Posted on 04/30/2017 4:46:57 PM PDT by MaxistheBest
The Trump Administration’s stated intention to eliminate the state and local tax deduction (SALT) is likely to meet major opposition from big blue states’ Congressional delegations. The New York Times reports:
To some, it is a tax on blue-state liberalism. To others, President Trump’s plan to end the federal deduction for state and local taxes would eliminate a costly perk for the wealthy.
But to many taxpayers, the deduction is a cherished break that can save them thousands of dollars in double taxation.
Mr. Trump and House Republicans, riding a wave of conservative and populist sentiment, are pushing to end the provision. Yet they must overcome a long tradition and powerful opponents, including Republican and Democratic officials in wealthy, populous states like California, New Jersey, New York and Texas.
The deduction overwhelmingly benefits six-figure earners. The benefit is largest for affluent people living in states that impose high income tax rates, which are much bluer than average.
(Excerpt) Read more at the-american-interest.com ...
Not complaining, just explaining. A six figure Income in Mississippi is completely different than one where we live.
I am flexible on moving out of CA, my Wife is not. Just lost my Father who lived near us, but my Wife’s Father is still going strong and lives a couple of hours from us. My Wife will not agree to move far away while he is alive.
I’ve also been dealing with Leukemia for the past eleven Years, and I really don’t want to switch Horses in the middle of the Stream when it comes to my Oncologist.
The guy has kept me breathing all these years. LOL
If your landlord doesn't figure those costs into the rent you are getting over. Most do!
I’m pretty sure the tax brackets will stay at least where they are. If he asked for a 25% tax rate BELOW where it is currently, the explosion would blow him out of office.
ANY tax plan will have winners and losers. There is no way of changing anything in taxes without some people benefiting and others losing. I fall just below where the 25% tax brackets kicks in, but would be willing to pay more IF the overall plan was fairer - which to me, means reducing the number of people who pay nothing.
That is politically unacceptable, I guess, but I’d like to see MORE people pay taxes - just less taxes per person. But the many who get thousands in benefits and pay nothing will never allow that to happen. I’d also like to ban withholding. Make people cough up their tax bill every April, and need to squirrel some money away ON THEIR OWN each month, then write a check...and I’d bet people would get a lot more interested in how much money government wastes.
I’d actually like to see a sales tax, with food and clothing exempted. But that will never happen, either. Certainly not as a total replacement of the income tax.
Rich states? They’re ducking federal taxes with high state taxes. Then they get a disproportionately high percentage of federal tax dollars paid to them.
What the tax break means is that it is being subsidized by taxpayers of states with lower state and local taxes, because without that perk the more expensive states would wind up paying more in taxes and the tax rate could be lowered, with the net revenue effect neutral.
In fact, doing it exactly that way as a tax change all on its own would prove the point - federal tax rates could be a bit lower, for everyone, without deductions for state and local income taxes. That would also prove the point that the blue states higher deductions are being subsidized by everyone else.
One of the big losses to many is going to be the property tax deduction since that can be much higher than the other state/local taxes for average income people.
If this is eliminated then states effected should permit federal taxes to be deducted from income for state taxes, otherwise you have double taxation. Extreme example: Pay 51% in state taxes, 50% in federal— take out loan to cover the extra 1%. I thought this was why they implemented SALT.
I’m an owner and former landlord. Owners of rental housing have to be competitive in their market just like any other business except they can’t relocate. Rents can go up $25 or $50 a year, but each neighborhood has it’s own ceiling - especially blue collar neighborhoods. Raise rent too much and it will sit vacant as vandal bait.
Yes, I can get some expenses back when I sell it IF I need capital gains deductions, but it’s still a cash expense up front for a lot of stuff. Equity gain doesn’t cover loss over the first 10 years of a mortgage, because all you’re paying is interest, with a few dollars thrown towards equity so you don’t feel bad. Renting a home that is paid off does give some profit, but again, you’re limited by the home’s age and neighborhood as to what your profit really is, and then there’s the taxes again. If your carrying costs are $500/mo in a neighborhood where the rent is $650 or $700, even if the house is paid off, you’re not making any profit. The only advantage I’ve found to renting a house out is enhanced credit rating.
I realize you weren’t complaining...Things do seem to have a way of working themselves out though...
Your income is already taxed more than once at the federal level. You pay income tax on all income and then both the FICA tax and the Medicare tax on your earned income.
An Old Guy that used to work for me always said “any day above ground is a good day”. He was absolutely correct. LOL
LOL...People ask me how are you???
I tell ‘em, “I got out of bed this morning...That was my FIRST great accomplishment...”
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