This Is Rich: Democrats Fight To Protect A $1.8 Trillion Tax Break That Benefits The Top 1%

Investors Business Daily ^ | October 23, 2017 | Editorial Staff

[TBP]

What do you call a tax break that delivers 88% of the benefits to upper-income families and subsidizes rich states at the expense of poor ones? If you're a Democrat, you call it a sacred cow.

One provision of the Republican's tax-cutting plan that has drawn intense opposition from Democrats is the elimination of state and local tax deductions for those who itemize.

Rep. Nancy Pelosi said it was "an insidious effort to raise taxes on middle class families … across America." Sen. Ron Wyden said that "hardworking middle-class folks are not going to appreciate Congress double taxing them." New York Gov. Andrew Cuomo called it "a pure tax increase."

So what is it that Democrats are valiantly trying to protect?

This SALT deduction, as it's sometimes called, will cost the federal government $1.8 trillion over the next decade, according to the Tax Foundation.

And the benefits go almost entirely to upper-income families.

[The Cuban]

Worst mistake this country made was readmitting you to the Union

[central_va]

Agreed. Mr Lincoln’s bloody war was totally unnecessary.

[Svartalfiar]

If you file a Form 1040, and itemize deductions on Schedule A, you have the option of claiming either state and local income taxes or state and local sales taxes (you can’t claim both). If you saved your receipts throughout the year, you can add up the total amount of sales taxes you actually paid and claim that amount. **Or, the following link, that this is from, has a sales tax calculator that estimates your sales tax based on income and zip code.**

https://www.irs.gov/credits-deductions/individuals/sales-tax-deduction-calculator

[Svartalfiar]

The standard deduction is for lazy fools. (or the stingy that give little or nothing to Yehova)

Not necessarily. Most of my deductions go on my Schedule C. So my 1040 only adds up to maybe $3k in deductions. Makes way more sense to take the standard, since it stacks on the Sched C.

[Svartalfiar]

Incorrect. Read my post 163. While TX doesn’t have income tax, it does have sales taxes which you can deduct instead.

[Robert A Cook PE]

Yeah, right.

The IRS claims I spent 1064.00 on sales tax in a county where state and county sales tax = 7%. On an income of 125,000.00

Paid 5,500.00 (so far) in state income taxes.

Now, figure I’m not buying a car, nor a house or other sales items like that. 48% of my income is in taxes - though that includes the matching 6.5% of the Social Insecurity taxes that I would have been paid, and will never get back.

So, 50% of my income is taxes, leaves roughly 60,000.00 to spend.

1/2 of that is on already-taxed items like gasoline and telephone/cell phone/internet/natural gas, water, electricity.

So that leaves 30,000.00 to spend locally. At 7% sales tax spending 30,000.00 = 2100.00. Minimum.

The IRS is - again - dead wrong.

[editor-surveyor]

.
You’re probably missing loads of deductions.

The sched C is important, obviously since that income is double-taxed (income tax and SS tax) but I usually have about the same amount on A and C.
.

[Svartalfiar]

You’re probably missing loads of deductions.
The sched C is important, obviously since that income is double-taxed (income tax and SS tax) but I usually have about the same amount on A and C.

I could be, but I don't have a lot of big-ticket items. My health/dental expenses are an eye exam and a box of contacts. Insurance (Tricare) is cheap and can go on Sched C. No home (buying one here soon though) so no mortgage interest. No student payments. Rent is a partial deduction on C for home office. Job expenses are C. I have some charitable giving but not several thousand.
Altogether it only added up to maybe $4000. (Sched C I was able to take off a good $1k or so.)

Any suggestions for deductions to maybe look for?

[Svartalfiar]

Is any of that going into savings or investments? Charitable donations? (Another deduction, but it lowers $$ available to pay sales taxes.) Birthday/Christmas giving (cash)?

I’m sure the IRS calculation is low, but it’s intended to be that way. Outside of major purchases (Vehicle, renovations, etc) who is actually going to save every single receipt and calculate their sales tax at the end of the year? So, if they have an easy way to figure your numbers, but ‘charges’ you for the convenience, most people are fine with that, and they’re happy cause they can squeeze more $$ out of you. If you want to save every receipt and actually calculate your sales tax (and hope it’s more than income taxes!), great. If not, their calculator can at least get you a small deduction that’ll save you $200 or so you wouldn’t have otherwise had confiscated from you. And I’m ‘happy’, TX has no income tax so my deduction is definitely going to be sales taxes! (Thinking next year I might actually start saving receipts, but that really is a pain.)

[Svartalfiar]

(Sched C I was able to take off a good $1k or so.)

Make that $12k. Much more tax savings!