Federal Income Tax Reform Proposal - Effect on Californians (Brea: lawyers, home)

[shooting4life]

Originally Posted by payutenyodagimas

since not every place have the same cost of living, this should be taken into consideration. CA I think is worth $0.80 for every dollar and some states are like $1.20 for each dollar they earn.


so if we owe the IRS $1.00, we should be paying only $0.80 coz that's the value of the dollar in CA. and if you happen to live in states that have more bang for the dollar, they you should pay more like $1.20 if you owe the IRS $1.00


if we have a system like than, they could eliminate all those state/local tax deductions.

I bet your for a minimum wage that is linked to cost of living as well? Do you want many people in the state working jobs that pay 5-6 dollars an hour because cost of living is low in the Central Valley or northern s parts of the state?


All the sudden everyone is worried the "rich" have to pay more taxes around here.

[tikkasf]

I am withholding judgement at this time of the tax plan. Besides, once the lobbyist get involved, no telling what the actually details of the plan will be. One concern I have though that I will state now, is the numbers not adding up and
the end result could be piling on more debt. I think the pitch will be in regard to my concern, that the tax reform tax plan will cause economic growth and hence enough increase in tax revenues.

Trump

[payutenyodagimas]

Originally Posted by shooting4life

I bet your for a minimum wage that is linked to cost of living as well? Do you want many people in the state working jobs that pay 5-6 dollars an hour because cost of living is low in the Central Valley or northern s parts of the state?


All the sudden everyone is worried the "rich" have to pay more taxes around here.

there are reasons why some places have different cost of living. if you are a server in SF and earns minimum and renting a room to stay and your counterpart in the central valley is earning the same thing as you and renting an apartment because the rents are cheaper over there?

[RosieSD]

Originally Posted by majoun

T
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.

I wondered about this too majoun.

[shooting4life]

Originally Posted by payutenyodagimas

there are reasons why some places have different cost of living. if you are a server in SF and earns minimum and renting a room to stay and your counterpart in the central valley is earning the same thing as you and renting an apartment because the rents are cheaper over there?

So because someone chooses to live an expensive area they shouldn't pay their fair share? Like millionaires living in pacific heights in SF should get a tax break because cost of living is so high In That zip code?

[RosieSD]

Originally Posted by majoun

I thought the mortgage deduction will be eliminated. That would have no effect on the states in which people actually voted for Trump.

As the proposal currently stands, the mortgage deduction will be kept, although they might make some adjustments to it.

What is on the chopping block is the credit for state income taxes.

Let's keep an eye on this as new information comes out from Congress about the details. If you spot any additional information on this, please post it here.

I'm particularly interested in how removing the state income tax credit may affect Californians, since this is the California forum.

Of course, we're all Americans, so we'll all want to also see how this plan pans out for affecting things like the national debt, but that will probably be best discussed in the Politics forum.

[Logic87]

Originally Posted by shooting4life

So because someone chooses to live an expensive area they shouldn't pay their fair share? Like millionaires living in pacific heights in SF should get a tax break because cost of living is so high In That zip code?

Yep exactly. With the same logic why shouldn't California income Taxes provide larger tax breaks for Californians living in San Francisco and Los Angeles compared to those that live in say Bakersfield? Bakersfield has lower COL and you could maybe argue San Francisco and Los Angeles provide more then they take in taxes. Let's provide bigger tax breaks for the upper middle class in Los Angeles and San Francisco!

Back to the OP, I find it interesting how so many people love their tax deduction. Many people don't seem to understand that providing tax deductions for State and Local taxes, mortgage interest deductions and etc are subsidizies borne onto other taxpayers not to mention they have economic implications.

Studies have shown the mortgage interest deductions entice buyers to buy pay more for homes, thus, shifting demand and increasing prices for all. The same logic could be applied for deductions for property taxes. Getting rid of these taxes should help many middle income homebuyers that do not itemize.

In addition, State and Local deductions entices Californian politician to spend above their means and increase taxes because they know many of the high income taxpayers will be provided deductions for income taxes on their federal return. Thus, taxpayers from states that have balanced budgets with lower taxes are subsidizing States with high taxes. Now the argument that could be made is Californian taxpayers provide more resources then they take but that is another argument and could be a valid one.

Trumps plan has issues in my opinion but trying to simplify the tax code for most individuals shouldn't be one of them.

[DKM]

It should be an even decrease for all. All this fiddling to reward some and take from others will be a political mess. At least W Bush figured that out early and decreased everyone's taxes.

[expatCA]

Originally Posted by DKM

It should be an even decrease for all. All this fiddling to reward some and take from others will be a political mess. At least W Bush figured that out early and decreased everyone's taxes.

How about a flat sales tax of 10% on everything you buy except fresh food. No Income tax at the federal level for individuals. Now that means if you spend $100.00 you pay $1.00 if a rich person pays $10,000.00 they pay $1,000.00. Poor pay less because they buy less and the rich pay more because they spend more. In the UK they have such a tax called the VAT tax. It is higher, but the principle works.

[payutenyodagimas]

Originally Posted by expatCA

How about a flat sales tax of 10% on everything you buy except fresh food. No Income tax at the federal level for individuals. Now that means if you spend $100.00 you pay $1.00 if a rich person pays $10,000.00 they pay $1,000.00. Poor pay less because they buy less and the rich pay more because they spend more. In the UK they have such a tax called the VAT tax. It is higher, but the principle works.

State/Local Govt Sales Tax = 9-10%
Federal = 10% (is this enough to compensate for federal inc tax?)
Total = 20%+(-)



more than a hundred years ago, there was not even a federal income tax except during the civil war. and yet the federal debt kept on piling up despite the imposition of income tax