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Old Yesterday, 11:42 AM
 
Location: Coastal Connecticut
15,025 posts, read 18,491,555 times
Reputation: 3481

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Quote:
Originally Posted by davwve View Post
You also have to remember that the small pocket of areas with high property valuations, high taxes (income & property), and arguably high wages may not necessarily reflect large swaths across this country. There are many that tag "us" as wealthy simply because we (are able) pay X amount in property taxes or Y amount in State income tax. In their respective lower cost of living areas paying X or Y is probably reserved for only the wealthy while many in the HCOL areas are smack in the middle class or just getting by.
I disagree in this case (the $10k). Only 7 states don't have income tax. It is really not that difficult to exceed $10k in most states, even ones that are considered more tax friendly.

In either case, we're still not talking about "wealthy". Upper middle class, at most.
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Old Yesterday, 01:15 PM
 
278 posts, read 284,681 times
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Quote:
Originally Posted by Stylo View Post
I disagree in this case (the $10k). Only 7 states don't have income tax. It is really not that difficult to exceed $10k in most states, even ones that are considered more tax friendly.

In either case, we're still not talking about "wealthy". Upper middle class, at most.
Based on 2015 data the 30% of filers who itemized their returns averaged SALT deductions of $12.4k. You can use the interactive map to see the averages for each State. The majority do not itemize and for those that do, a lot do not exceed $10k in SALT.


I exceeded the SALT cap but not complaining as my effective tax rate was lower due to the overall tax law changes.


https://www.pewtrusts.org/en/researc...utm_source=Pew
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Old Yesterday, 01:20 PM
 
12,600 posts, read 6,570,120 times
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Quote:
Originally Posted by Stylo View Post
In either case, we're still not talking about "wealthy". Upper middle class, at most.

Right, and why is it good public policy to subsidize housing costs for upper middle class people? In my opinion, mortgage interest and local property tax itemized deductions should apply to starter homes to encourage home ownership, not a tax shelter vehicle for affluent people. If it's only state income taxes, you're making very big money by the time you hit the $12K/single, $24K/married standard deduction. $12K in Connecticut state income taxes is $200K+ in AGI. Why should the Federal government subsidize that? The Federal income tax brackets in 2018/2019 are really low. With a maxed 401(k) and the standard deduction & filing single, the 24% bracket extends up to a gross income of almost $200K. Married, it's up over $350K gross income with dual income.


Back in 1982, my first full year in the workforce, my entry level engineering job put me in the 35% bracket and a 23% to 25% effective tax rate. If you adjust that for inflation, that's ~$95K. Today, that's more like a 10% effective tax rate. Single and a 5%er, you're still only a ~20% effective tax rate. Cry me a freakin' river.
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Old Yesterday, 01:29 PM
 
Location: Connecticut
25,327 posts, read 41,101,082 times
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Quote:
Originally Posted by GeoffD View Post
Right, and why is it good public policy to subsidize housing costs for upper middle class people? In my opinion, mortgage interest and local property tax itemized deductions should apply to starter homes to encourage home ownership, not a tax shelter vehicle for affluent people. If it's only state income taxes, you're making very big money by the time you hit the $12K/single, $24K/married standard deduction. $12K in Connecticut state income taxes is $200K+ in AGI. Why should the Federal government subsidize that? The Federal income tax brackets in 2018/2019 are really low. With a maxed 401(k) and the standard deduction & filing single, the 24% bracket extends up to a gross income of almost $200K. Married, it's up over $350K gross income with dual income.


Back in 1982, my first full year in the workforce, my entry level engineering job put me in the 35% bracket and a 23% to 25% effective tax rate. If you adjust that for inflation, that's ~$95K. Today, that's more like a 10% effective tax rate. Single and a 5%er, you're still only a ~20% effective tax rate. Cry me a freakin' river.
People seem to forget or not realize the reason that mortgage interest and property taxes were made deductions in the first place. It was to encourage home ownership which has been shown to be a great asset to society as a whole. A renter has little to no ties to a community but a homeowner has a vested interest in their community and keeping it safe and maintained. Kind of logical.

The limits placed on SALT deductions will discourage home ownership and have an impact on communities well into the future. Jay
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Old Yesterday, 01:58 PM
 
Location: On the Stones of Years
332 posts, read 93,896 times
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Quote:
Originally Posted by JayCT View Post
People seem to forget or not realize the reason that mortgage interest and property taxes were made deductions in the first place. It was to encourage home ownership which has been shown to be a great asset to society as a whole. A renter has little to no ties to a community but a homeowner has a vested interest in their community and keeping it safe and maintained. Kind of logical.

The limits placed on SALT deductions will discourage home ownership and have an impact on communities well into the future. Jay
That's a bit harsh regarding renters. They aren't responsible for the upkeep and maintenance of the places that they live. That is the responsibility of the landlord. " little or no ties to the community " . How can you make such a statement ? Have you interviewed all of them?

Almost 34% of CT residents rent instead of own. They have seen their costs go up over the past several years, compared with the cost of home ownership actually decreasing . The Tax Change gives renters some breathing room .

Have you ventured out of some of the high cost for housing communities in CT, to those areas with lower housing cost ? Have you seen houses owned by people that have not had steady wage increases ? That have had more taxes placed on them as a burden ? Have you seen many of them that need repair, a roof, poor landscaping? There are plenty of them out there. A sign of the last 8 years and more of high taxation and the policies by Democrats.

The limits on SALT deductions actually only affect a small percentage of taxpayers.
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Old Yesterday, 04:40 PM
 
450 posts, read 318,478 times
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It is a bit insulting to claim that renters have little to no ties to a community. What about teachers, police or firefighters living in high cost communities where they have to rent because they cannot afford to purchase a home? Are their jobs not an asset to the community? Are they not tied to the community through their work? What if they volunteer for youth sports, etc? Do those ties not count because they don't have a mortgage? What about a single mom who has to work two or three jobs to rent in a community with a good school for her kids? Renters can have just as much tie to a community as home owners. Ties don't have to be financial.



Quote:
Originally Posted by JayCT View Post
People seem to forget or not realize the reason that mortgage interest and property taxes were made deductions in the first place. It was to encourage home ownership which has been shown to be a great asset to society as a whole. A renter has little to no ties to a community but a homeowner has a vested interest in their community and keeping it safe and maintained. Kind of logical.

The limits placed on SALT deductions will discourage home ownership and have an impact on communities well into the future. Jay

Last edited by JGBigGreen; Yesterday at 05:11 PM..
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Old Yesterday, 11:02 PM
 
341 posts, read 113,702 times
Reputation: 311
The SALT cap simply made taxation fairer for everyone nationally. Did it hurt Ct? Yes. Just another reminder not to run an open bar if you don't want a big bill.
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Old Today, 10:01 AM
 
Location: Connecticut
25,327 posts, read 41,101,082 times
Reputation: 7381
Quote:
Originally Posted by JGBigGreen View Post
It is a bit insulting to claim that renters have little to no ties to a community. What about teachers, police or firefighters living in high cost communities where they have to rent because they cannot afford to purchase a home? Are their jobs not an asset to the community? Are they not tied to the community through their work? What if they volunteer for youth sports, etc? Do those ties not count because they don't have a mortgage? What about a single mom who has to work two or three jobs to rent in a community with a good school for her kids? Renters can have just as much tie to a community as home owners. Ties don't have to be financial.
I did not mean to insult anyone, particularly teachers, police or firefighters, but studies show that home ownership increases the amount of community involvement and commitment plus improves things like education attainment, crime, community pride and appearance and civic engagement. That is not to say that some renters don't achieve the same but it is just not the same rate. Jay

https://www.forbes.com/sites/lawrenc.../#4a20b235480f
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Old Today, 10:24 AM
 
Location: Coastal Northeast
16,117 posts, read 22,507,039 times
Reputation: 5481
Quote:
Originally Posted by JayCT View Post
I did not mean to insult anyone, particularly teachers, police or firefighters, but studies show that home ownership increases the amount of community involvement and commitment plus improves things like education attainment, crime, community pride and appearance and civic engagement. That is not to say that some renters don't achieve the same but it is just not the same rate. Jay

https://www.forbes.com/sites/lawrenc.../#4a20b235480f
I agree with this, but it largely depends IMO on the area. When I first left CT, I rented in an area for a few months that I had no desire to live in. I didn’t care to explore the community, or get involved in local politics, or get out and meet people, because I knew I wasn’t going to stay. It was a very transient large community next to a major city and it didn’t have the homey feel. Fast forward to finding the community we wanted to live in - we rented for a few months there and became very involved, but ultimately purchased a house there.

The reason renters don’t become fully involved in their community is because, simply put, they likely don’t plan to stay. You can’t really blame them, either.
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