Posted on 12/06/2017 2:19:53 AM PST by JayGalt
The Republican tax overhaul will not be the punishment expected by many residents of high-tax, Democrat-voting areas. Many of those who have the most to lose from the elimination of state and local tax deductions will actually come out ahead under either the House or Senate versions of the bills.
Many residents of places like New York City, which couple high taxes with high costs, fear the provisions of both bills that would eliminate or reduce the deductions they receive for the income and property taxes they pay locally. The Senate bill would preserve a property tax deduction up to $10,000.
The New York Times recently published an alarming story about the loss of the deduction, describing it as a “dagger aimed” at New York City and its neighbors. But closer scrutiny reveals that this is overwrought. Although some New Yorkers might lose under the GOP tax bill, many would win.
...snip...
Under current law, a taxpayer with $500,000 of income and $30,000 in annual mortgage interest payments on a $1 million home, would face a tax bill of around $130,000 — after the deduction for state and local taxes. The House bill would see this shrink to around $123,000. The Senate bill would shrink this to around $112,000.
(Excerpt) Read more at breitbart.com ...
I still live in New York most of the year. Depending upon which online calculator I use and whether the AMT is repealed, my taxes will drop between ~$850 and ~$5,800.
Which calculator? I made my own, trying to account for everything in the Senate bill, and it was quite difficult to come up with bad scenarios - there were some, but most bad scenarios were marginal.
It wouldn’t surprise me if some of the calculators were put out by CNN.
Spitzer was loaded and paid for the whores himself
It was posted here on FR.
You need to get over your obsession over “Jivanka”. It’s very unseemly and just a little bit deranged, given how little I am sure the house and senate legislative authors consulted with “Jivanka” in writing their bills. I doubt most gave “Jivanka” any consideration whatsoever.
Yea, I think that I remember that thread. I’ll try to dig it up.
Are you implying that the New York Times lied to push a political agenda????
Does a bear....?
Ivanka got a massive new write off in for rich parents sending their kids to private school.
There’s no reason for you to make erroneous proclamations you know noting about.
State taxes and federal taxes are two distinct items, unrelated. To mingle them, and having one affect the other, should never have happened. If NY wants to have exorbitant taxes, they need to accept the responsibility and not expect the feds to cover obfuscate it for them.
New Yorkers with more modest incomes will also come out ahead. A New Yorker earning $75,000 of income with annual mortgage payments of around $8,500 on a $250,000 home would owe around $6,450 under current law, after the state and local tax deduction. Under the House bill, this New Yorker would owe $6,120. The Senate bill is even better for this New Yorker, pushing the taxes owed down to $5,740, which means the Senate bill reduces this taxpayer’s bill by 11 percent.
It would really help if people who quote these taxpayer examples would give their calculations. According to this calculator, state and local taxes for New York City on a $75,000 income would be about $5,244. Assuming a 1.5% tax rate for the home would give $3,750. Plugging those numbers, along with a $75,000 salary, $8,500 mortgage interest, and married filing status into this calculator gives a Current 2017 tax of $6,478. If you then add $200 for Charitable contributions, you get a tax of $6,448.4, about $6,450 as the article states.
Now, if you select "Senate 2018" for "Tax Plan 2", you get a tax of $5,739 just about equal to the $5,740 stated by the article for the Senate bill. If you select, "House 2018" for "Tax Plan 2", however, you get a tax of $5,472, quite a good bit lower than the article's claim of $6,120. But if you change "Tax Plan 2" to "House 2017 w/o Family Credits", you get a tax of $6,120, exactly the number claimed by the article. Hence, it appears likely that the article is using an old, and possibly flawed, calculation for the House number.
In any event, going to the "Calculation of Taxes" tab gives the calculations. Following is the output for both the House and Senate plans, combined into one table:
Married, no children, 75000 income, 12450 itemized, 5244 repealed
Tax Plan 2017 House 2017b Senate 2018
1 --------------------------- -------- -------- --------
2 Wages, salaries, tips, etc. 75000 75000 75000
3 Tax-deferred contributions 0 0 0
4 Exemptions -8100 0 0
5 Standard deductions 0 -24000 -24000
6 Itemized deductions -17694 0 0
7 --------------------------- -------- -------- --------
8 Medical 0 0 0
9 State and local taxes -5244 0 0
10 Real estate taxes -3750 -3750 0
11 Home mortgage interest -8500 -8500 -8500
12 Charity -200 -200 -200
13 Misc. repealed deductions 0 0 0
14 --------------------------- -------- -------- --------
15 Taxable income 49206 51000 51000
16 --------------------------- -------- -------- --------
17 Tax on taxable income 6448.4 6120 5739
18 Child credit 0 0 0
19 Other dependent credit 0 0 0
20 Parent credit 0 0 0
21 Earned income tax credit 0 0 0
22 --------------------------- -------- -------- --------
23 Income tax 6448.4 6120 5739
As can be seen, the total itemized deductions are $17,694, less than the new standard deduction of $24,000. What if they were, in fact, $24,000? This can be accomplished by increasing the Real estate taxes, Home mortgage interest, and Charity to $5,000, $10,000, and $3,756, respectively. In addition, the tax plans should all be updated to 2018. The following table shows the result:
Married, no children, 75000 income, 18756 itemized, 5244 repealed
Tax Plan 2018 House 2018 Senate 2018
1 --------------------------- -------- -------- --------
2 Wages, salaries, tips, etc. 75000 75000 75000
3 Tax-deferred contributions 0 0 0
4 Exemptions -8300 0 0
5 Standard deductions 0 -24400 -24000
6 Itemized deductions -24000 0 0
7 --------------------------- -------- -------- --------
8 Medical 0 0 0
9 State and local taxes -5244 0 0
10 Real estate taxes -5000 -5000 0
11 Home mortgage interest -10000 -10000 -10000
12 Charity -3756 -3756 -3756
13 Misc. repealed deductions 0 0 0
14 --------------------------- -------- -------- --------
15 Taxable income 42700 50600 51000
16 --------------------------- -------- -------- --------
17 Tax on taxable income 5452.5 6072 5739
18 Child credit 0 0 0
19 Other dependent credit 0 0 0
20 Parent credit 0 -600 0
21 Earned income tax credit 0 0 0
22 --------------------------- -------- -------- --------
23 Income tax 5452.5 5472 5739
As can be seen, both the House and Senate plan now lead to an increase in taxes. Note that, since the new standard deduction is used in both cases, it doesn't even matter whether the deductions have been repealed or not. That is, the result will be the same, even if the deduction for state and local taxes is NOT repealed. This is due to the fact that the new standard deduction provides little or no benefit to this taxpayer ($400 for the House bill, nothing for the Senate bill) and the loss of the personal exemptions is larger than the gains in the tax brackets. The increase in taxes will become greater as deductions increase, assuming those deductions have been repealed. In any event, this shows that those who present taxpayer examples should be required to show their work. This both avoids errors and allows readers to see where the tax changes are coming from. This, in turn, allows them to see cases in which those tax changes will be different.
While he was working...
Thank you for your thoughts.
I trust POTUS Trump, I think running calculations without a passed bill is premature, and I think relying on calculators means buying into undisclosed assumptions. The Breitbart article is encouraging but it’s not soup until the bill is passed.
You moved to New York?
Who’s Jivanka?
You still posting your liberal nonsense?
You have stated over and over again, that you are against any sort of tax cut.
Jared and Ivanka.
I don’t think he worked very much
“Don’t be a blowhard claiming the blue states fail to pay their fair share.”
They do fail to pay their fair share because unless they pay nothing in federal taxes they can continue to pay more SALT and deduct it from their federal taxes.
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