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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

#221

Post by notconservative »

ghouse wrote: post #67
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:…

> 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...

OP is talking about comparing families specifically. This talking point doesn't mean anything on the level of a single taxpayer.

You could argue that the family in Texas is getting more services for their tax dollar. But, that is almost certainly false, because people who actually make enough to pay taxes don't tend to consume the kind of services that cost tons of money (aka. social services).

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

#222

Post by tomp »

refurb wrote: post #197
SmellTheGlove wrote: post #83

Earlier quoted context omitted.

> 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?

People making more than $200,000 per year will pay more taxes. How is it not a tax increase on the rich?

The "rich" don't earn a salary.

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

#223

Post by vostok »

smsm42 wrote: post #210
vostok wrote: post #206

Earlier quoted context omitted.

> The difference here is that with property-related taxes there is a policy goal linked to it, and also long-term choice individuals make based on this policy, which would make them very upset if the policy changes. Wouldn't you agree that choosing to live in particular state is just as much of a long term decision as choosing to live in a particular house?

Yes, but how much state tax deduction figures in that choice? I wouldn't say it's a lot. Presence and absence of state income tax - maybe, but presence of deduction - not very likely. And of course, if the state wanted to compete on that metric, they could easily lower the taxes, but I haven't seen many high-tax ones to be willing to.

Of course it's a significant factor. You're talking about a pretty large portion of a household's budget.

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

#224

Post by irrational »

davidjnelson wrote: post #217
irrational wrote: post #196

Earlier quoted context omitted.

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!

Yeah, it does depend on what you consider a nice place to live. I dislike the sun and heat, so anyplace that is predominantly cool and cloudy I would consider nice ;-)

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

#225

Post by bas »

AFNobody wrote: post #175
creaghpatr wrote: post #165

Earlier quoted context omitted.

>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 amoun…

> local SC taxpayers only get marginally more benefit than the rest of the country. I wouldn't agree its marginally more benefit. Those bases being shut down would crush SC's economy within 50 miles of every base. Economically, they enjoy 100% of the benefit and pay less than 5% of the costs. The US is not, in any real sense, threatened militarily that I benefit from a large defense budget. Similar is true of food an…

And we haven't even discussed defense spending from an efficiency/ROI perspective.

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

#226

Post by closeparen »

notconservative wrote: post #214
closeparen wrote: post #131

Earlier quoted context omitted.

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.

None of food, shelter, water, or healthcare are rights anywhere in America. Policy is still supposed to promote the general welfare.

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

#227

Post by notconservative »

closeparen wrote: post #226
notconservative wrote: post #214

Earlier quoted context omitted.

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

None of food, shelter, water, or healthcare are rights anywhere in America. Policy is still supposed to promote the general welfare.

You're right that there are parts of this bill not to like, the estate tax stuff for sure and possibly the pass-through rate as well. But, where we disagree are the parts that "punishes expensive areas indiscriminately". Removing the SALT and mortgage deductions are good IMO.

A commenter in another thread posed a hypothetical about a family in CA vs. TX making $250k. Why should the one in CA get a big writeoff because CA has high taxes?

Of course, a state is free to tax it's citizens as much as it likes. But, that tax should not be deductible from state taxes, because it leaves families in other states to shoulder the burden.

Meanwhile, the mortgage interest deduction subsidizes people who can afford houses (in fact it incentivizes buying larger houses, which is also bad IMO). These are not the people who should be getting tax breaks.

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

#228

Post by tzs »

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…

Businesses generally get to deduct interest on loans used for the business, so landlords would probably be able to deduct mortgage interest under that even if there was no specific mortgage deduction in the tax code.

Accordingly, I'm not sure it makes sense to discuss landlords when discussing the mortgage interest deduction.

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

#229

Post by eridius »

notconservative wrote: post #219
davidjnelson wrote: post #99

Earlier quoted context omitted.

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.

Wealth is relative. "In the bay area" is absolutely relevant. Companies in SF pay so much because the cost of living is so high. Someone with $20 is not richer than someone with $10 if it costs the first person $15 to buy lunch and it costs the second person $2 to buy the equivalent lunch.

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

#230

Post by notconservative »

eridius wrote: post #229
notconservative wrote: post #219

Earlier quoted context omitted.

"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.

Wealth is relative. "In the bay area" is absolutely relevant. Companies in SF pay so much because the cost of living is so high. Someone with $20 is not richer than someone with $10 if it costs the first person $15 to buy lunch and it costs the second person $2 to buy the equivalent lunch.

I realize that cost of living has an impact on wealth.

But, we're talking about taxes and mostly about a couple specific provisions: SALT deduction, mortgage interest deduction, and the higher-end tax rate. Relative wealth is definitely not relevant to the SALT and mortgage interest deductions. (To review, the mortgage interest deduction subsidizes the rich and the SALT deduction forces people in low tax states to subsidize people in high tax states)

The only one left is tax brackets. You could argue that tax brackets should take into account cost of living. So, if you earn 100k in Nebraska you'd pay a higher percentage of that than a similar person living in SF. But, I think that doesn't take into account the fact that SF is such an in-demand place to live. You don't have to live in SF. Basically, I'm not convinced that cost of living differences should play a role in taxes.

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