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Prominent democrats in the House and Senate have been trying to repeal just the SALT changes. Which is simply a tax cut for wealthy in high tax states. They have been trying this for 2 years now.
The democrat only house coronavirus bill they passed that was a non starter in the senate removed this cap for 2 years.
This doesn't effect low and middle income earners. It is a HUGE tax reduction for high income earners in high tax states though.
It's a tax on a tax.
Placing the cap on the deduction hurt a lot of people who have to live where real estate is expensive and the homes are smaller for the money, and it got into the new tax code as an attack upon Bluer states, which are the giving states, always putting more money into the US Federal treasury that they receive back in Federal spending. This was done in order to help finance the outrageous tax cuts the global corporations and the filthy rich like Trump. The cap should be removed.
You made the unsubstantiated claim that Democrats want to "raise taxes on most americans and overall, give a tax cut to their key donors " which you have still not given any evidence for.
Placing the cap on the deduction hurt a lot of people who have to live where real estate is expensive and the homes are smaller for the money, and it got into the new tax code as an attack upon Bluer states, which are the giving states, always putting more money into the US Federal treasury that they receive back in Federal spending. This was done in order to help finance the outrageous tax cuts the global corporations and the filthy rich like Trump. The cap should be removed.
You made the unsubstantiated claim that Democrats want to "raise taxes on most americans and overall, give a tax cut to their key donors " which you have still not given any evidence for.
This is one of the reasons that we need to overhaul this dysfunctional federal income tax system all together. Blue, red, whatever. No state should be supporting another. Or at the very least allow the blue states to support other blue states and red states to support other red states. This way blue states can keep their money inside to assist residents with high COL. On that I think much of the disagreement comes from misunderstanding since COL seems to be hard to quantify.
Unlimited is one extreme and 10K is another extreme. 10K is 0K. I don't even know why they made it 10K. It made the deduction meaningless. So, they essentially removed it. They could have, instead, adjusted based on income. A family of 4 earning 200K in a high COL state is a far cry from rich. What is the point of removing their deduction and their exemptions other than to pick at bones? In the end the feds were able to collect money from these people so they could give greater relief to those who would give two squats about 3-5k.
Placing the cap on the deduction hurt a lot of people who have to live where real estate is expensive and the homes are smaller for the money, and it got into the new tax code as an attack upon Bluer states, which are the giving states, always putting more money into the US Federal treasury that they receive back in Federal spending. This was done in order to help finance the outrageous tax cuts the global corporations and the filthy rich like Trump. The cap should be removed.
You made the unsubstantiated claim that Democrats want to "raise taxes on most americans and overall, give a tax cut to their key donors " which you have still not given any evidence for.
It's not a tax on a tax.
State taxes are completely different thing than federal taxes, go to an entirely different entity, and both are taxes on earned income. Sounds like individuals have a problem with state taxes. I would also be interested in how SALT deductions are considered in these statistics. Fact is they are essentially payments made from federal government to state governments, but I highly doubt they are included.
Washington has very high property values and no income tax. Doesn't hurt them.
Spending is an argument that is very complex that I would be happy to have. Who knows where all this money is going? I certainly don't.
It's not a tax on a tax.
State taxes are completely different thing than federal taxes, go to an entirely different entity, and both are taxes on earned income. If individuals have a problem with state taxes. I would also be interested in how SALT deductions are considered in these statistics. Fact is they are essentially payments made from federal government to state governments, but I highly doubt they are included.
Washington has very high property values and no income tax. Doesn't hurt them.
Spending is an argument that is very complex that I would be happy to have. Who knows where all this money is going? I certainly don't.
Unlimited is one extreme and 10K is another extreme. 10K is 0K. I don't even know why they made it 10K. It made the deduction meaningless. So, they essentially removed it. They could have, instead, adjusted based on income. A family of 4 earning 200K in a high COL state is a far cry from rich. What is the point of removing their deduction and their exemptions other than to pick at bones? In the end the feds were able to collect money from these people so they could give greater relief to those who would give two squats about 3-5k.
A family of 4 earning 200k in New York or Cali would likely see an effective increase in federal taxes due from this deduction of 3k. This is equally offset by reduction in the federal tax rate. Maybe your argument is they don't benefit from having their state taxes being double what mine are? Where does all that money go? Supposedly it is for the benefit of the people in the state. Florida is comparable in being a large state that is a heavy tourist destination state yet it has a tax rate of 0%. Is that extra 13% withheld in California really worth it?
Where it really starts to kick in is familys making 400k+. That is def no longer middle class though.
Unlimited is one extreme and 10K is another extreme. 10K is 0K. I don't even know why they made it 10K. It made the deduction meaningless. So, they essentially removed it. They could have, instead, adjusted based on income. A family of 4 earning 200K in a high COL state is a far cry from rich. What is the point of removing their deduction and their exemptions other than to pick at bones? In the end the feds were able to collect money from these people so they could give greater relief to those who would give two squats about 3-5k.
Here's the difference, as I posted, earlier: What happened with Trump's 2017 tax cut:
Quote:
"A $1 million-plus wage earner came to her tax preparer last weekend to see what the Trump tax cuts, which went into effect for the 2018 tax year, would mean for her tax return due April 15. And boy, was she disappointed. Last year, she deducted $245,500 in real estate taxes, state income taxes and personal property taxes. This year her deduction for these state and local taxes was limited to just $10,000, because of the new SALT limit.
“It’s a real hit,” says her tax pro, Claudia Hill, an enrolled agent in Cupertino, California. “This is why people who have this kind of situation are screaming.”
...To fully benefit from the reduction in the top income tax rate, you’d have to live in a state with no state income tax, says tax lawyer Kaye Thomas, who figures that California’s highest earners are facing a federal effective rate that’s 2.7 percentage points higher in 2018 than 2017 because of the interaction between state and federal taxes."
The SALT tax deduction she took on her US 1040 for...
2017: $245,500
2018: just $10,000
The $235,500 over $10,000 she could no longer deduct in 2018 and going forward was taxed at her marginal rate, likely at 37% which would be an extra $87,135 in federal income tax. That's NOT a tax cut; it's a tax INCREASE on the rich.
To further illustrate the point, examples:
$150,000 household pays $15,000 in SALT.
Deduct $10,000. Taxed on that extra $5,000 at 22% marginal tax rate = $1,100
$1.5 million household pays $150,000 in SALT.
Deduct $10,000. Taxed on that extra $140,000 at 37% marginal tax rate = $51,800
There's a 10 times difference in household income and SALT between the two households, but the top 1%-er is paying about 50 timesmore in extra tax than the middle class household due to the new SALT deduction limit.
Understand? But Biden and the Dems want to repeal the $10,000 SALT deduction limit and reinstate the formerly unlimited deduction. That's a HUGE tax break for the rich, thanks to Biden and the Dems.
This is one of the reasons that we need to overhaul this dysfunctional federal income tax system all together. Blue, red, whatever. No state should be supporting another. Or at the very least allow the blue states to support other blue states and red states to support other red states. This way blue states can keep their money inside to assist residents with high COL. On that I think much of the disagreement comes from misunderstanding since COL seems to be hard to quantify.
I think dividing things red and blue is a terrible idea.
New mexico used to be a red state and is now blue. It routinely tops the list of most federal taxes received.
I would venture to guess that is because it is sparsely populated yet has a high number of air force bases and national R&D labs. It is home of 0 fortune 500 companies - large corporations do yield lots of federal tax dollars for the most part.
Trumps tax cuts benefited 90% of americans.
Who did they hurt? High income earners for the two big powerhouse liberal states - New York and California. This is where the big money comes from in the Democrat party. The two states also have the most Billionares in the country. The SALT deduction cap ended up given people making in the 500k+ range a substantial tax increase.
The tax bill also removed exemption from some private university. Harvard being a prime example. These universities have endowments the size of a large hedge fund that were growing at ridiculous rates and not really being used for the benefit of students or researchers. Harvards first taxable bill last year was an estimated 50 million.
Repeal the Tax cuts and these two groups are by far the biggest winners while 90% of americans are the losers.
Why try to reason with the unreasonable, if Biden gets elected more than 90% of Americans will be the losers!
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