Posted on 10/24/2017 8:43:48 AM PDT by george76
Tax Reform: What do you call a tax break that delivers 88% of the benefits to upper-income families and subsidizes rich states at the expense of poor ones? If you're a Democrat, you call it a sacred cow.
One provision of the Republican's tax-cutting plan that has drawn intense opposition from Democrats is the elimination of state and local tax deductions for those who itemize.
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Fewer than 22% of tax filers even claim the state and local tax deduction, and the vast majority of these are higher-income families. While 78% of those with incomes above $200,000 claim the deduction, just 7% of those making between $30,000 and $40,000 do. For most taxpayers, the standard deduction is more valuable.
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Those earning more than $200,000, the SALT deduction cuts their federal tax bill by an average $6,295. For those with incomes of between $100,000 and $200,000, it's just $857. Those earning from $30,000 to $40,000 get an average of $93 off their federal tax bill.
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The benefits of the SALT deduction are heavily skewed toward wealthy high-tax states, for the simple reason that the more someone pays in state and local taxes, the more they can deduct from federal income taxes.
In fact, just seven states — California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York — account for more than half the deduction's cost, according to the Heritage Foundation. California alone is responsible for almost 20%.
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In effect, then, the SALT tax break has turned into a massive federal subsidy of profligate liberal states, paid for by fiscally conservative states.
That's why Democrats are so determined to keep it. Not because they care about working class families, but because they don't want to see their rich friends who live in deep-blue states get hurt.
(Excerpt) Read more at investors.com ...
“These states have 34 Republican representatives in Congress, out of a total of 248.”
And they will ALL vote NAY! Along with every Democrat.
I’m with you, this SALT stuff is a non starter and full of propaganda beyond fact. Doubling the standard deduction would not come close to countering the SALT and Interest deductions I claim.. and I am not in a high income tax state or have an expensive home.
This whole SALT business is a non starter... no way I buy their numbers on this.
Ummm
The people who claim this “ tax break” are almost all the top 10%
Who actually pay 70% of all federal tax
In order to give “ tax breaks” shouldn’t it be to the people who pay taxes?
D’ OH
Toss in the loss of personal exemption and the 401k cap and the whole middle class is hosed.
DJT must have something on him..
Bookmark
I won’t waist the time to review until this is ready for passage but I do feel everyone earning over 5K should pay taxes.
That number is from a questionable 2007 study based on 2005 numbers.
"In January 2017, the California Legislative Analyst’s Office said by several measures California is, indeed, a donor state, but just barely. It receives $0.99 in federal expenditures per dollar of taxes paid, which is below the national average return for states of $1.22 per dollar paid, according to its review of a 2015 New York Comptroller study."
Yes, but then the AMT rolls it back anyway....
not if you are a democrat. Those people should pay more and we should return more tax credits to those who pay no tax at all. We are in upside down world.
Boy, I didn’n know I was living “High on the Hog”, living in NH and working in Mass.
I guess there goes my 4K deduction of state income taxes to Mass off my federal Income taxes.
Guess I’ll have to give up my yacht.
Don't forget Illinois. These states use the high income tax to instill their ubber liberal social /sanctuary programs. Programs the recipients then transplant when they move to more conservatively run Red states.
Of course they will. They have a good job, why jeopardise it? Their voters didn’t send them there to take away the goodies that they have already - they want more goodies!
” we should return more tax credits to those who pay no taxes at all”
Whatever you choose to call forced income redistribution, please knock off calling it “ tax credits” .
Get real
Exactly. Here on Long Island the local govts and school districts justify their high taxes by telling us we will get 25 to 33 percent back after deductions. And for most that is true. One of the realities that Dems never admit is that deductions for local and state taxes are in reality federal monies going directly to state and local govt. Meaning that NY, Ca et al actually receive far more monies from the feds than they claim to. And that the argument that these states send more money to Washington than they receive in return is totally bogus.
Many conservative, hard-working citizens eek out a living in those states.
And totally ignores that the cost of living in those states are proportionately higher which kind of balances the higher income of some along with the fact that those making more also pay more in taxes to boot. And I think it's irrational to call someone or a couple making $200k a year rich.
This is just socialist playlist to encourage class warfare, it's just a step up from the "It's not fair that rich people get a tax break while low income people(who pay zero taxes, but get gov. freebies) don't."
I am not saying that this is how you think, but should we build the tax code to benefit the country, are just a few people?
When is raising taxes on the middle class to the benefit of the country?
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