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”.
Appalling ignorance. Even when presented with contrary information up thread you still prefer to look ignorant in public.
“at the expense of smaller states which were keeping their financial houses in order”
These big blue states support your red state.
You are a dependent, not a net donor.
There was one poster that said he would pay $4000 more because he couldn’t deduct his property taxes. In knowing nothing about him other than that, I made some assumptions and did some quick calculations based on the house bill. With the standard deduction increased and the tax brackets expanded, I figured if he was still going to be paying $4000 more On top of those tax cuts and assuming he is probably paying 25-35% top income bracket, His property taxes must be upwards of $35,000 a year. It would be much higher than that if he was in a lower tax bracket. With
California’s property taxes are capped at 1% (proposition eight), Adding in some bond measures idiots in CA always seem to vote for, his property taxes might be about 2%. So he has a house worth several million dollars. Probably much more if he has any other deductions, like children, business deductions, rentals, etc. He said if he moved out of California, he would have to pay huge capital gain.
That means his house appreciated over the years, he didn’t originally pay its current market value for it. So he made millions of dollars just living in that house. And I’m supposed to feel sorry for him? If you want to live in a blue state that is just fine. But don’t complain about the consequences of your choice.
Of course corporations get to continue those deductions. Anyone owning a rental also does. It’s a cost of doing business. It’s on a different form, and isn’t related to schedule A.
Before you complain so much, you should really learn something about taxes. I find most people don’t even do their own.
“At best they save 35% of the state taxes paid.”
????
You are contradicting yourself. You are complaining because now people Won’t be able to deduct the state taxes paid. And at worst they only pay 35% on those taxes.
But now you consider them getting to deduct them no big deal? You can’t have it both ways. Same goes for the property tax deduction. Can you keep forgetting that the standard deduction and text brackets have been expanded.
The property tax and state income tax deduction has allowed for some states to irresponsibly overtax their population. The mortgage interest deduction has allowed for some areas to increase the market value of their homes. These deductions have had consequences, which will likely be reversed overtime if the deductions disappear or are lowered.
Obviously lostpassword has won this debate. All mariner can come up with are petty insults. Much like liberals do when they have run out of intelligent things to say.
LostPassword And many others here have a great point that the complainers refuse to even acknowledge. You love your blue state and can see no wrong in how it is run.
The cap on state taxes could have a serious effect on the price of real estate here in NH. This is because NH does not have a income OR sales tax. Instead we have very high property taxes. For example, the local property taxes on my single family residence is $8K. This is for a house that is currently worth about $340K. I know many upper middle class people whose property taxes are in excess of $10K here in NH. However, NH continues to be one of the lowest overall tax burden states in the country.
Hey, if you want to join the bandwagon of ignorance nobody can stop you.
The taxpayers in CA pay more in Federal taxes than they receive in Federal expenditures. The same is true for NY, NJ and IL.
How about your state? Name your state and I will show you the net tax paid vs the net federal benefit received.
Who is subsidizing whom in the Federal arena?
To suggest or claim that these states are a burden on Federal Taxpayers in other states is sheer ignorance.
Come now CottonBall. Please.
Homeowners, families trying to put their children through college and pay for weddings, people attempting saving for retirement, and all the rest deserves the same deductions. It's the cost of "living and surviving."
What IRS form it goes onto is not germaine to the situation.
Agreed.
But this isn't 1986, and this isn't the Reagan tax cut. The two situations are different now. The GOP leadership is saying that once corporations get more money back, they will pass that on in higher wages and benefits for workers. I have my doubts.
There was a Freeper here who had vast experience with mergers, taxation, and businesses. He stated that what he saw was once corporations started to see more profit growth, they hired "consultants" that informed them they could fire xx workers, and cut xx benefits, and make even more profit.
If the GOP is counting on "growth", then screwing over states that are carry the largest share of economic activity and Federal revenue (NY, CA, NJ, IL, TX, etc) is not a good strategy. You say people will move out. True, and they have. But that won't immediately translate to growth in other states, nor in the Federal coffers.
Yup, well, they assume we are their debt slaves, and they treat us accordingly.
They do, via the US Constitution.
“All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.”
— Article I, Section 7, Clause 1
But they are ignoring the Constitution using arcane rules of Congress. They are using "reconciliation" and other tricks that will allow the Senate bill to prevail. Even Chuck Schumer agrees.
Are you joking? Tax the the hell out of already high tax states, via a GOP screw job, and the states will turn GOP in the next Presidential and off year elections?
I think you have it completely backwards.
I wish you were right, however, they are not serving the voters. They are serving their donors. They don't care about us - only themselves and their pocket books. And if they are voted out, they will be rewarded with fat lobbying or other jobs. Trust me.
http://dailycaller.com/2017/11/09/graham-says-gop-donors-will-jump-ship-if-tax-reform-fails/
Two filers with almost identical circumstances get treated differently by the current tax code. Filer ‘A’ comes up just short of having enough deductions to itemize while Filer ‘B’ is a bit over.
The activities of filer ‘B’ that bumped him up are obviously more virtuous to some here and are thus worthy of forcing Filer ‘A’ to subsidize.
I never noticed those in high state tax areas clamoring for fairness for those in states that collect their revenue more through sales and use taxes.
Policy decisions that lead to higher state taxes - zoning restrictions that raise housing costs, union labor used in home construction, high pensions for state employees cannot be fixed by the federal gubermint.
Say that the standard deduction was $1000 and SALT deductions totaled $1000.
Making the standard deduction $2000 while ending SALT deductions would then result in no net tax increase.
Very interesting thread. Thanks to all posters.
We're paying about $9K here in the People's Republic on a house that's maybe worth $400K (Zillow says $500K. They gotta be kiddin'!) My late FIL's place -- 10 x the size and closer to the water -- had a $40K tax bill and that was 10 years ago. The problem here in the People's Republic is that everything else - income, sales, inheritance, business -- is taxed to the max, too.
My thought is that I doubt that NH real estate would be hurt too much. In Massachusetts -- one of the Seven Deadly (tax) States, it would. It's the overall tax burden, not any one single tax source.
The high tax states are in trouble. Mostly what the tax bill would do is make them advertise that fact. But I don't think it's going to happen.
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