You Won’t Believe What Tax Reform Will Cost Wealthy Californians In 2019

Lots of people just talk about soaking the rich, but Donald Trump and the GOP actually did it — in California, anyway, although they won’t be alone. The controversial phase-out of the state and local tax deduction (SALT) will drop like a bombshell on high-tax-rate blue states, which is one reason why Democrats so staunchly opposed it. According to an analysis from California’s Franchise Tax Board, the Golden State will be Ground Zero:

President Donald Trump’s tax cuts will be anything but for about 1 million California taxpayers who will owe Uncle Sam more money a year from now.
They’re the Californians who will lose a collective $12 billion because the new law caps a deduction they have been able to take for paying their state and local taxes, according to a new analysis by the Franchise Tax Board.
Very wealthy Californians earning more than $1 million a year will pay the lion’s share of that money, with 43,000 of them paying a combined $9 billion.

It’s not all coming from the wealthy. Another $1.1 billion will come from households earning less than $250,000, hiking their tax liability $4400 on average. That’s not peanuts, but it’s a far cry from the average $209,302 per family that will be owed by those households earning more than a million dollars a year.

Put this another way. That represents the federal tax liabilities that everyone else in the country subsidized through SALT. The “progressive” income tax used taxes paid by people in low-tax states to repay the wealthy for their taxes in places like California. The SALT deduction really only comes into play for people who can itemize enough to outstrip the standard deductions, so its benefit plays mostly to the wealthy anyway.

It also plays mostly to the benefit of a very few states. California and New York taxpayers soak up almost third of all benefits from SALT deductions; add in New Jersey, Illinois, Texas, and Pennsylvania, and they account for more than half of its benefits. Taxpayers in most other states end up footing the bill.

Not only do other taxpayers end up subsidizing the wealthy, they also indemnify blue-state politicians against the consequences of their tax policies. Next year, taxpayers in California, New York, and other high-tax states will have to truly pay for their own taxes rather than foist them off on everyone else. When that happens, will high tax rates be politically sustainable? Will the political party that insists on the rich “paying their fair share” celebrate the impact of the rich actually paying their fair share? Probably not, which is the real reason Democrats are running on the repeal of the tax cuts.

That will likely prove to be a very popular platform … in California and New York. Among the millionaires. And the Democrats who run those states. For now.

If wealthy Californians would read FRee Republic, they would know that much of the federal taxes that they and all US taxpayers pay are unconstitutional, taxes that the corrupt, post-17th Amendment ratification Congress cannot justify under its constitutional Article I, Section 8-limited powers.

"Congress is not empowered to tax for those purposes which are within the exclusive province of the States."—Justice John Marshall, Gibbons v. Ogden, 1824.

And to put a stop to unconstitutional federal taxes and make Pres. Trump's vision for MAGA last for many generations, wealthy US citizens need to work with their state lawmakers to support Pres. Trump in leading the states to repeal the 16th and ill-conceived 17th Amendments.

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