Federal Income Tax Reform Proposal - Effect on Californians (low income, how much)

[pacific2]

I haven't read through all of the posts, so maybe someone has already mentioned this one. It's not specific to Californians, but still noteworthy for those who attend graduate school. It also sounds like maybe even fewer Americans will be able to attend these programs. So, perhaps universities will increase their foreign student recruitment efforts.

I wonder if faculty housing assistance programs are also on the cutting board?

House G.O.P. Tax Writers Take Aim at College Tuition Benefits
https://www.nytimes.com/2017/11/15/u...=top-news&_r=0

In addition to campus employees, many doctoral students would see huge tax increases, since the tuition that universities waive for them in exchange for working on campus as researchers and teaching assistants would be deemed taxable income. At expensive research universities like Stanford and Harvard, the new tax bills could swamp graduate-student stipends.

And if students take out more loans to pay their new taxes, they would face another surprise: Under the House bill, interest paid on student loans — a deduction that more than 12 million people used in 2015 — would no longer be tax deductible...

...According to the education council, more than 60 percent of the students who would be affected are in science, technology, engineering or mathematics — research fields that have drawn the praise of Republicans, including President Trump, in recent months.

The Association of American Universities, which represents 60 research universities, including Carnegie Mellon, said the tax plan threatened the viability of their doctoral programs. The universities award nearly one-half of all American doctoral degrees and 55 percent of those in the sciences and engineering.

[pacific2]

Here is something else to consider for the future, but again, it will strike all states, not just California:

https://www.wsj.com/livecoverage/tax...ard/1510696375
Nov 14, 2017 at 4:52 pm ET
GOP Tax Bill Would Prompt Automatic Spending Cuts

The Republican tax bill would force $25 billion in immediate cuts to Medicare, according to the Congressional Budget Office, a move that could be stopped only with a bipartisan vote.

[pacific2]

Surprise, surprise!

The House just passed its big tax bill. Here's what is in it and what deductions vanish.
The House just passed its big tax bill. Here's what is in it and what deductions vanish. - Chicago Tribune

Donald Trump would probably benefit a lot. As The Washington Post explains, many parts of the bill help Trump. One of the interesting ones is that the lower 25 percent pass-through rate would apply to all income for passive real estate investors like Trump, a much better deal than most active pass-through business owners get.

[CaliRestoration]

Originally Posted by pacific2

[/i]And if students take out more loans to pay their new taxes, they would face another surprise: Under the House bill, interest paid on student loans — a deduction that more than 12 million people used in 2015 — would no longer be tax deductible...

This is great news.

Seeing as how 16% of these loans get defaulted on anyway (2016) and are eaten entirely by taxpayers, and the number of defaulted federal student loans hit a new high of about 8 million borrowers with more than $137 billion in education debts, maybe this will help stop the avalanche of people taking out dumb loans to fund worthless paper degrees with no employment prospects.

Good moves, really impressed actually.

[CA4Now]

"...the GOP tax bill may be enacted without anyone who votes for it having any understanding of the damage it could do to the economy."

GOP Tax Bill Is The End Of All Economic Sanity In Washington:
https://www.forbes.com/sites/stancol.../#1e90dc9b77ef

[SportyandMisty]

Originally Posted by pacific2

In addition to campus employees, many doctoral students would see huge tax increases, since the tuition that universities waive for them in exchange for working on campus as researchers and teaching assistants would be deemed taxable income. At expensive research universities like Stanford and Harvard, the new tax bills could swamp graduate-student stipends.

Clearly, waiving tuition in return for a grad student being a teaching assistant or research assistant is a form of barter and is a tax loophole that should be closed. Along with other tax loopholes, it results in a distortion in the efficient allocation of resources in the economy. Also just as clear, the entire model of pricing higher education is a sham where institutions set fake retail prices they can then reduce or waive is silly.

Stanford or Harvard can just pay the grad students the fair market wage for their labor rather than a tax-loopholed tuition waiver. And yes, just like everyone else who earns wages, grad students should pay their fair share.

[CA4Now]

"Several days ago our Congress brought forth on this country a new tax plan, conceived in partisanship, and dedicated to the proposition that all states aren't created equal. We are now engaged in a great con job, testing whether that tax plan, or any tax plan so conceived, and so dedicated, can long endure.

We are met here in the great state of California. We are asked to dedicate a large portion of our tax deductions to their final resting place that that tax plan might live..."

The party of Lincoln, updated for the 2017 GOP tax plan - LA Times

[CA4Now]

"Betty Yee, California’s state controller, has said keeping only a limited property tax deduction was throwing Californians “a bone,” but was not enough."

Republicans likely to keep some property tax break. It's still not good for many Californians - LA Times

[expatCA]

Originally Posted by adneganeddih

CA is currently subsidizing the poor red states with it's Federal Tax payments. CA after all pay the most federal taxes than any other state.

And currently it subsidizes no one as it gets back 99% of what is paid.

How do you think the Poor and Backward Red States can charge little to zero State Income Taxes on it's citizen, yet have revenue to pay for everything?

They are run better.
[/quote]

[2sleepy]

Originally Posted by majoun

This is not good for California but excellent for the rest of the US - and face it, Trump has nothing to lose by soaking California via ending the deductions for state taxes and for mortgage interest. He'd never win the state anyways.

The only silver lining here is that it might put a brake on property values' appreciation and might lead to a much needed decline in property values easing the state's affordability crisis somewhat.

It might be wise for Republicans when they vote for this piece of dog poop that there are currently 13 Republican house members in California and I don't think this will leave very many California voters in the mood to re-elect them.