ALL such comparisons I’ve seen ignore the tax benefits the states receive.
For one instance the SALT deductions for businesses and individuals- which go to the states that supposedly “pay more”.
Hmmm... maybe the solution to the SALT tax problem with this bill is to remove the deduction from businesses?
Would be good policy encouraging businesses to move/expand into low tax states.
Best of all, of course, is that would not show up on people’s individual taxes.
Frequently business' relocating to high tax states cut deals, they don't pay those taxes. And then again when the deals run out.
Agreed... as a CA freeper, I ran my 2016 taxes under the proposed plan and would have paid $150 more in Fed Income Tax, but nearly $3K more in CA income taxes. I am nearly certain that the greatest tax impact this plan will have on those the media is saying it will impact most (upper-middle and high earned income MFJ in high tax states) will be on state income tax (due to a significant reduction in federal itemized deductions carried into the state formula and resulting in significantly higher state taxable income). And... there is absolutely ZERO chance states like CA, NY, or OR reduce state income tax rates or modify the brackets... free money to them. Which leads me to ask the question: Is the proposed structure specifically designed to get the producers in high-tax states to relocate by significantly increasing state tax burden? Heck, thinking about investing in real estate in no/low-tax states just at the thought.
Yes, I am certain that those deductions which basically are a pay back to the state via its residents are not accounted for in tax paid/federal benefit received accounting.