Audit: More than 10 million Americans feeling SALT cap pain

newsday ^ | February 26, 2019 | Robert Brodsky

[GuavaCheesePuff]

Nearly 11 million Americans nationwide would have been capped from deducting more than $323 billion in state and local taxes in 2017 because of changes enacted in the GOP's tax reform legislation, according to an audit released Tuesday by the Treasury Inspector General for Tax Administration — and expect similar results for the 2018 tax year.

The 28-page report offers a new window into the full scope of the $10,000 cap on SALT deductions, which is supported by the White House and top congressional Republicans but has been heavily criticized by the leaders of many high-tax Democratic states, including New York, and by elected officials on Long Island. The cap went into effect in the 2018 tax year.

The audit, which relies on federal tax returns, estimates that if the SALT limits had been in place in 2017, 10.8 million tax filers would have lost a combined $323 billion in deductions. Auditors estimate similar results in tax year 2018, where more than 10 million taxpayers will be unable to fully deduct their state and local taxes, the report said.

[LongWayHome]

I don’t see real estate booming in the rust belt for a variety of reasons, and once a housing slowdown grips the coasts it will seep into every corner of the economy.

I’m not against SALT, in theory, hence why I would have liked to see it indexed to inflation to cut down on any economic disruption.

[Jeff Chandler]

I don’t see real estate booming in the rust belt for a variety of reasons.

The Rust Belt isn't the only region in the country.

once a housing slowdown grips the coasts it will seep into every corner of the economy

What if the deductability of real estate taxes had actually created a distortion in the market, and people who earlier might have moved away but stayed because the government was subsidizing their real estate investments decide to grab their 300 thousand dollar profit (down from 500 thousand because of SALT) and move to another state, plopping their wad of cash down on a new home, thereby boosting the demand for housing material?

Not to mention easing the California housing shortage AND enabling people who previously could not afford a nice home to buy one at a reduced price?

[CurlyDave]

...I think everyone should have to write a check for all the taxes they’re paying each year, so they can WATCH the money being taken away...

I have felt the same way for over 30 years.

The only improvement I can offer is to move tax day to one week before election day.

[GaryCrow]

Good!

I’m tired of subsidizing millionaires in New York and California.

[LongWayHome]

You want this blue state swine everywhere:) Seriously, we don’t know how populations would behave on such a macro level if your theory played out.

Some real estate is so prime that not much moves it. SALT should be adjusted, not removed IMO. Blue states need to get their budgets under control. I understand why this was passed....just wish it was applied in a more judicious manner.

[nutmeg]

.

[aquila48]

That’s right. Interest is still deductible on loans up to 750K (if you itemize).

[Jeff Chandler]

just wish it was applied in a more judicious manner.

As opposed to ripping the bandage off?

[Vendome]

[Vendome]

Trying to have feelings.

Just like the feelings I had when I was told by my givernment to purchase insurance I didn’t want, that covered Jack Shiite, and had a $5,000 deductible, making it useless.

In fact, I spent a few thousand on medical care, on top of my “catastrophic insurance “ which I shouldn’t have had to pay for lest I be fined....

Eff em...

[Tolerance Sucks Rocks]

PING.

[Vendome]

To put it more accurately, I spent $3,600 in one year for insurance that I could not use.

I do not feel sorry for the jackasses that voted for Obama one effing bit.

It feels like just Rewards for dessert

[LongWayHome]

Yup....selfish reasons....want Trump reelected with no recession in 2020.

[monkeyshine]

“people living in high-tax states start paying their fair share”

That’s the ticket. We have to throw that shibboleth right back into their faces. They wanted to tax the rich, they got it.

[norton]

Haven’t heard Much from Freepers affected by this. Would like to hear more from them.

...Retired, laughable pension, modest portfolio, California: Screwed.

[joma89]

All those ‘poor’ rich people who vote democrat and demand to be taxed more just got taxed more.

JoMa

[Woodman]

My situation is very similar. I lost about 10k in deductions which left me with more taxable income than 17. I need to compair to 17 rates but I think I’m out around 2k. I is worth it to hear the Libs cry.

[StAnDeliver]

"many high-tax Democratic states, including New York, and by elected officials on Long Island"

Awww, nanny nanny boo boo.

[djpg]

They are now complaining that we are no longer paying their portion of their taxes. They want to fund their own government services and transfer the tax payments on to the rest of the country.

[SkyPilot]

It iss about damned time people living in high-tax statesstartbpaying thier fair share of the costs of Liberaism, instead of those of us in the low tax/ sanity states subsidizing it.

So paying taxes upon taxes you already paid is now a Conservative position? Since when?

The tax bill changed a position that had been part of the tax code since 1862.

It’s worth pausing to consider the origins of the SALT deduction. The provision has been a feature of federal income taxation since 1862, but its roots run even deeper in U.S. history. Since the early years of American nationhood, political leaders have been arguing about the need to protect state revenue sources from federal encroachment — as well as the dangers of double taxation to individual taxpayers. Initially, at least, champions of a strong federal power to tax were able to deflect both arguments. In a 1986 article for Publius, Sarah Liebschutz and Irene Lurie noted the importance of state taxation in arguments over ratifying the Constitution. In particular, supporters of a broad federal taxing power “argued at length against those who feared that ‘all the resources of taxation might by degrees become the subjects of federal monopoly, to the entire exclusion and destruction of the State governments.’”

When the Corporate rate was slashed from 35% to 21%, guess what the Goldman Sachs boy Steven Mnuchin, Goldman Sachs boy Gary Cohen, two-faced Paul Ryan, and House Ways and Mean Chairmen Kevin Brady did?

They went searching through the cushions of the Federal tax code looking for spare change to make up for the $4 Trillion dollar shortfall caused by giving the Corporations such a massive tax cut.

Personal Exemption? Now illegal. SALT deductions (again, been in there since 1982 and predicated on the Federalist Papers) - now illegal. RV deduction for Mr. and Mrs. Average so they can dare to have a meager family vacation? Now illegal. And on and on.

The "middle class tax cut" transferred the Corporate tax cut bill to individuals and families.

Not exactly fulfilling the campaign promise, is it?

Most Corporations spent their windfall through massive stock buybacks. This benefitted them greatly (super), but that injection to the markets is now over.

Millions of middle class and upper middle class taxpayers who were screwed by the tax bill will live with the consequences for years.

"We're doing this for middle-income people, where it belongs."

We lost many House seats directly because of the tax bill? Don't believe me? Fine. I, and others, predicted in Dec 2017 that if this bill passed, we would lose the House.

And it will continue to be an albatross around the neck of the GOP in 2020.