Democrats Consider Tax Cuts for Many High Earners in New York, New Jersey and California

[Celerity]

With tax rates steady and $10,000 deduction cap under attack, some residents of high-tax states might pay less than before 2017

https://www.wsj.com/articles/democrats-salt-tax-cap-high-earners-11635460218

WASHINGTON—High-income coastal professionals look likely to emerge as significant winners from the Democrats’ proposed tax agenda, escaping rate increases and regaining a deduction for state and local taxes that was capped at $10,000 in 2017.

The potential result: Many residents of New York, New Jersey, California and other states who make more than the $400,000 threshold that President Biden set for tax increases could end up with tax cuts atop the tax cuts they got four years ago.

“The combination of keeping the low tax rate and being able to fully deduct state and local taxes gives these families an even bigger benefit than even the 2017 tax writers intended,” said Brian Riedl, a former Senate Republican aide who is a senior fellow at the Manhattan Institute, a conservative think tank.

The details aren’t final yet, and lawmakers still need to vote on this as part of the Biden administration’s broader healthcare, education and climate-change agenda. The break wasn’t in the framework that the president released Thursday, but Democratic lawmakers said they expect changes to the cap to be added before a final vote.

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[PoliticAverse]

1. Removing the cap would cost the treasury about $85 billion/year.

If you don't want it to benefit high income earners, cap it by income instead of tax amount.

Not surprised it wasn't in the "framework". You really don't want to announce you are cutting taxes on the rich.

[uponit7771]

10. THIS !!!! ☝🏾☝🏾☝🏾

[BootinUp]

2. IIRC

The pukes screwed these states previously and so maybe this corrects some of that.

[JustAnotherGen]

3. There is no low tax rate

For a family of four making $120K a year in NJ.

Modest (1500 sq foot) homes often incur property taxes between 8 to 12K annually.
State Income Taxes - Those school teacher/police officer 'professional' couples are getting hosed.
Vice Versa - paying property taxes twice.

The SALT was not capped for more than 100 years - since the IRS/Fed Income tax as we STILL know it today.

December 2017 - to punish blue states and reward RED states for not helping themselves - Fed Gov slapped a cap on what we could deduct.

Our personal STATE income taxes are above the 10K threshold.
Our property taxes are just UNDER 10K. We believe in those property taxes.

What I don't believe in? Paying my property taxes twice. Once in state - and once to make up for the states that have ZERO Personal Income taxes and who take bread off of my table.

And the WSJ has been for this all along - seriously. They are always FOR the millionaires. The million dollar earners got a HUGE tax break in 2017 because they put it on a family of four in Bergen County NJ making $120K a year.

It's enough.

You get rid of one the basic, most core principles of the creation of the IRS and Modern Fed Income Tax - get rid of the whole thing.


This SALT cap issue, and seeing how it has hurt modest home owners, small families - that counted on not having to pay property taxes twice when they signed up for the 30 year mortgage on a $189K ranch home (cheapest you are gonna get around here) - are HURTING.

Minimum - go back to who had a mortgage in 2017. Look at the length of the mortgage.
Let us get grandfathered into the old way.

Granted, no one will ever buy our homes in the future, but at least we can save for its demolition in 20 years.

[MichMan]

4. I dont understand how you are paying property taxes "twice"

Last edited Sat Oct 30, 2021, 01:03 AM - Edit history (1)

You are paying federal income tax on that SALT amount above $10k.

For your example of 120k income, that would be 22% tax rate on that $10k. That is about $42 per week or $6 per day.

[PoliticAverse]

5. The SALT deduction primarily benefits the 1%.

The Treasury has been trying to get the SALT deduction eliminated for years.

From 1984:

The current deduction for State and local taxes disproportionately benefits high-income taxpayers residing in high-tax States. The two-thirds of taxpayers who do not itemize deductions are not entitled to deduct State and local taxes, and even itemizing taxpayers receive relatively little benefit from the deduction unless they reside in high-tax States. Although the deduction for State and local taxes thus benefits a small minority of U.S. taxpayers, the cost of the deduction is borne by all taxpayers in the form of significantly higher marginal tax rates.

Low income earners who pay property taxes and don't itemize get NO benefit from the SALT deduction.

The cost to the Treasury of repealing the SALT cap is about $ 85 billion/year.

> Let us get grandfathered into the old way.

There is no more reason to grandfather people affected by the SALT tax change than there is to grandfather a salaried employee affected by an income tax rate increase.

If you want SALT tax reform that doesn't primarily benefit the rich, cap the deduction by personal income and if you are really concerned about low income earners change the tax code and let them deduct state and local taxes even if they do not itemize.

[uponit7771]

9. Tell middle class worker in Texas or mo that

[MichMan]

6. Will be a huge benefit to the 1%

"Indeed, tax expert Howard Gleckman at the nonpartisan Tax Policy Center wrote in a blog post earlier this year that households earning above $1 million annually would receive half the benefit. Around 93% of those households would get a tax cut averaging $48,000.

In stark contrast, 96% of middle-income households - those earning between $52,000 and $96,000 - would experience zero change in their tax bills."

https://www.msn.com/en-us/news/politics/the-big-tax-break-for-new-yorkers-and-californians-that-trump-wiped-out-in-2017-democrats-are-determined-to-bring-it-back/ar-AAQ7RLu?ocid=msedgdhp&pc=U531

[Kid Berwyn]

7. Trickle down works!

Link to tweet

[uponit7771]

8. Bullshit article, Putin's whores SALT cap hurt MANY middle class workers nation wide. It's a Trump .

... measure that in of itself should say something

[tritsofme]

11. Removing the cap makes no sense, it would primarily benefit the uber-wealthy.

The cap should be raised somewhere above $10k, so that it doesn’t impact the middle class, and then pegged to inflation.