Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers • Hacker News Board

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#81

Post by BeetleB » Tue, Dec 05, 2017, 8:47 PM UTC

lettergram wrote: post #3

This doesn't really make sense to me. So it appears that the tax bill generally is reducing the tax code and closing loop-holes (which typically is considered "good" to the left, and the right). In this case, it looks like the tax reductions are reduced in states that have higher taxes. Well that makes sense, because the states with lower taxes have less to write off (as they have 0% in some cases). Of course Texas w…

There are legitimate criticisms of the bill (e.g. allowing corporations to deduct state taxes, but not individuals, or individual tax cuts expiring but the business ones are permanent).

But putting those aside, I agree with you in principle. Of course the bill hurts people the most who are in high tax states. They want the high taxes, and they got it. Why should the rest of the country subsidize their federal taxes because they are paying more state income taxes? (Actually, there are some good reasons for this, but they should be debated rather than merely dismissing it as a bias against people in those states).

And while I'm not 100% sure, the majority of the population is getting a tax cut - most people could not itemize with a $12000 deduction, and now they're getting another $3-4K ($12K - minus the personal exemptions they're losing).

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#82

Post by munk-a » Tue, Dec 05, 2017, 8:47 PM UTC

nostromo wrote: post #12

I don't see why state taxes should be federally deductible to begin with. Two families both make $250,000 a year. One is in New York and one is in Texas. The family in Texas is carrying more of the federal tax burden than the family in New York. Why? Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes. If you're a progressive this should make even less sense:…

Howdy, I'm a progressive!

This is actually the one portion of the tax cut that I'd like to see retained... but I am really struggling as to why they wanted to remove the SALT exemption except to punish blue states. The party of states rights just removed the ability for individual states to try and innovate on budgetary matters and optimize spending into certain sectors of their economy they find particularly relevant - repealing this is a federalist policy which doesn't really meld with their messaging.

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#83

Post by SmellTheGlove » Tue, Dec 05, 2017, 8:47 PM UTC

refurb wrote: post #14

mmanfrin wrote: post #5

I'm a highish earning single homeowner in Alameda County (Bay Area) -- between the Mortgage Interest deduction, the Property Tax deduction, and the State Income Tax deduction being slated for removal, my taxable income is about to go up something like $60k, which is a large chunk of my actual income. This tax bill utterly fucks me, to the point I'm considering selling my house to get ahead of the inevitable housing c…

People have been clamoring for more taxes on the rich. Well, this is what it looks like. Oh wait! You didn't think you were rich, right?

> People have been clamoring for more taxes on the rich. Well, this is what it looks like.

How exactly is this a tax increase on the rich?

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#84

Post by BeetleB » Tue, Dec 05, 2017, 8:47 PM UTC

davexunit wrote: post #10

lettergram wrote: post #3

This doesn't really make sense to me. So it appears that the tax bill generally is reducing the tax code and closing loop-holes (which typically is considered "good" to the left, and the right). In this case, it looks like the tax reductions are reduced in states that have higher taxes. Well that makes sense, because the states with lower taxes have less to write off (as they have 0% in some cases). Of course Texas w…

This is possibly the worst interpretation of the tax bill I have seen yet, maybe excluding Mitch McConnell's ludicrous statement that the bill is either deficit neutral or reduces the deficit.

Maybe you can point out flaws with the comment?

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#85

Post by ghouse » Tue, Dec 05, 2017, 8:47 PM UTC

vostok wrote: post #60

nostromo wrote: post #12

I don't see why state taxes should be federally deductible to begin with. Two families both make $250,000 a year. One is in New York and one is in Texas. The family in Texas is carrying more of the federal tax burden than the family in New York. Why? Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes. If you're a progressive this should make even less sense:…

Two questions: ---- 1. What about the property tax deduction? Why are property taxes deductible, but income taxes are not? ---- 2. How do you feel about the mortgage interest deduction? A very similar question could be asked. Two families both make $250,000 a year. One took out a $750k mortgage and one took out a $300k mortgage. Why should the second family carry more of federal tax burden than the first? I don't hav…

Two separate issues -- State and Local Taxes (SALT) are income, property and other taxes collected at the non-federal level. They have been deductible since the creation of the federal income tax. In part, because the federal government recognizes that resources are more efficiently allocated locally. And that is one reason why higher taxed states pay more into the federal government's budget than they receive in benefits. [1]

The Mortgage Interest Deduction is simply a wealth transfer from people who don't own homes to people who do own homes.

[1] https://www.theatlantic.com/business/archive/2014/05/which-s...

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#86

Post by deadmetheny » Tue, Dec 05, 2017, 8:47 PM UTC

eridius wrote: post #65

refurb wrote: post #14

Earlier quoted context omitted.

People have been clamoring for more taxes on the rich. Well, this is what it looks like. Oh wait! You didn't think you were rich, right?

No, this is a hit on the upper middle class. The actual rich aren't feeling the pain.

Spoiler alert: if you make over $200,000 a year, you are the rich compared to most of the rest of the country.

I love that a factual statement is getting downvoted, btw. Get a grip on your frame of reference, HN.

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#87

Post by AlexandrB » Tue, Dec 05, 2017, 8:47 PM UTC

eli wrote: post #52

nostromo wrote: post #12

I don't see why state taxes should be federally deductible to begin with. Two families both make $250,000 a year. One is in New York and one is in Texas. The family in Texas is carrying more of the federal tax burden than the family in New York. Why? Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes. If you're a progressive this should make even less sense:…

Taxes aren't based on how much you benefit from government. Progressive tax rates make sense because the wealthy can afford to pay a larger share of their paycheck to support shared society. Not because they necessarily derive more benefits than the middle class. If we taxed people based on the benefits they receive from the government, then the homeless would pay a fortune.

> If we taxes people based on the benefits they receive from the government, then the homeless would pay a fortune.

This is a comical simplification. The public and legal infrastructure in America overwhelmingly helps companies and investors make money. Where would UPS be without public roads? Where would Warren Buffet be without a stable legal framework for investment? That's not to mention the military spending that secures all of these fortunes against foreign aggression.

To claim that the poor disproportionately benefit from government spending is missing the forest for the trees.

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#88

Post by closeparen » Tue, Dec 05, 2017, 8:47 PM UTC

vostok wrote: post #60

nostromo wrote: post #12

I don't see why state taxes should be federally deductible to begin with. Two families both make $250,000 a year. One is in New York and one is in Texas. The family in Texas is carrying more of the federal tax burden than the family in New York. Why? Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes. If you're a progressive this should make even less sense:…

Two questions: ---- 1. What about the property tax deduction? Why are property taxes deductible, but income taxes are not? ---- 2. How do you feel about the mortgage interest deduction? A very similar question could be asked. Two families both make $250,000 a year. One took out a $750k mortgage and one took out a $300k mortgage. Why should the second family carry more of federal tax burden than the first? I don't hav…

Because they are vastly wealthier to afford a house that costs ~3x the median?

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#89

Post by maxerickson » Tue, Dec 05, 2017, 8:48 PM UTC

vostok wrote: post #60

nostromo wrote: post #12

I don't see why state taxes should be federally deductible to begin with. Two families both make $250,000 a year. One is in New York and one is in Texas. The family in Texas is carrying more of the federal tax burden than the family in New York. Why? Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes. If you're a progressive this should make even less sense:…

Two questions: ---- 1. What about the property tax deduction? Why are property taxes deductible, but income taxes are not? ---- 2. How do you feel about the mortgage interest deduction? A very similar question could be asked. Two families both make $250,000 a year. One took out a $750k mortgage and one took out a $300k mortgage. Why should the second family carry more of federal tax burden than the first? I don't hav…

The right answer is to get rid of the deduction. It's regressive (as you point out) and reflected in the costs of housing anyway (people choose the monthly payment they can afford not the house they can afford).

Re: Among the Tax Bill’s Biggest Losers: High-Income, Blue State Taxpayers

#90

Post by dmode » Tue, Dec 05, 2017, 8:48 PM UTC

wanderer2323 wrote: post #48

mmanfrin wrote: post #5

I'm a highish earning single homeowner in Alameda County (Bay Area) -- between the Mortgage Interest deduction, the Property Tax deduction, and the State Income Tax deduction being slated for removal, my taxable income is about to go up something like $60k, which is a large chunk of my actual income. This tax bill utterly fucks me, to the point I'm considering selling my house to get ahead of the inevitable housing c…

The government was subsidizing your lifestyle -- owning an expensive house in a state with a high income tax. It does not want to do this anymore. It makes as much economic sense as other subsidies do. Props for figuring out that taxation is theft though. Maybe next time don't vote for state government with highest state income tax in US?

Government subsidizes a ton of lifestyles. People with children. People who go to church. People with "pass throughs". People with estates. People with businesses. But somehow income tax in blue state is the target.