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.
As it stands now...the answer to your query is resounding HELL YES! I'll pay less Fed taxes that way.
OTOH...IF my bracket is lowered sufficiently, I might go with that; however, I doubt that that will happen.
But your alternative is NEVER even going to be suggested, so it's all moot and I'll just get screwed royally.
I guess we should be thankful that you’re not also in the business of manufacturing solar panels or producing ethanol or that would be even more subsidy reductions/eliminations for you to get pissed off at.
Ideally, to increase the efficiency of the national economy and the nation’s wealth, we should be moving toward eliminating as many subsidies as possible. If you subsidize something...you artificially get more of it. And the SALT deduction IS a subsidy; a subsidy of state & local taxes—whether you want to believe it or not.
The only way to solve anything is to keep it simple. 10% flat tax, no deductions for anything, and everyone would have some skin in the game. Anything else is just begging for nothing new to happen.
Very few people buy a house because of the mortgage interest deduction and with the doubling of standard deduction hardly anyone will need to deduct going forward
Seems like a scam for the feds to allow "breaks on State and Local taxes" so folks in the onerous States get their break on the backs of everyone else...
Good point.
No it is not and it is, in fact, a damned LIE!
Can you offer any reason to believe this, other than using your caps key?
Their budgets include the tax break and to remove it is an increase in taxes. When buying a house property taxes are undoubtedly a major consideration.
You are correct about the doubling of the standard deduction perhaps washing it all out for most people.
Their budgets include the tax break and to remove it is an increase in taxes. When buying a house property taxes are undoubtedly a major consideration.
You are correct about the doubling of the standard deduction perhaps washing it all out for most people.
This is one of the reasons Trump was elected he understands that theoretical explanations of market conditions do not put money in their pockets.
Most of us understand that there has NEVER been a free market in housing. A sudden increase in housing costs will cause disaster, there is no doubt about this.
It would be 2008 all over again should the real estate market collapse as it undoubtedly would.
In a small handful of states, sure. But most property taxes is around $2-$3k a year. Add $6-8k a year in interest on a typical $200k mortgage and say $2k in state income taxes, most middle class people are already at (or below) the CURRENT standard deduction for a married couple. Even someone like myself with very high state income tax (mostly due to high income - state ends up being about 5% of pre-tax) and a larger than average property tax, and I'm very likely to benefit from this new bill. Someone in my situation in SF or NYC will likely pay higher taxes. But we shouldn't be subsidizing state/local/interest anyway.
Then throw in the above taxes, deductions for charities, and whatever else people are now able to deduct now, and taxes on many people SHALL go up and do so greatly. Ergo...this is a tax INCREASE and NOT the promise, often touted "TAX CUT" AT ALL!
I use CAPS to make the words stand out. Don't like it, n00b? TOUGH!
Trump promised a TAX CUT.
This mess ( which we know little about, but as certain things in it dribble out, it gets worse ) is not what was promised. An across the board tax cut, with three brackets, was promised. Now some people will ( perhaps...maybe...who knows )get some help, others get screwed because of WHERE they live! And companies get great perks!
My ox is being gored!
Oh, I like killing off the damned DEATH DUTY, but that isn't going to help me any...just my progeny and who knows if that will even be in it/pass, or changed, again, later?
And now they're talking about "soaking the rich" again!
Three brackets went to four and maybe even five.
So before you make nasty, snide remarks about me, lets all wait and see just HOW badly this gets mucked about with and whether or not YOUR ox gets gored too.
Not to be “nasty” or “snide” but what your words are saying is, at their essence, “me! me! me!” — the same essence hidden in the words that most subsidy seekers and subsidy preservationists shout out.
Good point.
No it is not and it is, in fact, a damned LIE!
Can you offer any reason to believe this, other than using your caps key?
Forgetting about what people in high tax states pay to the state and in some instances to a city as well, and sales tax deductions too, there are many places where property taxes are very high;
As I recall, one can now deduct local sales taxes or income tax but not both. However, the point you make is also a good one.
taxes on many people SHALL go up and do so greatly.
Neither Intolerant in NJ nor I ever said otherwise - so where's the "LIE" you alleged?
I use CAPS to make the words stand out. Don't like it, n00b?
I like facts better.
I don’t think the 401K limitations are a done deal yet - certainly Trump keeps pushing back against them - unfortunately the federal tax system has been pretty much from the start one of compromises, tradeoffs, and inequalities - I would sure like a flat tax instituted, where everyone would have some skin in the game and the “rich” who now pay an inordinately high share of the taxes would finally get to pay a fair share, but I doubt it will ever happen and in the meantime we’ll always be dealing with balancing the interests of all sorts of constituents to try to get anything passed.....
Nor do you even have a vague idea about that which you are blathering on about! No...in this mess, you shall NOT be able to itemize and deduct city, state, and property tax! I'm not certain, but I don't think that sales tax is deductible either. And HELL NO...you can't pick & choose what you can or can not deduct! That was a sort of proposition thrown out there, but a poster, which is NOT in this TAX CUT FOR SOME mess!
And as far as my CAP usage goes...just deal with it, silently ! You don't own this site, I've been posting here, this way, since 1998, and I, as well as others here, have their own way of posting. It is what it is!
The only fact you've posted is that property tax is an itemized deduction - and that fact doesn't support your claim that any post on this thread is a "LIE".
one can now deduct local sales taxes or income tax but not both.
in this mess, you shall NOT be able to itemize and deduct city, state, and property tax!
Which part of "now" did you not understand?
“high tax state of Maryland “
Maryland is only a 5.75% income tax for $250,000 but graduated up to that, which is about average, not high.
The additional $12,000 Trump has for doubling the personal exemption says you’d have to make at least $500,000 for this to even begin to effect you.
County and city “piggy pag” taxes kill you in the DPRM. Democratic Peoples Republic of Maryland.
It does look (with what little we have to go on!) like a slice of upper middle class people in high tax states could be screwed. Unless a adjustment for them is made- which doesn’t look hard.
Californians will probably still take a hit though - there’s just too much wrong there.
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.