Posted on 10/26/2017 8:26:53 PM PDT by House Atreides
I’ve noticed that a number of FReepers are having conniptions over the possibility that legislation reducing federal income tax rates will also ELIMINATE ITEMIZED DEDUCTION OF STATE & LOCAL INCOME TAXES (SALT).
I have a proposal for the new legislation. Have it give tax payers the CHOICE of 1) still deducting SALT but STILL ALSO using the current (i.e., unreduced) tax rate tables or 2) not deducting SALT but having their taxes computed using the new reduced rates.
Having worked in systems development for a number of years, automating that feature could be relatively simple for Intuit (maker of Turbo Tax software) developers and their competitors to accomplish. They do something similar at the point where all itemized deductions have been entered and the software program tells them whether the standard or itemized deductions would be best for them.
If this proposal were included you could truly say (paraphrasing a certain former President) “if you like your current federal income tax rates and your SALT deduction, you can keep your current tax rates along with your SALT deduction”. Of course, some of those throwing conniptions about the potential elimination of SALT deductions would likely demand they keep SALT deductibility and also get the new lower tax rates.
All this does is give cover to blue state hellholes who can't manage their budgets.
Get rid of all federal tax deductions and let's have a simple 10% flat income tax.
ASnd how about that "great" DACA and amnesty crap in this Bill and the the fact that companies will still be able to deduct state taxes and more than just that?
Not gonna happen.
LOL — I’m guessing that you want to keep your SALT deduction.
That’s what I mean! I don’t want any deductions, credits, or loopholes in the federal tax system. Hard, nice flat 10% income tax would solve a lot of our problems.
The standard deductions are going to be doubled - this should mean that many people will no longer gain any advantage in itemizing their deductions and thus not need to consider SALT at all -in fact, the only taxpayers who will be hurt by this proposal are the relatively wealthy who pay very high local and state taxes and thus have itemized deductions higher than the new, higher standard deductions - since lefties are always complaining that Republicans want to lower taxes on the rich, it’s hard to see why they’d object to this idea.....
At this point, unless you are a straight W-2 employee, it is virtually impossible to complete & file a tax return w/o Turbo Tax.
Not being able to adjust to basis of long held assets for gov’t caused inflation is criminal.
its double taxation...a tax on a tax...
Not being able to adjust the basis of long held assets for gov’t caused inflation is criminal.
Good point.
True for state income taxes, less so for the wealth tax on property.
You’re right —we’ve used Turbo Tax for many years and find it indispensable.
“it’s double taxation....a tax on a tax...”
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That’s true. Just as it’s true for when my state (People’s Republic of Maryland) taxes our money that went to pay federal taxes.
No one wants to play for America.
If they up the SD to $24k it should offset for most people...
That would be an economic disaster. Bankruptcies would soar because of the collapse of the housing market because of the realization that the cost of mortgages increases. Banks would foreclose on housing which will threaten their solvency.
People’s simple solution are ill-conceived and not thought through. This is one of those.
In some ways TurboTax is very irritating, because it wants you to fill out worksheets and worksheets to develop worksheets and worksheets to develop your developmental worksheets. If you are a small business typically filing on a schedule C and know what forms you file every year, you can of course bypass much of that. But it has become quite a bit more cumbersome over the years. Still, the final math cross-checks and the ability to perform various what- ifs is quite valuable.
We want people to be able to deduct their children because children propagate the species and we need lots and lots of Middle Class working people in the future to pay for those on Social Security and Medicare who never had children.
We want people to deduct their mortgage interest because we want people to be homeowners People who own their own homes are more stable and ultimately build more wealth thereby increasing the wealth of the country and making more people middle class. This is a good thing.
We should eliminate SALT deductions because we want efficient and frugal government at all levels and profligate local and state spending is presently supported by the wage earners in low tax states. The states will be under pressure to reduce their profligate spending and taxes when the local citizens can no longer deduct their insanely high state and local taxes shifting the burden to lower tax states.
That is the theory anyway.
Marx, is that you? You've never heard of the free market in which these bloated housing costs would naturally get corrected?
Why should someone get something back from the Federal government anyway? Pay what you owe, and that's that. That would eliminate all the compliance costs and everybody would have skin in the game.
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