Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

nytimes.com

Post reply on HN
Print view View original

141–150 of 275 posts

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

#141

Post by stillhere »

hcknwscommenter wrote: post #110
lebanon_tn wrote: post #94

Earlier quoted context omitted.

Lifelong Californian here. Recently moved to Florida. You should consider complaining to your local and state government about your high taxes. Why should workers in other states subsidize local taxes for higher cost of living areas through federal deductions? Force your politicians to justify what you are paying.

"Why should workers in other states subsidize local taxes for higher cost of living areas through federal deducations" Because those workers do not in fact subsidize my local taxes. As a Californian, I subsidize those low tax states as CA residents pay more in federal taxes than the state gets in federal benefits.

Just because other states have weaker economies doesn't mean the residents aren't contributing their relative fair share.

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

#142

Post by eli »

cannonedhamster wrote: post #130
eli wrote: post #52

Earlier quoted context omitted.

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 provably and patently false. Homeless people don't have their good protected by the police, don't get fire protection, don't drive, don't get deductions for businesses, don't get inheritance from their wealthy, millionaire parents, don't get lobbying influence. The entire system is set up to the…

My point was that we are not taxed based on the benefits we consume (if we were they'd be fees not income taxes). I did not mean to imply the homeless have it easy.

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

#143

Post by jonathankoren »

The tax bill has multiple ploys, most central of which is a giant corporate tax reduction. (Note how that tax cut is permanent, while personal tax cuts are temporary.), along with long standing GOP wish list items like elimination of the estate tax and pass through income.

That said, there is also an animous towards the rich Democratic states, which this disproportionately hurts. The short game is to stick it to the libs. The long game is to try to eliminate state income taxes.

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

#144

Post by jartelt »

matt_wulfeck wrote: post #63
jartelt wrote: post #23

Overall this bill seems really, really bad and poorly implemented (and costly). But as a renter in the bay area, I do like that increasing the standard deduction and reducing some of the other popular deductions will decrease the large tax break homeowners have been receiving. In my opinion we have been treating renters unfairly by letting homeowners deduct so much mortgage interest, property taxes, etc. We already i…

It sounds like you actually don’t think the bill is bad.

Actually, I do think the bill is bad and would not vote to pass it if I was in the position to do so. I think the benefits are skewed way too far in favor of wealthy individuals and corporations and the cuts will not be paid for by growth. However, if the tax bill only got rid of the mortgage interest deduction and property tax deductions, I would happily support it (unfortunately this is not the case). You are allowed to point out some positive things about an overall crappy bill.

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

#145

Post by hcknwscommenter »

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?

You think it's just an accident that the rich states are high tax? No, the rich states have done much more to invest in education, safety nets, and regulation (work place safety, environment, police activity, etc.). That is why they have better economies. This tax bill just takes a look at all that investment and says: nope.

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

#146

Post by Willson50 »

davidjnelson wrote: post #97
deadmetheny wrote: post #86

Earlier quoted context omitted.

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.

Rich is relative to housing costs.

Feel free to move.

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

#147

Post by SmellTheGlove »

freditup wrote: post #42

First, this article would've been much better off using medians instead of means. High earner outliers tend to skew stats like these. Second, it's interesting to see people who were in favor of tax increases suddenly change their mind when it hits them. While I agree that tax cuts for the rich seem unnecessary, some tax hikes for the upper middle-class aren't out of line compared with a Democrat led tax plan. I wonde…

> Second, it's interesting to see people who were in favor of tax increases suddenly change their mind when it hits them.

I'm very much in favor of increasing taxes, if that tax increase went to taking care of some societal problem (I don't care what it is, so for the sake of argument, let's just stipulate that it's a problem we both agree needs funding to solve). In this case, anyone paying more in taxes is just subsidizing those who are seeing a cut. It's more of a shift, given that it's projected to increase the federal debt by quite a bit. I'd be okay with that if we were actually putting more spending money in the pockets of the lower and middle classes, but I'm not sure that's the case. If this is really about cutting taxes across the board, I'm okay with that too, but we need to cut spending and I'd like us to take a look at the defense budget before going after social programs.

> Finally, although the removal of the SALT deduction will cost me significantly, I'm not sure I understand how the deduction makes sense. Why should a state raising their taxes mean you have less of a federal obligation? It only makes sense to me if states with higher taxes use less federal resources.

Deducting SALT makes sense in order to avoid double taxation. To me, it makes sense to pay the local govt first, then the state, then the fed, in that order. In theory, they will provide services to us in that order.

Mortgage interest and property tax deductions don't make sense to me, though. I don't really see why I should be able to deduct these, but my hypothetical tenant can't deduct their rent. None of this should have been deductible in the first place.

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

#148

Post by dragonwriter »

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 don't see why state taxes should be federally deductible to begin with.

The same reason legitimate business expenses (including, of course, state and local taxes paid by businesses, which are not affected by this reform) should be and are, and the same reason lots of personal expenses (some of which are, some of which are not currently) should be: expenses which are essential prerequisites to or consequence of earning income should be netted against income before taxing it.

My state and local income, property, and sales tax are the support payments for the physical and social infrastructure that allows me to earn the income I do. With the federal deduction (and assuming state taxes with a marginal rate below unity), it's in my interest to engage politically to optimize for my net return before federal taxes; without the federal deduction, it becomes worthwhile to sacrifice income (before and after) state taxes for lower state taxes, so long as the reduced federal tax cost of the lower pre-state-tax income is enough to offset the reduced net-of-state-tax-but-before-federal-tax income.

This encourages producing less market value when the net after state taxes is equal, encouraging economic contraction.

For illustration, suppose, for simplicity, a federal flat marginal tax rate of 30% percent, and the ability to make $100K with a state tax rate of 10% or $94K with a state tax rate of 5%, and no other deductions.

Ignoring federal tax, the optimum choice is to choose the $100K income with the 10% tax: it provides an $90K net (of state taxes) income, compared to $89.3K in the lower-base-pay regime.

If you deduct state taxes from federal taxes, the incentives are unchanged, the net becomes $63K vs. $62.51 with the high-income, high-tax choice providing the higher net income.

But if you don't deduct the state taxes, the incentives are flipped: producing less market value even after the cost of local infrastructure becomes preferable, with the net being $60K vs. $61.10K.

Supporters of this proposal say it punishes people in high-tax states for bad political decisions; but the math is that it punishes them for good political decisions—for choosing increased taxes when the increase in market value produced that those taxes enable is greater than the value of the taxes.

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

#149

Post by munk-a »

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…

You're missing one even more heinous point, renters. A family paying off their 300k mortgage is getting a decrease in taxes owed while being subsidized for paying into an asset. The renting family is not being subsidized and they will never again see the money they are spending on rent. In most areas this is particularly twisted as mortgages will run beneath rental costs for the same standard of living. So the only real difference is that renters don't have to deal with the costs of damage to their asset... no money out of pocket for repainting or replacing appliances or structural issues and if their building slides into the sea they aren't out the value of the property.

Often times this also gets a bonus racist angle since minorities have a harder time securing a mortgage which traps them into overpaying for housing while struggling to save to pay less for their housing.

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

#150

Post by jonathankoren »

BeetleB wrote: post #81
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 b…

The high tax states are generally the rich donor states. No one in Mississippi is subsidizing California. It’s actua quite the opposite.
Post reply on HN