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Thu Dec 19, 2019, 06:29 PM

House narrowly passes bill that would restore SALT tax benefits to higher-income Americans

Source: Washington Post

House Democrats approved legislation on Thursday to repeal part of the 2017 Republican tax law ó but the effort may show just how difficult it will be to undo President Trumpís landmark legislation.

Democrats only narrowly approved the bill, which would restore a tax break that had been sharply restricted by the 2017 Republican tax law. The bill, which passed 218-206, would allow Americans to offset more state and local payments from their income taxes.

The bill is expected to amount to little more than a messaging exercise, however. Senate Republicans have signaled they wonít bring it to a vote, and the White House has also expressed opposition.

The 2017 tax law has continued to vex Democrats, who have said it primarily helps wealthy Americans and corporations. But analysts and tax experts say the bill House Democrats advanced on Thursday would primarily benefit affluent Americans. Thatís because it would repeal a cap on state and local tax (SALT) deductions, a change that would benefit people with large tax bills.

Read more: https://www.washingtonpost.com/business/2019/12/19/house-narrowly-passes-bill-that-would-restore-salt-tax-benefits-higher-income-americans/?outputType=amp

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Reply House narrowly passes bill that would restore SALT tax benefits to higher-income Americans (Original post)
Jose Garcia Dec 2019 OP
4139 Dec 2019 #1
SWBTATTReg Dec 2019 #2
The Mouth Dec 2019 #3
ripcord Dec 2019 #4
Zorro Dec 2019 #5
ripcord Dec 2019 #8
Zorro Dec 2019 #10
MosheFeingold Dec 2019 #16
The Mouth Dec 2019 #17
aggiesal Dec 2019 #6
dhol82 Dec 2019 #7
PSPS Dec 2019 #9
progree Dec 2019 #12
PSPS Dec 2019 #13
progree Dec 2019 #14
yaesu Dec 2019 #11
IronLionZion Dec 2019 #15

Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 06:48 PM

1. World turned upside down. We Democrats trying to cut taxes on the affording and

and republicans trying to keep the taxes

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Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 06:51 PM

2. I'd say that this deduction would help those living in high tax states, w/ high tax bills, e.g.,

farmers w/ high tax bills because of the size of their farms/ranches/livestock/etc., those families whose only significant tax write offs are the SALT amounts, etc. Not just the very affluent. Those too, who happen to fall into the cracks.

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Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 06:52 PM

3. If you live in California

losing that deduction really hurt.

The plain fact is that most of the people I know make more money than they would elsewhere, but pay more to live here than they would elsewhere.

In some parts of the country, a $120K household living in a $700K house would be rich. Not in a lot of this state; the NUMBERS may be higher, but it balances out- more pay, more mortgage).

I can see someone in other places making the mistaken assumption that the above described household is 'rich', or 'upper middle class', but they would be wrong.

The Trump tax cuts were brilliantly designed to really hurt people in blue states; lose that SALT deduction and all of a sudden the higher tax<->higher social benefits equation starts to suck much more, putting much more pressure on the statehouse.

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Response to The Mouth (Reply #3)

Thu Dec 19, 2019, 07:06 PM

4. The feds shouldn't be making up for high state and local taxes

States are welcome to charge whatever tax rate they like but they shouldn't expect the federal government to pick up part of that expense.

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Response to ripcord (Reply #4)

Thu Dec 19, 2019, 07:20 PM

5. It's a double taxation issue for California

You're essentially paying federal taxes on the difference between state taxes/mortgage interest and the limited $10k federal deduction.

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Response to Zorro (Reply #5)

Thu Dec 19, 2019, 07:53 PM

8. No it isn't

The IRS doesn't tax you on SALT they have just reduced the cap on the amount you can deduct.

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Response to ripcord (Reply #8)

Thu Dec 19, 2019, 08:29 PM

10. You apparently didn't understand my post

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Response to The Mouth (Reply #3)

Fri Dec 20, 2019, 03:19 PM

16. It's a muxh harder issue than one would think

And it's not (or shouldn't be) a partisan issue. Some of the concerns:

1. Giving people a federal tax break for state taxes is effectively a transfer of wealth from the poorer states to the richer states

2. Anyone hit by this is wealthy, whether they think they are or not

I also think it is anti-Democratic to give a tax break to higher-income people, regardless of where they live.

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Response to MosheFeingold (Reply #16)

Fri Dec 20, 2019, 03:22 PM

17. "2. Anyone hit by this is wealthy, whether they think they are or not

Utterly wrong.

Also, these are often the states that PAY a lot more in federal taxes than they get in federal services and benefits.

You really don't have the slightest idea of what you are speaking of.

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Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 07:26 PM

6. SALT would help Middle Class Americans ...

that live in high priced areas in this country.

I live in San Diego County, where the median home price is $635,400
1.5% property tax on $635,400 is $9,531/Yr.
Currently we'd only be able to write off only $469 in State Income tax to reach our limit of $10,000.

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Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 07:39 PM

7. This would definitely be a benefit to home owners in New York State.

We have some heavy school and real estate taxes that pay for so much. To cap the amount has made property difficult to maintain.
The trump tax plan was devastating here.

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Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 08:14 PM

9. Bad headline & story. Should be "restore benefits to Americans in high-tax states."

Example: Washington State is one of only a couple of states with no income tax at all. Instead, everything is financed through a sales tax (Boeing planes are exempt, of course.) As such, it is the most regressive form of taxation there is. Being able to deduct a portion of the sales taxes paid helped almost everyone in such a scenario.

In other states where there is usually a mix of both sales and income taxes, the effect is almost the same although the presence of the state income tax, which is graduated, dilutes the effect depending on the rate. Oregon, for example, has no sales tax and only a graduated income tax.

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Response to PSPS (Reply #9)

Thu Dec 19, 2019, 10:35 PM

12. Property taxes? That's part of the SALT deduction that is being capped.

Property taxes are a very regressive tax in that inarguably in the case of renters, its the renters who pay. And of course the homeowners. Otherwise I agree with u entirely.

Admittedly I speak from a Minnesota perspective that supposedly is a low property-tax state. Bullshit. And like I say, in a market economy, its ultimately the renters who pay in the case of rental property. Property taxes is a cost of business, like all other costs of business, are passed on to the renters or customers. That's the reality of the situation.

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Response to progree (Reply #12)

Thu Dec 19, 2019, 11:47 PM

13. Property tax is its own line item and not part of the SALT category

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Response to PSPS (Reply #13)

Fri Dec 20, 2019, 12:54 PM

14. Nope, see Schedule A again - lines 5a through 5e. Property taxes are included in the $10,000 cap.

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Response to Jose Garcia (Original post)

Thu Dec 19, 2019, 09:14 PM

11. Those living in states with high property tax would see some relief but its going nowhere, just

like the impeachment. Nothing good will happen as long as fascists control 2/3rd of ameriKa. For me, I'm more concerned with the poor losing food stamps.

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Response to Jose Garcia (Original post)

Fri Dec 20, 2019, 03:03 PM

15. Blue states and cities often have higher state and local taxes

that's why this is one of those times where Dems support a deduction more than GOP.

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