Republican tax plan a blow to Democratic states, officials say - Polidicks

[QUOTE]NEW YORK/CHICAGO (Reuters) - Democratic-leaning states are set to bankroll a big chunk of the tax cuts unveiled in a Republican tax plan on Thursday, as the plan slashes deductions used the most by residents of states that voted against Donald Trump in the 2016 elections. The bill, introduced by the U.S. House of Representatives Committee on Ways and Means on Thursday, took aim at state and local tax deductions as one part of its plan to pay for reductions in taxes elsewhere. Overall, the plan would reduce federal revenues by roughly $1.5 trillion over 10 years. The bill eliminates the most widely-used deduction - income tax - and caps property tax deductions, the second most-used, at $10,000. State and local deductions are used largely by high-tax states that tend to vote Democratic in presidential elections and local officials say the tax bill appeared to divide its benefits and burdens along partisan lines. “I do think this has been developed in a way that looks at who were the prevailing forces in the presidential election and who were not,” Kevin Sullivan, Connecticut’s Commissioner of Revenue Services, told Reuters. Connecticut is one of several high-tax Democratic states where, local officials say, middle-class households will end up paying more taxes under the Republican plan. Among those potentially hardest-hit are California and New York with state income tax rates of 13.3 percent - the nation’s highest - and 8.82 percent respectively, according to a recent report by the Tax Foundation. That group also includes New Jersey, Minnesota and Oregon - all of which have voted for Trump’s Democratic rival Hillary Clinton in the 2016 election. [/QUOTE] [URL="http://www.reuters.com/article/us-usa-tax-states/republican-tax-plan-a-blow-to-democratic-states-officials-say-idUSKBN1D300Q?utm_campaign=trueAnthem%3A+Trending+Content&utm_content=59fc5b7104d3011b7a0774b6&utm_medium=trueAnthem&utm_source=facebook"]Reuters.[/URL] [editline]3rd November 2017[/editline] I should probably also add this part: [QUOTE]To be sure, some Republican legislators from high-tax states, including Representative Lee Zeldin, of New York, have opposed the bill. The legislation would also end a tax exemption for billions of dollars of so-called private activity bonds issued by state and local governments annually to finance affordable housing, non-profit hospitals and colleges, as well as airports and port facilities - a measure that would affect Democrat and Republican states alike.[/QUOTE] Not all Republicans are onboard with this bill, for whatever that's worth.

That's how you do it, punish the states that keep the country afloat.

When you're too stubborn and bullheaded to the point of making the Citizens of your nation suffer just for the gain of power... These aren't Americans...these are parasites...

Being shocked at a republican tax plan kicking blue states in the balls is like being shocked at a cat eating a mouse. Absolute cunts.

If you're going to apply shit like this, apply it to ALL states, not just the ones that inconvenience you, you slag-heap shit-dribbling jizz-rags.

[QUOTE=Zero-Point;52852867]If you're going to apply shit like this, apply it to ALL states, not just the ones that inconvenience you, you slag-heap shit-dribbling jizz-rags.[/QUOTE] It's removing (or decreasing) the federal tax deductions you can take for state taxes. It is being applied equally to every state, it's the states tax rates that make it disproportionally affect blue states, since they tend to have higher taxes. Personally I'm fine with it. If I choose to live in a largely rural state where I have low state and local taxes but fewer public services, I shouldn't have to subsidize people in dense metro areas paying high local taxes but receiving more government services. Example: Alice lives in San Jose, California, makes $80k a year, pays $20k in federal taxes (25%) and $6.4k in local (8%). Bob lives in Idaho, makes $80k a year, and pays the same $20k a year federal tax (25%) but pays $2k (2.5%) local taxes. Alice, by virtue of paying higher local taxes, has better roads, parks, government services, and other public goods than Bob. This seems fair, as Bob pays $4.4k (5.5%) less local taxes. They both pay $20k a year to the federal government and receive the same federal benefits. However, let's introduce the state tax deduction as it currently exists. Alice and Bob both deduct their local taxes. Alice now pays $14.6k ($20k-6.4 in local from the deduction) in federal taxes, and $6.4k in local taxes. Her total tax burden is now $20k. Bob now pays $18k ($20k-2k in local from the deduction) in federal taxes, and $2k in local taxes. His total tax burden is now $20k. Alice and Bob now pay the same amount of total taxes. They receive the same federal benefits, despite Alice paying $14.6k and Bob paying $18k to the federal government. Alice still has better local services than Bob. Bob is, in effect, subsidizing Alice's local taxes and benefits. Additionally, the people who benefit most from these deductions are the wealthy that live in blue states, not low income residents. In fact, it's biggest issue in getting passed seems to be how it will affect wealthy Republicans living in blue states. This honestly seems like a good piece of policy, IMO. [url]https://www.vox.com/platform/amp/policy-and-politics/2017/10/30/16557554/the-state-and-local-tax-deduction-explained[/url] Hopefully this change incentives states to lower their tax rates. Should add I live in California, this will lead to an increase in my total tax burden. However, having grown up in a largely rural state with low local taxes and shit public services, I don't think that people living there with abysmal infrastructure should be subsidizing Californian's tax benefits.

the "fiscally irresponsible states" as one pundit from texas put it, though I'd characterize any state without an income tax as fiscally and morally irresponsible as any regressive tax system burdens the lowest members of society the most

[QUOTE=Sableye;52853005]the "fiscally irresponsible states" as one pundit from texas put it, though I'd characterize any state without an income tax as fiscally and morally irresponsible as any regressive tax system burdens the lowest members of society the most[/QUOTE] Not in this case. See the article I linked above. [QUOTE] The deductions only benefit taxpayers who itemize; low and middle-income people for whom the standard deduction is larger than their combined state/local tax burden, charitable giving, and mortgage interest payments don’t get any help. And given that the standard deduction is $6,350 for singles and $12,700 for couples, you have to pay a lot of taxes or donate a lot to charity or pay a lot of mortgage interest for it to make sense to pass that up. And people who do pay that much in taxes/donations/interest tend to be pretty rich. So, unsurprisingly, the share of people claiming the SALT deduction rises with income, with fewer than 20 percent of households making under $50,000, but more than 90 percent of households making $200,000 or more, claiming it.[/QUOTE]

[QUOTE=Harbie;52853031]Not in this case. See the article I linked above.[/QUOTE] ya but 200,000$ in eastern NY is middle class and again, I was paraphrasing an opinion piece from cnbc that was calling high tax states fiscally irresponsible for having high taxes and praised states that had low taxes like his own texas congress shouldn't be in the business of forcing states to cut their own taxes, the salt just makes sure that states are first in line for tax collection

[QUOTE=Sableye;52853168]ya but 200,000$ in eastern NY is middle class and again, I was paraphrasing an opinion piece from cnbc that was calling high tax states fiscally irresponsible for having high taxes and praised states that had low taxes like his own texas[/QUOTE] I agree with you that that quote about fiscal irresponsibility is dumb, but saying $200,000 is middle class is a gross exageration. [url]http://www.slate.com/blogs/moneybox/2014/08/29/income_distribution_of_new_york_city_what_does_it_take_to_be_rich.html[/url] We can see that you are in the top 6.9% of earners in NYC if you make $200k, far from what I would consider the "vulnerable middle class". Additionally, if cost of living is an issue at $200k, it would probably be prudent to consider moving somewhere with a lower cost of living. And no, SALT doesn't simply "ensure state taxes come first". I outlined above how it penalyzes lower taxed states. Removing it equalizes the benefits received per federal tax dollars paid, as I demonstrated above. I agree, Congress should not be in the business of influencing state taxation policies. This legislation would make it so that wealthier residents of high local taxes states pay the same federal income tax as residents in lower taxed states. Its up to the states affected to decide if they want to raise taxes in order to maintain their current quality of public service or compromise and lower taxes. This is literally the sort of legislation that eleminates taxes advantageous to the rich that people often clamor for.

If this bill wasn't cutting the estate tax they wouldn't need to unequally squeeze states as hard, but the 0.5% at the top are more important.

I kind of doubt this bill was specifically designed to fuck over Democrat states. Odds are, the congressmen in the House are pumping up their own districts and states because that's where they need to pander to get reelected. And since this is a GOP bill, obviously the ones pandering to their own states are Republicans.