Posted on 11/10/2017 4:01:25 AM PST by SkyPilot
Congressional Republicans advanced two competing visions of tax reform Thursday, setting up a potentially bruising battle in the weeks ahead as they struggle to agree on a bill President Trump can sign.
With the Senate GOP's unveiling of its tax plan, key differences with the House version became apparent. Among the biggest potential losers in both plans are residents of California and other high-cost states, who rely heavily on itemized deductions for state, local and property taxes.
The Senate plan eliminates all such state and local deductions, while the House proposal retains property tax deductions up to $10,000. As a trade-off, the Senate version would preserve other popular deductions targeted for removal in the House plan, such as for medical expenses.
Both the Senate and House plans would lower the corporate tax rate from 35% to 20%, but the House would make the cut immediately, while the Senate would delay implementation for a year, until 2019, in order to save an estimated $108 billion.
There are also key differences in how new individual rates would be set, the repeal of the estate tax and a variety of other provisions.
Those and other discrepancies will need to be settled, while also making sure the tax breaks don’t add to the federal deficit by more than the agreed-upon $1.5 trillion over 10 years.
But Republicans appear motivated to fulfill one of their party’s top campaign promises. This week’s GOP losses in state elections served as wake-up call and could provide momentum to push for passage of tax legislation by Christmas, assuming they come to an agreement.
“This comprehensive tax reform will make a huge difference for America,” said Senate Majority Leader Mitch McConnell (R-Ky.). “This is going to be an extraordinary accomplishment.”
(Excerpt) Read more at latimes.com ...
In liberal terms, it sounds like California is a “tax shelter” used by rich liberal elites to “steal money from the federal government” so they can use it to push their personal agenda and the rest of us have to be taxed more because they “don’t pay their fair share”.
Just imagine what the LAT would say if the Cayman Islands had a high tax rate and rich people put their money there because they prefered Cayman Island policy over US.
There’s not much difference between the Cayman Islands and California to most fly-over country voters - both are using tax laws to avoid paying federal taxes. Our government has a simple way to stop one of them.
The GOP tax reform is just for the lobbyists/donors. It will guarantee massive Democrat wins in 2018 and 2020. Both parties, in sometimes different ways, are working hard to destroy the middle class.
Or maybe the residents of those high tax states, I’m one of them btw, could work to lower their local tax burden.
Failing that one could always get the hell out. Which is exactly what Clan Lurker is planning to do.
L
GOOD!!
Laughing at all this discussion on taxes. There’ll be no tax bill. Move on.
Sounds sensible but indexing for inflation leaves an opening to make up a false figure. Indexing social security for inflation has not come close to doing what it was supposed to do. The official inflation adjustment is far below what reality would require.
What sanctuary “blue” states like California and New York etc have been doing are using their SALT deductions to indirectly fund their social engineering programs at the expense of smaller states which were keeping their financial houses in order. Hence tax payers in those states because of these deductions were not holding their state politicians accountable for social engineering expenditures
Conservatives in the House bill attempted to cap and equalize those deductions which would allow voters in those states to review those expenditures and programs which is actually draining federal funds which could go to federal projects like defense and infrastructure or even health and wefare.
Can you show the same map in billions of dollars each state receives from the federal government?
Do the percentages include social security retirement payments?
Were the feds $$$ part of the percentages you showed? Is the federal carrot and stick approach getting funds into the states included where the feds run the program in the satte? The states are going to get certain federal funds whether they want them or not. The question is who (state or feds) are going to administer them. For example, if a state chooses not to administer OSHA, thereby letting the feds administer OSHA within the state, do the federal $$$ count for the state receiving federal aid in the percentages you showed? Last I knew NY had a bifurcated OSHA program - part was administered by the state and part by the feds. If the fed $ were not counted, then state aid received is under-reported. If they are included, it is hard to blame the states for receiving them because the feds “forced” the $$$ on them.
In other words, I am willing to consider the argument you made, which I have heard from some demoncrats too, but in either case I’d like to understand the underlying assumptions and how the calculations were made that support the conclusion - that while the red states complain about the federal pigpen, they live high on the hog, are better beneficiaries than the high tax blue states.
And stop the war-mongering. Why are we still in Afghanistan? Why are we in Africa? Why aren't migrants sent back to their countries where it's safe to do so? Why aren't we protecting our own borders? Why don't we get out of Assad's country? Why is Ryan Speaker of the House?
I'm disgusted that GOP swampthings seem to be gleefully bringing the nation to total ruin as they line their pockets.
“Skypilot, I am an Illinois resident.
Don’t give me cr@p about your state. My state is worse.”
I am also an “inmate” of illannoy. Nothing I’ve heard about the so called “tax reform” proposals will do shit for me. In fact, they will hurt.
Seems the entire discussion is how to keep average Americans from protecting their income from the government, not how to provide tax relief.
I don’t care how much it screws over residents of particular states.
I care that I have to pay taxes on my taxes. Seriously?
Seems to me the entire discussion is how to fool average Americans into thinking more of their income is being protected from the government, not how to provide tax relief.
Why are we still in Germany, Italy and Japan? Those German, Italian and Japanese soldiers are at least 90 years old now.
Rep. Dan Donova (R-NY), has stated it best:
Since the federal income tax was created in 1913, Washington has never violated the conservative principle that people shouldn’t pay federal taxes on the taxes they already pay to their state and local governments because to do so would be a double tax and would interfere with a state’s ability to raise and spend as it chooses. Former President Ronald Reagan didn’t change it when he had the chance in 1986, and we shouldn’t change it now.
We have an opportunity for transformative action to reform the bloated, complex and job-killing tax code for the first time in 30 years. I want nothing more than to vote for a plan that unleashes our country’s full economic potential. The tax proposal released last week has great policies that will make our country’s businesses more competitive, a top priority for President Trump and House Republicans.
Unfortunately, the plan would also repeal the state and local tax (SALT) deduction, sending the bill for tax cuts elsewhere in the country straight to middle class New Yorkers. Adding insult to injury, this bill would cap the mortgage interest deduction at a value that’s below the average home price in my Congressional district. We might as well preface every mention of this bill with “generously subsidized by the people of New York.”
Deference to states has been a bedrock conservative principle for more than 100 years. Arguments in favor of eliminating the SALT deduction presume the federal government should tax however it wants, and if folks are upset about their bill, then they should take it up with their state and city.
But we as a party are contradicting ourselves. On the one hand, we advocate for states to have more control over their health-care and insurance marketplaces, and on the other we argue that states need to adapt to federal tax priorities. Well, which is it: states’ rights or federal primacy?
Making matters worse, the new tax plan would slash in half the loan amounts for which homeowners can deduct their mortgage interest. A $500,000 house might be a mansion in Alabama, but in my district it’s barely enough for a starter home. If this provision remains, young adults living at home to save up for a house are going to be waiting a lot longer. A better proposal would be to index the cap to regional incomes and home prices.
Let’s stop pretending this tax proposal is good for everybody: the middle income people of New York, California, Illinois and New Jersey are footing the bill for a tax break for people elsewhere.
According to the Partnership for New York City, a single filer here making $100,000 per year would see a $1,690 tax hike. A six-year veteran of the FDNY brings in about $110,000 in total compensation, and the NYPD isn’t far behind.
Taxes may increase for 760,000 New Yorkers under GOP plan
New Yorkers already pay more than their fair share. For every dollar we send to Washington, we get about 80 cents back. We’re already subsidizing the rest of the country.
Reps. Peter King, Lee Zeldin and I proposed a compromise to Congressional leadership that would keep the state and local tax deduction in full for four years, and then phase it out for truly high-income earners.
If we’re serious about delivering tax relief for every part of our country, then proposals like ours should be welcomed with open arms.
New York has nine members of the Republican Congressional majority. California has 16. Illinois has seven. New Jersey has five. All will get hammered by the revocation of the SALT deduction.
We can help enact powerful change by doing right by our constituents, but it’s bad policy and bad politics to deliver a bill that harms the middle-income people of these states districts. They, too, played a major role in voting for a Republican majority to deliver tax relief — and we owe it to them to get it right.
One reason I say that is, at least in my meck of the woods, when one level og government provides a trickle of tax relief, the others raise their taxes. I can’t recall ever seeing relief that was across the board.
“But Californians LOVE taxes”
And it is damned time they stat paying them, instead of the rest of us subsidizing the high tax Democrat states.
Using a formerly racist concept known as “math” we find that this will have little or no effect on the poor and middle class, but will cost high income and wealthy Democrat donors... err... I mean, voters, more.
Catch the ties. So purple is the new red, white and blue.
Raise my taxes and call it tax reform?
Please.
Dont piss on me and tell me its raining.
Pretty much.
Paul Ryan and Kevin Brady are telling you that isn't pi$$. It's just a warm mineral bath.
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