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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

#211

Post by dragonwriter »

smsm42 wrote: post #183
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…

> 1. What about the property tax deduction? Why are property taxes deductible, but income taxes are not? There's no objective reason why it should be. But since deductions are largely arbitrary policy instruments anyway - because property tax deduction encourages and makes easier home ownership (at least this is the theory) and the government wants more home ownership. State tax deduction does not really have such go…

> State tax deduction does not really have such goal

State tax deduction has an even better goal: avoiding discouraging tax and spending decisions that pay for themselves and provide additional returns before considering federal tax distortions.

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

#212

Post by dragonwriter »

ghouse wrote: post #85
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…

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 ben…

> 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.

Perhaps more to the point, not deducting them mathematically creates structural incentives for inefficient local decisions.

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

#213

Post by smsm42 »

dragonwriter wrote: post #209
smsm42 wrote: post #189

Earlier quoted context omitted.

With the same logic, every expense should be deducted. If I work additional hour to give money to the landlord/clothes store/pub owner, why should I work additional 15 minutes to give money to the feds just because I earned money to give to the landlord/clothes store/pub owner? Because tax is charged on the income, not on money left in your pocket after paying everybody else. That's why it is income tax, not wealth t…

> With the same logic, every expense should be deducted. That's essentially how business taxes work, so why not?

Why income tax is not "free cash" tax? I guess because it's massively easier to tax income than "free cash" and more exceptions you allow more avoidance you get. Most countries don't even have this system of deductions US has - there's just income tax, which usually is paid automatically by wage deduction, and some kind of sales/VAT tax for businesses, and very little opportunity to deduct any personal expenses. US uses deductions as policy tools, so they need a lot of it. But that's in no way the only way possible.

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

#214

Post by notconservative »

closeparen wrote: post #131
notconservative wrote: post #15

Earlier quoted context omitted.

This is what a lot of commenters aren't getting. Complaints about raising my taxes to lower corporate taxes is kinda ironic because 200K+ is rich as far as most of America is concerned.

People don’t live in “most of America,” they live in their specific real estate and job markets. The bill punishes expensive areas indiscriminately, not people who are rich in context.

I'm just saying that that's not how a lot of people see it. Living in an expensive market is not a right.

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

#215

Post by hbarka »

BeetleB wrote: post #154
hbarka wrote: post #53

Earlier quoted context omitted.

Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. And if you know anything about Western society, home ownership creates stable societies—that’s why ownership is encouraged.

>Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. As someone who knows many landlords: Completely wrong. They buy properties with a loan. They pay interest on that loan. The money the renter pays goes towards the interest payments. Renters are essentially buying the properties for the owners. And landlords can keep deducting it, no matter how many properties. Homeowners…

Uhhh, the topic was about taxes. The homeowner demographic is statistically a higher earner than the renter demographic, thus pay more taxes.

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

#216

Post by jonheller »

creaghpatr wrote: post #169
hcknwscommenter wrote: post #156

Earlier quoted context omitted.

"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.

"By 2019, Americans earning less than $30,000 a year would be worse off under the Senate bill, CBO found. By 2021, Americans earning $40,000 or less would be net losers"

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

#217

Post by davidjnelson »

irrational wrote: post #196
davidjnelson wrote: post #58

Earlier quoted context omitted.

You can't buy a decent house in the bay area on 200k.

There are really good jobs (and nice places to live) outside of the bay area.

Could you please list some examples? Butte county and San Diego are nice, but not many tech jobs.

The weather outside California is not great, unless there are places that have warm weather, not too much rain/snow, not too much humidity, no issues with tornadoes, hurricanes, flooding.

Maybe there’s some real gems I don’t know about. Would love to hear of them!

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

#218

Post by Turing_Machine »

AznHisoka wrote: post #101
vkou wrote: post #8

Earlier quoted context omitted.

> I cannot see this bill as anything short of theft. Why do I have to pay double-digit percentage more on my taxes to give the ultra rich a tax cut? In what fucking world does that make any economic sense. My rent isn't tax deductible. Why is yours blessed with such a status (In the form of a mortgage, and property tax deduction)? All that mortgage tax deductions do, economically, is increase the overall price of hom…

Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?!

Renters are already paying all of the property tax. The expenses for any business (including being a landlord) are, in the long term, paid by the customers. Otherwise the business becomes insolvent.

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

#219

Post by notconservative »

davidjnelson wrote: post #99
eridius wrote: post #65

Earlier quoted context omitted.

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

Rich in the bay area is somewhere in the neighborhood of $500k-$1MM/year.

"in the bay area" is not relevant. Living in the bay area is not a right. If the taxes or cost of living is too high, then you can't live in the bay.

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

#220

Post by notconservative »

influx wrote: post #125
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 median home value in Alameda County is $796,600. Median income is $97,000, total comp for software engineers at your company ranges between 100 and 255K/year, so you are already above the median income in that county. According to: https://www.investopedia.com/news/how-much-income-puts-you-t... "The top 5% of households earn an annual income of $214,462 or higher" Most folks in the US, or the world would consider…

Thank you for posting the numbers to back this up.
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