I take this deduction and I’m fine with that. Nearly everyone who takes it makes over $100k. Now if that’s to offset someone with little income, fine. If I pay more so Joe Moneybags pays less, which may very well be the case, I’m less than thrilled.
FWIW six states (CA NY NJ IL TX PA) claim more than half of this deduction.
Is there a cite for that? Most people paying a mortgage in all but the end of the term Itemize deductions, and I don’t think 100k is much of a requirement for that.
I’d prefer a bit more detail, but this is from the Tax Foundation:
Which I realize I may be misinterpreting. That’s the percent of the benefit, not the percent of the beneficiaries.
What are you looking for a cite for? The 100K figure? The state and local tax deduction is made up of both state income tax, real estate taxes, and other items. From the NY Times:
But see the way that’s written, if a thousand poors each deducts a penny and one Joe Moneybags deducts $100, then most of the benefit is indeed going to the wealthy. But precisely what I wrote is wrong, in that most people who take it are not making a lot of money. I don’t know the exact numbers.
I also benefit greatly from the state deduction, but I can’t make any good ideological case for it. If states want to have high taxes, good for them, but should the rest of the states effectively subsidize them?
I expect that Republicans in CA will make a show of opposing this, but they realize that effectively increasing taxes on Californians will likely bolster Republicans in the state government, where they currently hold so few seats that they have zero political power.
Based on demographics and history, I expect any Republican plan to increase taxes on people who make between about $70k and $200k (the coastal liberals with high wage income), decrease them slightly on people making less than that, and decrease them massively on people making, say, $500k and more.
$100k does put you in about the 73rd percentile, and about 70% of returns take the standard deduction. But since it’s not a clear line (there are people making $25k who itemize), I don’t think my “nearly everyone” is accurate.
I also take this deduction. The case for it is that it represents double taxation from state then fed. Because the tax is paid to the state, an individual never had use of these funds so to pay tax on it again would be taxing the tax.
It’s like, if sales tax is 10%, and an item is $50, you expect to pay $55 (50 1.1), but under this proposal you paid $60.50 which is 1.155.
That’s what I was getting at. Not trying to be snarky, trying to work through the math, and having trouble finding the numbers.
Anybody who itemizes, which the other article says is 30 percent, is probably deducting either state income or sales taxes. So anybody who would have a total itemized deduction + exemptions that is more than double the standard deduction would have in increase in that sub-area of the tax calculation. Which seems like it would be focused in areas of higher salary and cost of living/housing combined with higher state taxes, so over $100 salary makes sense for most of the people who would be paying more.
I’m trying to work through the numbers of people who are middle class-ish who take that deduction, but would still benefit from the new way vs the people who would pay more. But basically I’m just ending up with so many guestimates and fudge factors,I’m realizing I should just give up, grab a beer, and wait for the people paid to sit at desks connected to tax stat databases to do the math for me. 
Yes, the number of tax brackets do not complicate the Code. At all.
If it is a GOP plan, the rich will pay less and the poor and middle class will pay more.
Hardly. I took it when my income was only $60K.
Yeah? But those six states include most of the most populous states, making up well more than a third the USA Pop, so that makes sense. :rolleyes:
Are they going to try to pass this before September 30th of 2017? or is this for next year?
Eliminating the estate tax is the most drastic change that I see, the rest is just adjusting knobs, and there’s not enough detail about how they’ll be set.
I’m not surprised at all that it’s the Trump administration who’s the one to try to eliminate this.
Given the amount of detail in this plan, that’s probably the best we’re going to get at this point.
Given that the estate tax is only like $20B in revenue each year, and that we’re talking about trillions of dollars in increased deficit, I doubt that’s the most drastic change.
In that case my numbers show that my taxes will go down by 15 Billion dollars and Mexico will pay for it.
And now we now who reads the entire thread before posting.
So you agree that these six states benefit disproportionately.
The estate tax provides less than 1% of the federal budget. The point of it is not to collect revenue, but to slow wealth accumulation. It’s a drop in the bucket that can be easily made up with other small increases, but it would represent a large shift in policy if it were dropped.
Trickle-down is gonna work this time, believe me. Bigly!
More voodoo economics.