Federal Income Tax Reform Proposal - Effect on Californians (health insurance, schools)

[Independentthinking]

Originally Posted by jbgusa

Let's see what the IRS position on that dodge is.

The IRS antenna will be up for any of this nonsense being spewed by the media and politicians. Regardless of what delusional people here think is possible, for those living in reality, we realize that the Middle Class in the high COL metropolitan cities in CA have just been given a lump of coal (one of the many they've received over the last few years by both parties). If you're in the Middle Class and itemize, you're basically screwed. It's a Merry Christmas for the "subsidized" ones and a Bah Humbug for everyone else. Soon there will be no Middle Class.

But do have a great holiday Californians!

[jbgusa]

Originally Posted by Independentthinking

The IRS antenna will be up for any of this nonsense being spewed by the media and politicians. Regardless of what delusional people here think is possible, for those living in reality, we realize that the Middle Class in the high COL metropolitan cities in CA have just been given a lump of coal (one of the many they've received over the last few years by both parties). If you're in the Middle Class and itemize, you're basically screwed. It's a Merry Christmas for the "subsidized" ones and a Bah Humbug for everyone else. Soon there will be no Middle Class.

But do have a great holiday Californians!

The bulk of the tax revenues always come from the upper-middle class and the lower end of the upper class. There aren't enough truly wealthy people to soak and they can always scheme to evade. The lower and lower-middle class don't have much to tax. The only halfway thorough effort to root this out, the Tax Reform Act of 1986, was quickly revised at the behest of the super-rich.

[Independentthinking]

Originally Posted by jbgusa

The bulk of the tax revenues always come from the upper-middle class and the lower end of the upper class. There aren't enough truly wealthy people to soak and they can always scheme to evade. The lower and lower-middle class don't have much to tax. The only halfway thorough effort to root this out, the Tax Reform Act of 1986, was quickly revised at the behest of the super-rich.

Unfortunately, there isn't an adjustment based on COL. If that was done, things like this would be more equitable instead of the ongoing attack on people in high COL areas. I truly wonder how that family bringing in $50k-$75k around many of the areas in the country would feel if they had a significant tax penalty.

[Ultrarunner]

Originally Posted by 2sleepy

There are strategies that blue states might be able to use to mitigate the damage caused by the new tax law, and if they are successful this scam of a tax plan will fail and republicans may well find themselves at that table negotiating changes to their bill

Charitable gifts One tactic: Allow residents to make charitable gifts to the state instead of paying income tax. That would involve legislators encouraging residents to donate to, say, New Jersey (insert quip here), instead of paying income taxes. The self-interested philanthropists who took up the state on the offer would receive a state income-tax credit for the full amount of their gift, which would qualify for a federal deduction.

Channeling collections into payroll taxes would also allow both itemizers and non-itemizers to benefit, and states would keep more money within their borders. States with progressive income-tax rates would need to devise a system of tax credits to make payroll taxes hit the right rates.

https://www.bloomberg.com/news/artic...salt-deduction

And this might be the push California voters to change prop 13 to exclude commercial property, or at least tax it at a higher rate. If that was done property tax on residential property could probably be reduced.

Every taxable property in California comes under Prop 13...

Keep hearing about low California Property Tax but my tax rate is pushing 1.7% here in Oakland CA and paying close to 11k in property tax on a 1725 square foot home circa 1957 isn't what I would call low property tax...

Also... what is commercial property???... are you commercial of you rent out a room or live above the family shop... are you commercial if your vacant lot is zoned for a duplex or you run an online business from your home?

The beauties of Prop 13 are simplicity and predictability... volumes of tax code reduced to a few simple paragraphs and the need for voter approval for new assessments plus the peace of mind gained from tax predictability...

[Independentthinking]

Originally Posted by Ultrarunner

The beauties of Prop 13 are it is simple... volumes of tax code reduced to a few simple paragraphs and the need for voter approval for new assessments plus the peace of mind gained from tax predictability...

Yep Prop 13 ain't going anywhere. Despite those that continuously whine about it. It's one of the few equitable things left in CA.

[Ultrarunner]

Originally Posted by Independentthinking

Yep Prop 13 ain't going anywhere. Despite those that continuously whine about it. It's one of the few equitable things left in CA.

I was not old enough to have voted when it became law but am most grateful to those that were...

[Independentthinking]

Originally Posted by Ultrarunner

I was not old enough to have voted when it became law but am most grateful to those that were...

I am eternally grateful for it Ultra. Myself and many of my friends would have been run out of town to the top !% in this country had it not been for those that voted to put an end to the crazy volatility of property taxes.

Thank you for constantly bringing your knowledge to this argument as you typically eviscerate the naysayers and their faulty logic. It still amazes me that the uber rich have so many cheerleaders.


Merry Christmas to you my friend.

[Independentthinking]

Rather than listen to a clueless politician or a silly rag like the NY Times trying to circumvent tax law, here's some practical advice from an accountant friend of mine that won't set you up to be audited....

Because of the new tax law, consider the following

1) Since the state and local tax deductions are capped at $ 10,000 beginning in 2018, consider paying such in December 2017 if you can so that you may still receive some benefit for them in 2017.

2) Since the standard deduction is nearly doubling going forward, more people will NOT be itemizing in 2018. Consider making charitable contributions in 2017 instead of 2018. If you have clothing and / or furniture you can donate, do such in 2017 (and make a list for documentation)

3) In connection with number two, more people should consider bunching their deductions. For example, make charitable contributions every other year. Donate in 2017 and 2019 and 2021, but not in 2018 or 2020. This will help people exceed the standard deduction in odd years. You can also make sure your January 2018 mortgage payments posts in December 2017 and then your January 2019 payment posts in 2019 and your January 2020 payment posts in 2019. This strategy is less important if you can still itemize every year.

Merry Christmas!

[expatCA]

Originally Posted by Independentthinking

Unfortunately, there isn't an adjustment based on COL. If that was done, things like this would be more equitable instead of the ongoing attack on people in high COL areas. I truly wonder how that family bringing in $50k-$75k around many of the areas in the country would feel if they had a significant tax penalty.

No basis for giving a better break for those in a high COL are. They live there by choice.

The claimed idea is to tax the rich. It is just that to politicians; the rich starts at about $100,000.00. The truly rich want them held back so they have no competition when it comes to buying politicians. Make more, pay more.

[Independentthinking]

Originally Posted by expatCA

No basis for giving a better break for those in a high COL are. They live there by choice.

The claimed idea is to tax the rich. It is just that to politicians; the rich starts at about $100,000.00. The truly rich want them held back so they have no competition when it comes to buying politicians. Make more, pay more.

I call BS on the premise of your post that is bolded (and have said as much in previous posts to you). The notion that someone that grew up in an area, and has all their friends and family in that area, and then basically be forced out by those that think they should be taxed beyond belief (i.e. Prop 13, current tax law) is nonsense. No one is going after families that earn $50k-$75k in other areas. Why treat them any differently when they are essentially living the same lifestyle? COL adjustments are made for multiple things across state lines. The Feds could easily make an adjustment for that. And it would be equitable.

I like Jon Lovitz's rant on it...

"“First they tell you–you’re dead broke–This is the United States of America, you can do anything you want, go for it. So then you go for it, and then you make it, and everyone’s like, F you.”