Posted on 01/09/2018 4:45:12 AM PST by Kaslin
Liberal Democrats, panicked over voters’ responses to their anti-tax relief agenda, now want the federal government to subsidize quick political victories for them in November. The fear is that taxpayers will realize that the Trump tax plan is a tax cut and not a tax hike as Democrats have been saying.
After telling us for years that avoiding taxes was unpatriotic, Democrats in high-tax states are now pushing Washington bailout schemes so their rich constituents can pay less. The truth is that the Trump tax plan will create pressure on high tax states to lower taxes, creating a win-win proposition for middle class taxpayers of high state and local taxes like New Jersey, New York and California.
Democrats voted en bloc against the middle-income relief package because it didn’t provide enough tax breaks to the wealthy. For example, Sen. Dianne Feinstein (D-Calif.) referred to the bill as the “#GOPTaxScam” because it “caps the mortgage interest deduction at $750,000 for new mortgages.” That was an excuse for some liberals to oppose this tax cut bill and to falsely claim the new law will be a tax hike.
The Tax Foundation has studied the impact of these tax cuts and have found that in every income group, taxpayers will get a big tax cut. The Cato Institute’s Ryan Bourne makes the case that the Trump tax plan “could improve state tax systems too” by putting “pressure on states to reduce spending—a feature of this reform, rather than a bug.”
Perhaps the funniest example of a Hail-Mary solution being proposed to appease voters before the upcoming November congressional elections came in New Jersey last Friday. Liberal Democrat Josh Gottheimer, who represents a district that went red for President Donald Trump and Republican gubernatorial candidate Kim Guadagno, came up with a knee slapper.
Stalwart conservative Steve Lonegan, who is running against Gottheimer in the 2018 election, recently came out with an op-ed in The Record that debunked every anti-tax reform argument in liberal’s like Gottheimer’s arsenal. According to Lonegan, middle-income New Jersey families’ incomes will rise by 15-percent more than the national average because of Congress’ tax relief effort.
Gottheimer is not alone and he is parroting the desperate talking points of many other liberal Democrats who are going to have a hard time convincing those who see their taxes reduce that the Trump tax plan was a tax hike. Liberal politicians realize that the old excuses won’t fly anymore; not with conservatives running for office who are fact checking these false claims.
In this closely watched New Jersey race, last week, just days after Lonegan promoted tax relief, Gottheimer held an event with Governor-elect Phil Murphy in an attempt to distract from the arguments liberals made before the Trump tax plan was signed into law. The duo announced their big “fix” to this whole political dilemma: loot more money from the federal government to create the illusion that they’re cutting taxes.
Like New Jersey’s state income tax, the federal tax relief bill has a $10,000 property tax deduction. The only difference is that Congress generously allows residents to include state and local income and sales taxes in the write-off. High tax states are finding ways to justify high state and local taxation and have promoted creative ideas that will preserve the high taxes while avoiding the cap the Trump tax plan imposed on the deduction of state and local taxes.
Gottheimer and Murphy mimicked the plan that California is pushing right now. The two announced their intent to create municipal charitable funds that homeowners can “donate” to. This way, New Jersey can take advantage of the federal charitable deduction and thus provide 100% or near-100% credits to residents’ property tax bills. A better solution would be for New Jersey to engage in a Trump style tax reform by reducing state and local property taxes. The people of New Jersey are taxed too much.
Under the liberal bait and switch plan, the money collected by these new “charitable” groups wouldn’t go to charities, it would go to New Jersey to fund a big government. Gottheimer, like so many other liberal Democrats, have embraced class warfare and have called for higher taxes on people who have jobs. He endorsed Phil Murphy’s platform in Murphy’s run for governor despite the candidate’s calls for $1.3 billion in new state taxes. Without this new charitable plan, the congressman and his governor would have no way to pawn their financial problems onto Washington and keep their high tax-and-spend agenda afloat.
Gottheimer claims this new plan will bring true tax cuts, but in reality, nothing’s being cut – the federal government is just picking up the tab and the people of New Jersey are getting fleeced.
Liberal politicians in high tax states are trying to find new ways to continue the high tax policies of their states. The latest idea of setting up de facto government entities called “charities” is not a good solution.A better one would be for the people of high tax states to repeal the tax and spend liberal policies that are bankrupting these states and replace them with innovative new politicians who want to make government smaller and keep taxes low.
...check with Obama,he stole all your
campaign funds...azzholes
Oh sure. And rainbows will settle on every house, and chocolate will fall from the sky.
People in New Jersey are going to get killed by the Tax Deduction Elimination Act.
Will there be economic growth? Yes. Who isn't for that?
But let's be clear: this law cuts the corporate rate from 35% to 21%, and sends the tab to "pay for" these cuts to individual filers by eliminating or capping most of their significant deductions. Hence, they will be paying more in taxes.
The problem with your premise is that everyone doesn’t own a home, and everyone that does doesn’t pay more than 10K in taxes on their home, in NJ in 2016 only 64% owned their own home and that % is falling.
Property taxes increased by more than $700 million across New Jersey in 2016, the most in six years, according to a New Jersey 101.5 compilation of tax data.
That added $196 to the average residential property tax bill, a 2.35 percent jump to $8,549. That’s the same percentage increase as in 2015, which was the most since 2011. That property tax would be covered by the tax law provisions for those that itemize.
NJ property taxes up $700M in 2016 — See how your bill compares | http://nj1015.com/nj-property-taxes-up-700m-in-2016-see-how-your-bill-compares/?trackback=tsmclip
The new tax rate is lower and more of the first $ are sheltered so the same income will generate less tax. Add that break to the 10K of property tax sheltered and the first 11-12K of property tax is essentially sheltered.
It all depends on how the numbers break but I dare say many if not most in NJ will pay substantially less in tax as will the majority of Americans. The % that itemized in NJ has been higher than in the rest of the country but only 65% of those earning greater than 200K. The AMT dampened the value of itemizing for a significant %. Many who had itemized will still see lower tax bills.
Your other point, the shift of liability from the corporations to individual filers is similarly flawed because it assumes BO, aka Zero’s, assumption about cutting the pie rather than growing the pie is the only scenario.
Some #’s from 2011 (home ownership rates have fallen since then) See link for others.
New York
> Homeownership rate: 53.3 percent
> Median home value: $306,000
http://www.nbcnews.com/id/44822131/ns/business-real_estate/t/states-highest-lowest-homeownership/
https://www.census.gov/quickfacts/NJ
Doesn’t the IRS have to approve these charitable entities?
My personal belief is that the reason some folks in high-tax states are enraged over the tax legislation is a combination of ignorance as to its true effect on them and the FACT that the “spread” between federal taxes paid by itemizers versus the taxes of those claiming the standard deduction will lessen. In other words, most taxpayers will be having their federal taxes reduced but itemizers’ taxes will not be reduced as much as the taxes of people claiming the standard deduction. IMHO, that’s a strange reason to be angry.
Yes...and you can bet that Trump is all over it! That’s in his wheelhouse and he’s an expert on financial schemes. The funniest thing is that the stupid liberals publicized their new “genius” trick. It, and all the other ones they come up with will be slapped down by the IRS. more to come...
That means the $10K deduction is useless to them.
Non-partisan tax foundations estimate that only 5% of filers nationwide will now itemize. Why was the tax bill written and constructed this way?
So that a massive portion of the tax burden could be shifted from corporations to individuals. That’s why. And, corporations still get to deduct their full SALT taxes at the Federal level. So claiming that deduction is “a subsidy” for families, but a God given right for Facebook and Google?
So corporations, who already made out like bandits with this bill, get to retain deductions that were taken away from middle class families.
Even Conservative author, Attorney, and radio host Mark Levin said this was NOT what Trump and the Republicans in Congress ran on. Families that bought homes and budgeted based on 100+ years of assumptions had the rug pulled out from under them in a bill that was rammed through so quickly it had scribbles in the margins when it was voted on at 2 am.
Nice. What I still don’t understand is why many in the GOP and here demand that everyone who is screwed by this law has to be happy about it?
Blue states love high taxation, let them drown in it. Passing on the burden to other states was immoral.
Keeping more of your own money from IRS confiscation is “immoral”?
Keep the burden within the state. Deal with the ‘confiscation’ at the state level. Don’t pass the ‘confiscation’ on to other states.
Thank you for your thoughts.
And you as well my friend.
I think Levin is angry because he will personally pay more. I think it is a good thing that people will start seeing what their state taxes actually cost instead of writing them off. Who knows? Maybe it will make people in high tax states more open to electing people that lower their state taxes.
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