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

nytimes.com

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

#111

Post by shagmin »

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:…

I like the other replies, but I'd like to add something that I haven't seen discussed much. The median income in New York and California is probably much higher compared to any random flyover red state. Your average household in NY and CA is going to be at a higher marginal tax rate than say Nebraska. I haven't done the math, but I'd suspect the deduction flattens this difference to some extent.

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

#112

Post by sergiotapia »

cbhl wrote: post #29

This seems win-win to me. Techies and bankers pay more in taxes. People in fly-over states get a small tax cut, and maybe can buy a few extra weeks' groceries for their kids.

It truly is a win-win. Take a good hard look at the kind of people complaining or trying to paint this tax bill as "bad" or "dangerous". Consider the source!

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

#113

Post by SmellTheGlove »

koolba wrote: post #36
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 counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? If you want to lower your State tax bill then lobby your State representatives. If you want to lower your property taxes then lobby your local officials. Or vote with your feet and move somewhere that doesn’t…

> The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes?

High tax states tend to pay in more than they see back in benefits.

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

#114

Post by munk-a »

TheAdamAndChe wrote: post #76
dragonwriter wrote: post #66

Earlier quoted context omitted.

> People have been clamoring for more taxes on the rich. But this “tax reform”, in net, does exactly the opposite.

Yet this particular reform _does_ tax the rich more. It's mostly those making >$200k that will be hit, and it removes what were basically subsidies for the richest states in the country.

... And then it removes the alternative minimum tax, starts to phase out the estate tax and lowers pass through income tax rates. This tax cut might hit some really stupid rich people hard, but anyone wise enough to hire an accountant is going to get a lot more take home.

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

#115

Post by harryh »

jbooth wrote: post #56
harryh wrote: post #19

Earlier quoted context omitted.

There are numerous items written by economists that discuss in detail why state and local taxes and mortgage interest should not be deductible from federal taxes. It's very highly agreed upon. Perhaps you should seek out some of this literature. I also strongly suspect that you are overestimating the magnitude of the tax increase you will see but if course it's very hard to know without the details of your particular…

That's all fine, but IN CONTEXT, OP is still getting robbed. They're paying higher taxes while the super-rich pay lower taxes. They could have passed a bill that eliminated those deductions and gave corresponding tax breaks to the middle class. They could have passed a bill that skipped the tax breaks for the super-rich and actually cut the deficit. I'm OK with paying my fair share if we were actually solving problem…

There are tax breaks to the middle + lower classes. Lower bracket rates are lowered, the standard deduction (which is used by people on the lower end of the income spectrum much more) is dramatically increased, and the child tax credit is increased.

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

#116

Post by AFNobody »

TheAdamAndChe wrote: post #100
ghouse wrote: post #67

Earlier quoted context omitted.

> Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes. New York gets about $0.80 for every $1 of taxes paid. Texas gets about $1.50. [1] [1] https://www.theatlantic.com/business/archive/2014/05/which-s...

Both states still recieve the same benefits from the federal government, it's mostly just demographic and economic differences that cause different states to receive different amounts of aid. Or do you really think West Virginians, who are mostly poor, should receive exactly the amount as New York, who is much more rich overall?

> Both states still recieve the same benefits from the federal government, it's mostly just demographic and economic differences that cause different states to receive different amounts of aid. Or do you really think West Virginians, who are mostly poor, should receive exactly the amount as New York, who is much more rich overall?

That isn't correct. Pork spending and state-targeted spending to bribe lawmakers has been a traditional political activity since the founding of the US.

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

#117

Post by hcknwscommenter »

cbhl wrote: post #44
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…

Who are the ultra-rich getting a tax cut? I'm under the impression that it's the corporations getting the biggest big tax cut in this bill -- so possibly your employer.

The CBO projects that those with income of greater than 1M a year get a tax cut.

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

#118

Post by TheAdamAndChe »

mullen wrote: post #106
TheAdamAndChe wrote: post #24

Earlier quoted context omitted.

When the federal government gives high tax states tax cuts, that means those areas give less to the federal government, meaning those generally rich states end up getting federally subsidized by the poorer states. How does _that_ make sense? Shouldn't the richer areas help pay for the poor? Why not do something about the high taxes in your state instead?

We do subsidize poor states. You speak as though Red states contribute anything to the federal government. With the exception of Texas, Georgia and some oil rich states, all of the Red states are takers and just about all of the Blue states are givers.

Red states also tend to have a lot more poverty and less economic development. Why should rich areas of the country receive just as much federal aid as poor areas? It makes sense that different states receive different aid.

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

#119

Post by froindt »

closeparen wrote: post #88
vostok wrote: post #60

Earlier quoted context omitted.

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?

You got it mixed around. Income is equal for both parties, but the family in the 300k house pays more in taxes because they deducted less interest from their income.

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

#120

Post by dragonwriter »

lettergram wrote: post #17
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…

California is the insane state with created the taxes. The government is trying to simplify the tax code, that means you should be able to say: "I'm taxed at 15%, and that means out of $100k you get $85k take home" Not all the deductions. I'm not really, for or against this bill. I used to live in Alameda, CA and thought the taxes were insane. The bag tax, the income tax, the property tax, literally if you didn't hav…

> The government is trying to simplify the tax code

False; the tax reform creates a whole host of new targeted tax breaks; it's not about simplification, just moving the tax burden. And, in net, moving it to the poor.

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