which the House approved by 216 to 212 vote on Oct. 26, specifically envisions “changes in federal tax laws, which may include reducing federal deductions, such as the state and local tax deduction.”
(Excerpt) Read more at cnsnews.com ...
96% of those between $75k and $100k who itemize take these deductions, again in every state.
Overall, 44 million people itemize their taxes. They will lose these deduction AND the personal exemption to boot.
Additionally Republicans in Congress still will not forswear a reduction in the maximum 401k exemption down to $2,400. That's a net increase for many in the middle too.
And it's REPUBLICANS who are raising taxes on the middle class in order to pay for the Corporate tax cut and the reduction in the top rate.
And the Social Justice Warriors on Free Republic are cheering them on.
$351 BILLION DOLLARS..........................................
What you meant to say is if the tax plan is passed it may guarantee Trump’s legacy as one of the most successful US presidents of all time, so we have to make up lies about it, and fast.
Because nothing says “freedom” like having to pay taxes to the government on the income you use to pay taxes to the government. /s
Please, nobody explain calculus to Congress. Before you know it, we’ll have to pay income tax on the income we use to pay income tax on the income we use to pay income tax ... ad infinitum.
And they want to do this retroactively right?
So we have to come up with the extra $ pretty quick.
I can’t handle all this “relief” we’re about to get!
Go to a flat rate, national sales tax, something simpler than the ridiculous nightmare we currently have - deductions? Get rid of them all.
I sure hope you are right that all the stories about the tax plan are lies because every one I've read makes it look like my taxes will skyrocket. No funding for the wall, still have Obamacare, and my taxes go up? Not what I was expecting.
I don’t care.
I want it overhauled. And nit-picking it to death will make it as bad as what we’ve got.
So... If your state has high taxes, this would finally be the good incentive that I’ve needed to move.
There is no use getting all worked up about this until we know the details.
Just because some deductions may be eliminated, doesn’t mean your taxes will automatically go up. As a theoretical example, what if the tax rate was 5%, but deductions were going away. Would you still complain? I am merely using that as an extreme hypothetical, but until we have a plan with the rates and the thresholds for the brackets, just saying “they are eliminating deductions” is meaningless.
I do favor some plan that lowers most taxes at all levels, but shifts some of the subsidizing we do for high income taxes in far left leaning states. That plan would entail lower tax rates and higher income thresholds for those rates, while eliminating state income tax deduction.
I’m not going to get all worked up in a lather by hearing bits and pieces of gossip regarding what may or may not be in the tax plan.
I will look at the tax plan as a whole and then decide. The Republican have to know that they have a lot — a lot! — riding on this. There is very little margin for error for them. If they screw it up they will almost certainly lose their majority in the House and put the Senate at risk of losing seats.
This is a high stakes proposition they are working on and they had better get it right. Until I see the whole plan I’ll stay calm.
A higher standard deduction should make up for most.
If NJ want to tax me 60% and the Feds want to tax me 50%, what should I do? (I know: move; but before I do.)
ML/NJ
You purposefully left out that the standard deduction will be doubled. That is the sort of thing the MSM does.
Agreed.
Flat rate of 10%, and eliminate witholding.
Pay your taxes once a year and the form fits on a postcard.
Of course, we don’t get the deduction in New Hampshire - BECAUSE WE DON’T HAVE SALES OR INCOME TAX!
I’ve lived in states with both, and it really just gives the pols more money to piss away.
I recommend you contact your state legislators and ask them to repeal your income and sales taxes right away - you really won’t miss them at all.
I like Herman Cain’s 9-9-9 plan AND the Penny plan.
That would set the economic blender on puree.
Everybody wants a flat tax until you mention taking away their deductions.
Then there is the whole point of the Federal Tax Code subsidizing those states who have no budgetary control whatsoever. You don't like the fact that your state taxes are too high? Don't look to the Feds, look to your statehouse.
The deduction needs to stay, let’s make this a tax cut, not a new tax.
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