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

#161

Post by closeparen » Tue, Dec 05, 2017, 9:11 PM UTC

hcknwscommenter wrote: post #102

SmellTheGlove wrote: post #43

Earlier quoted context omitted.

I'm approaching from the opposite situation - I have a paid off house in my lower cost of living state and am relocating to the Bay Area for a job next month. I will not be selling my current home, nor buying in the Bay Area, until the fallout of this tax bill is known. At the very least, housing prices may come down where I'm going, but likely not where I'm moving from (since the mortgage interest deduction on most…

"That said, it's always been a little odd to me that we could deduct our mortgage interest and property taxes, but a renter cannot even though they're paying a good portion of that on our behalf." I'm not going to suggest that it is as simple as the following, but the underlying rationale is that the renter benefits from lower rent than it would otherwise be because the landlord has lower expenses.

Landlords don’t charge their own expenses + some fixed margin. They charge what the market will bear. Expensive blue state housing markets are at no risk of seeing rents fall below landlords’ costs.

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

#162

Post by api » Tue, Dec 05, 2017, 9:11 PM UTC

I have very mixed feelings about this part of the tax plan.

For years I've been concerned about the increasing geographic gap between rich and poor in America. All talent, capital, and entrepreneurship is increasingly concentrated in coastal cities. This is impoverishing the interior and at the same time driving real estate hyperinflation on the coasts.

The middle class and the young get caught in a vice here. You either live somewhere with affordable real estate but no career opportunities or you live somewhere where you can advance your career but can never afford a decent home and can never escape ever-increasing rent. Either way you are screwed. Rot in a backwater or spend everything on real estate and never accumulate savings.

I'm tempted to support anything with the potential to reverse this horrible trend.

At the same time I also see this as unfair. Coastal blue states already collectively pay more in taxes than they receive from the Fed.

I'm a bit torn on this. I'm also torn on the corporate income tax cut.

The rest of the tax bill seems mostly bad, so on balance I am not supporting it.

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

#163

Post by hcknwscommenter » Tue, Dec 05, 2017, 9:12 PM UTC

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.

"People in fly-over states get a small tax cut, and maybe can buy a few extra weeks' groceries for their kids."

And where are you getting this? It is demonstrably untrue by 2027. Read the CBO report.

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

#164

Post by [deleted] » Tue, Dec 05, 2017, 9:12 PM UTC

matt_wulfeck wrote: post #54

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?

Depends on if you mean rich for California, rich for the USA, or rich for the world. Oh wait! They didn’t think wealth was relative, right?

[deleted]

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

#165

Post by creaghpatr » Tue, Dec 05, 2017, 9:13 PM UTC

AFNobody wrote: post #107

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 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. This assertion isn't true. Federal policies already heavily favor funding Red, rural states over more urban states. It "sounds" tr…

>Federal policies already heavily favor funding Red, rural states over more urban states. It "sounds" true when you think about a person/household but when you factor in the other state services being funded (i.e. roads) it falls apart.

Much of that funding goes to subsidies (farming, energy, etc) for which the whole country enjoys the benefits, if not proportionally. A state like SC that has a disproportionate amount of military bases is going to receive far more per capita government funds, though the local SC taxpayers only get marginally more benefit than the rest of the country.

That's not to say you are wrong that rural states get better de facto tax treatment than urban-focused states but it's a bit more intertwined than it sounds.

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

#166

Post by closeparen » Tue, Dec 05, 2017, 9:16 PM UTC

git_rancher wrote: post #98

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 upper middle class is apparently a minority that is politically safe to do economic harm to.

Bingo. Working and middle class say, “fuck you, you’re rich.” Upper class says, “fuck you, only peasants get paid in wages/salary.”

Same with housing. The rich see single family homes as a good investment at any price. The poor see anything other than BMR as not for them. No one wants to house yuppies other than a constituency which is too privileged to have liberal credibility and too poor to leverage policies driven by the rich.

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

#167

Post by munk-a » Tue, Dec 05, 2017, 9:16 PM UTC

harryh wrote: post #155

dragonwriter wrote: post #127

Earlier quoted context omitted.

> There are tax breaks to the middle + lower classes. The net impact is a tax increase on the very poorest in the short term; and on pretty much the whole segment up to a bit above median income over the 10 year period. Yes, there are individual provisions that, taken in isolation, benefit the working class, but in net it's a loss not a gain.

1) If we're also talking about how the cost of health insurance might change then you could be correct about the very poorest. It's a bit hard to say. If we're only talking about taxes paid, then you are wrong there. 2) I think that the whole "over the 10 year period" is a bit of a red herring. The US tax system isn't getting set in concrete with the (potential) passage of this bill. Numerous things will almost certa…

Regarding 2:

This tax law has specifically baked in expirations of some portions. When they come up for renewal the GOP will whine and moan about the unbalanced expenditures and they'll either lapse or be supplemented with additional cuts, the corporate side of these cuts is not subjected to this.

It's fine to say "Oh, things may change down the road" but today they designed a tax cut that will benefit the rich, I do hope we're saved from this ridiculous hand out down the line, but that will be by the actions of other people, these politicians have written the bill as they desire it.

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

#168

Post by jbooth » Tue, Dec 05, 2017, 9:17 PM UTC

munk-a wrote: post #167

harryh wrote: post #155

Earlier quoted context omitted.

1) If we're also talking about how the cost of health insurance might change then you could be correct about the very poorest. It's a bit hard to say. If we're only talking about taxes paid, then you are wrong there. 2) I think that the whole "over the 10 year period" is a bit of a red herring. The US tax system isn't getting set in concrete with the (potential) passage of this bill. Numerous things will almost certa…

Regarding 2: This tax law has specifically baked in expirations of some portions. When they come up for renewal the GOP will whine and moan about the unbalanced expenditures and they'll either lapse or be supplemented with additional cuts, the corporate side of these cuts is not subjected to this. It's fine to say "Oh, things may change down the road" but today they designed a tax cut that will benefit the rich, I do…

Specifically, what will happen is Democrats will have to clean up the mess, and the GOP and their cheerleaders will call the fix 'job killing tax hikes'.

But that's later! Right now it's a red herring to call the mess a mess.

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

#169

Post by creaghpatr » Tue, Dec 05, 2017, 9:18 PM UTC

hcknwscommenter wrote: post #156

sergiotapia wrote: post #11

Florida here, I'm going be paying $4000 ish less in taxes. I hope the tax bill lands and is put to practice quick! People who make over $200k aren't getting as big a tax break? I don't feel bad about that.

"People who make over $200k aren't getting as big a tax break? I don't feel bad about that." According to the CBO, people who make less than $75k get a tax increase by 2027 (on average). People who make between 75K and 500K get a very small tax deduction on average. Blue state residents get a tax increase almost across the board at >200K<1M. Almost anyone who makes more than a million a year gets a sizeable tax deduc…

>According to the CBO, people who make less than $75k get a tax increase by 2027

Because that's when the cuts expire. Incredibly dishonest framing here.

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

#170

Post by SamReidHughes » Tue, Dec 05, 2017, 9:19 PM UTC

SmellTheGlove wrote: post #113

koolba wrote: post #36

Earlier quoted context omitted.

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.

Rich people or corporations that live in high tax states pay that money, and everybody else that lives there doesn't deserve any credit for who their neighbors are.