Blue-state lawmakers launch effort to repeal SALT cap

Politico ^ | 2/11/19 | RYAN HUTCHINS

[Libloather]

SADDLE BROOK, N.J. — New Jersey Sen. Bob Menendez and other members of the state’s congressional delegation announced legislation Monday that would repeal the cap on state and local income tax deductions enacted as part of the Tax Cuts and Jobs Act, H.R. 1 (115).

Menendez (D-N.J.) and Rep. Bill Pascrell (D-N.J.), the primary sponsors, say their bill would pay for the cost of removing the $10,000 cap by restoring the top income tax bracket to 39.6 percent. While that’s likely a nonstarter with many in the GOP, Rep. Chris Smith (R-N.J.) — New Jersey’s only Republican congressman — is also sponsoring the legislation.

The lawmakers said Monday there was anecdotal evidence middle-class Americans in high-tax states were seeing their federal tax bills increase as a result of the limit on such deductions, known as SALT. The legislation enacted last year by President Donald Trump is hurting, not helping, many taxpayers, they said.

[ConservativeMind]

All the tax brackets are lower than before, so they pay less on everything, if not on just their property tax deduction.

[SoConPubbie]

The SALT cap was put in place to keep Socialist Hell holes like MA, CA, NY, IL, from using it to pass on the costs of their excessive spending to other better managed states via Federal Taxes.

It is a Good thing!

[usconservative]

Your CPA is skimming massive dollars from you. The brackets are incredibly different and there is no current 25% bracket.

I'll let him know you said so. And you're correct, there is no 25% tax bracket for 2018. If your whole argument going forward is I was 1% off, guilty. Now what? BTW, it freaking disgusts me I'm above the 24% tax bracket now. Under the old tax law I was far, FAR below that. Don't like this "tax cut" at all.

[Mariner]

There are those that do.

Approx 23% of the people in Texas claimed SALT, with an average deduction of just over $26k.

https://www.pewtrusts.org/en/research-and-analysis/data-visualizations/2014/federal-tax-deductions-and-credits?utm_campaign=LM+-+GP+-+FFI+-+Tax+Interactive+SALT+Grps-+10+31+17&utm_medium=email&utm_source=Pew

Now many of those were kept whole by lower rates and a higher standard deduction.

But by no means were all of them. We’re talking about over 5 million filers.

[Mariner]

“The SALT cap was put in place to keep Socialist Hell holes like MA, CA, NY, IL, from using it to pass on the costs of their excessive spending to other better managed states via Federal Taxes.”

Texas is in the top 6 states for those who claim SALT.

It’s a function of large cities, suburbs and high incomes.

Plus the SALT deduction was taken by filers in every state in the union.

In fact, there was a time when not even the progressive Democrats of the Roosevelt administration would advocate for taxing monies that were used to pay taxes.

Even they considered it immoral.

But I guess there are Freepers with a less ethical view of taxes than a Roosevelt Democrat.

[sparklite2]

Flyover country shouldn’t be a piggy bank for coastal welfare states.

[Fledermaus]

Bull. Lies. Not here in TN for the vast majority. Our low state sales tax and no income tax makes that deduction useless with the large federal standard deduction.

[jospehm20]

We don’t have a state income tax. Since the median household income for Texas was $59,206 in 2017, I have a very hard time believing that 23% of the people in Texas make enough to worry about the SALT deduction being capped at $10K.

https://www.deptofnumbers.com/income/texas/

[Fledermaus]

Oh, the state sales tax deduction for us in TN is only about 6 years old.

So again you lied about filers in every state using it.

[Mariner]

“Flyover country shouldn’t be a piggy bank for coastal welfare states.”

The coastal states support the flyover welfare states.

Edify yourself.

[OldGoatCPO]

Under Obama I ended up owing Uncle Sam five figures. Under Trump Uncle Sam owed me and by next year just in tax returns I will have paid in full my Obama tax debt. If you are in high property tax liberal states, you will get hit. State and local elections have consequences too.

[Mariner]

Texas was in the top 6 states that claimed SALT, in fact was #4.

Whether you believe it or not.

Millions of ‘em.

[Mariner]

” Not here in TN for the vast majority.”

That’s what everyone says, and I agree.

Probably 80-90% of those over $100k got a tax cut.

10-20% got a tax increase. And there’s some in every state of the union.

[House Atreides]

There is no 25% bracket. That existed for the prior year’s taxes.

“The old tax brackets were 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.

The new 2018 tax brackets are 10%, 12%, 22%, 24%, 32%, 35% and 37%.”

https://www.mydollarplan.com/tax-brackets/
***************************************************
Busted! I suspect we’ll see more folks try to BS on this issue.

[jospehm20]

You may want to relook your numbers. According to the link below Californians claimed over 20% of SALT deductions, Texans claimed 4%. The average percentage of AGI for people who claimed it was 8.1 for Californians and 2.8 for Texans. I absolutely don’t believe that capping it at $10K hurts many people in Texas.

https://taxfoundation.org/salt-deduction-benefit/

[jospehm20]

Maybe by number of people claiming it but it is in the bottom half by value.

https://taxfoundation.org/salt-deduction-benefit/

[ConservativeMind]

I think you are comparing total tax as a percentage from 2017 against your marginal tax rate in 2018. With similar income and excluding SALT issues, unless your kids are above 17 but still counted on your taxes, you should pay the same or less in total tax as a percent of your income.

Take a look at what both are for the same thing, and I think you’ll be a lot better off than you realize.

[usconservative]

I think you are comparing total tax as a percentage from 2017 against your marginal tax rate in 2018.

No, I'm not.

With similar income and excluding SALT issues, unless your kids are above 17 but still counted on your taxes, you should pay the same or less in total tax as a percent of your income.

I posted previously that I'd reduced my SALT issues by selling my previous home, downsizing, cutting my property tax by more than 50% and getting myself under the cap.

It is an "anomaly" that those of us in high SALT states get pushed up a tax bracket at the Federal level.

I'm not a CPA, I cannot explain it the way my accountant and financial advisor can. Damn' sure wish I could, it would make this conversation a whole lot easier.

There most certainly is a day of reckoning for states like Illinois who are going to have to deal with the over-taxation we have in this corrupt state. Currently Governor McCheese (as I call him, find a picture of J.B. Pritzker and you'll see what I'm talking about) is trying a scheme to reduce property taxes while implementing a progressive income tax. That'll really screw people like me (high income earners, empty nester, no dependents other than myself.) They're trying to play a shell game here, most people aren't falling for it which is why Illinois is a net-outflow state. We're losing far more population than "gaining" and for damn' good reason.

That's Governor McCheese in the middle. Doesn't he look just like Mayor McCheese of McDonald's fame? I think he does.

[kearnyirish2]

In the same way, there are many people here in NJ who are not hurt by it (because the new standard deduction is so much higher). People are assuming, and the “news” is reinforcing, that anyone with taxes over $10K is being hurt by the new tax law. If married couples can deduct $24,000 right off the bat, then they can have property taxes of $12,000, state income taxes of $7,000, and still come out ahead (without itemizing).

A lot of deception here.

[Hardastarboard]

Jaybee the Hutt