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Trump and the congressional Republicans are trying to rewrite the tax code now. One of their points may be to increase the standard deduction, but get rid of the deduction for state and local taxes. What happens to NYC if this goes through. With it's huge tax burden, and what will essentially be double taxation, NYC would be at a HUGE disadvantage to other states/cities, with lower or no income taxes.
Trump and the congressional Republicans are trying to rewrite the tax code now. One of their points may be to increase the standard deduction, but get rid of the deduction for state and local taxes. What happens to NYC if this goes through. With it's huge tax burden, and what will essentially be double taxation, NYC would be at a HUGE disadvantage to other states/cities, with lower or no income taxes.
I could see a major exodus.
Exodus to where exactly? I guess if my company decides to relocate to another with no state taxes maybe. Otherwise for the middle class to upper middle class there's no where to go because the high property taxes in the NYC suburbs will also become non deductible. But sure if you make more than 4/5 hundred thousand then it may start to make sense because that million dollar home in the burbs with the 25k taxes is roughly equal to your NYC income tax.
I can see maybe an uptick in super high earners crossing into NJ, LI or Westchester for this reason. I also think it'll cause more retires on a somewhat limited fixed income with high property taxes in the burbs to dump their properties and leave.
You do realize that lots for people move state to state and change jobs. I could see a lot of people moving to TX and FL. I know a number of people who've done this.
You do realize that lots for people move state to state and change jobs. I could see a lot of people moving to TX and FL. I know a number of people who've done this.
I know some too, but they all did it through an internal company transfer and for the most part kept their salaries intact. It was easier, at least for the people that I knew who did it because they only had one person earning the bigger bucks who had the transfer. Now if you have a couple both making 6 figures it's much harder for both of them to find a 6 figure job simultaneously outside of a few select fields like tech and medicine.
There is more to worry about than losing the tax deduction, this crap about doubling the personal exemption will likely make your taxes go up:
"Here's how that math works. Let's say you are single with no dependents, and you have a moderate income. Currently, you get to take the standard deduction ($6,350) and one personal exemption ($4,050). If you are 65 or older, you also get to take an additional standard deduction ($1,250). That adds to $10,400, or $11,650 if you're a senior citizen.
The Republican plan would replace all these provisions with a single deduction of $12,000 ($24,000 for married couples.) That's a 15% increase — except for seniors, who get a 3% increase. And then your first dollar of taxable income would be subjected to a 12% tax rate, instead of the current 10%. But don't worry, the framework says "additional tax relief," as yet unspecified, will emerge for you during the committee process." Trump tax plan: 'Doubled standard deduction' is misleading - Business Insider
There is more to worry about than losing the tax deduction, this crap about doubling the personal exemption will likely make your taxes go up:
"Here's how that math works. Let's say you are single with no dependents, and you have a moderate income. Currently, you get to take the standard deduction ($6,350) and one personal exemption ($4,050). If you are 65 or older, you also get to take an additional standard deduction ($1,250). That adds to $10,400, or $11,650 if you're a senior citizen.
The Republican plan would replace all these provisions with a single deduction of $12,000 ($24,000 for married couples.) That's a 15% increase — except for seniors, who get a 3% increase. And then your first dollar of taxable income would be subjected to a 12% tax rate, instead of the current 10%. But don't worry, the framework says "additional tax relief," as yet unspecified, will emerge for you during the committee process." Trump tax plan: 'Doubled standard deduction' is misleading - Business Insider
Right, the only thing certain seems to be lower taxes for businesses. Also with a lower top rate, less brackets, and less qualifying deductions, it looks like it may also be a giveaway for high earners in low tax states. The lower middle earners in low tax states without a hoard of children seems to also benefit from this since personal exemptions are gone and the new standard deduction goes above and beyond what they were previously deducting.
Last edited by bumblebyz; 09-27-2017 at 12:18 PM..
The loss of the state and local taxes deduction will hit a whole boatload of middle class NY homeowners. And by middle class, I mean middle class. Not working class like politicians pretend are the middle class.
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