Posted on 04/18/2018 1:52:05 PM PDT by SeekAndFind
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.
Besides, she has all the tricks on her side, like when they stole the street from that Asian couple who bought it legitimately at a tax auction because the HOA didn't know to keep up their payments.
-PJ
“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.”
About time somebody recognizes that property taxes in Texas are confiscatory. They don’t even have the state income tax so all of this SALT comes from their property taxes. No I must not be all of the state because Texas freepers swear up-and-down they pay hardly any property tax. But when we lived in Corpus Christi for one year we paid more in property taxes than we did in state income tax, property tax, and DMV fees in California.
Nevertheless, all these states need to put pressure on their state governments. It’s not the feds fault that they are overtaxed.
Last I knew he had a very nice (read: expensive) house in Michigan. Not sure if that is his primary residence or just a vacation property.
Good catch, I already responded before seeing your post. When we lived there our property tax was outrageous , 3 1/2% and rising. And that was in 2001!
I’m sure all the Hollywood actors will be thrilled to pay the higher taxes!
The super high-income people like Steyer in states like CA and NY actually lost about 80% of their SALT deductions way back in 2013. The Tax Act of 2012 included language that starts to limit the SALT deduction beginning at $300K of income for married taxpayers. So the Silicon Valley billionaires really got nailed by the tax bill passed at the end of 2012, but because democrats voted for that bill and Obama signed it, we didn’t hear all the bitching and moaning about lost SALT deductions. Also, that bill didn’t affect people with incomes below $250K. But it’s very telling how the news media has basically ignored the truth that many democrats voted for a big cut in SALT deductions way back in 2012 and yet they now say they’ve always opposed cutting the SALT deduction. Another bunch of BS from democrat politicians.
State income taxes are ridiculously high in California. I did a comparison with neighboring state Arizona a few years ago, and the state spending per resident was about 40% more in California. The gap is probably more today. Schools, roads, state police force, and all the other state services are about the same in those two states. Salaries and wages are roughly 10 to 15% higher in CA, but the other 25% is all unnecessary bureaucracy and even higher spending on illegal immigrants than in AZ. And yet the people of CA actually voted for even higher taxes a few years ago. There are a lot of neurotic crazy people living in CA now.
There is nothing that prohibits them paying more on their own. Why are they screaming? It's finally happening. The rich in California is paying more.
They need to scream at California Legislators who are taxing them too much. Not at the rest of us who have had to make up what they weren't paying. I bet their money is still going to Sacramento, and they aren't saying anything about that.
I’m gonna file this under “things that make me smile!”
There are 111 Billionaires in California. Most are likely those types.
Awe geeee! Poowah wittle commie Kalifornians. I feel so badly for them - NOT!
ESAD, you Marxist MoFos!
Exactly as it was designed. As a “screw you” to blue states that have been actively part of the lunatic “RESIST” movement. Hey, Kommiefornia and New Yecccch .. SCREW YOU!
Tax reforms that hurt the rich folks in California and New York City, while benefiting the folks in the middle of the country who work for a living?
As for Texas, once I got rid of my mortgage, it was always touch and go as to whether I would get any benefit from itemizing. I’ll come out ahead with the new structure.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.