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[quote=Anonymous][quote=Anonymous]Well the amount for me isn’t “nominal”.  You are assuming the delta between the credit the home state provides for out of state taxes paid and the aggregate of the out of state taxes paid isn’t much over $10,000.   You are wrong.  For me, it’s over $100,000.  I am not a law firm partner but a partner in another kind of professional entity. I used a law firm as an example because there are many in the DMV.   My other partners and I take profits and re invest them in our company and employees.  We will have to close offices and lay off some people or have them be “independent contractors” which I hate to do.  Nominal, no. [/quote]

If you’re paying over $100,000 in state income taxes, you’re almost certainly grossing well over $1 million. Assuming a top federal marginal rate of 39.6% and an effective state income tax rate of 10% (a high estimate, but let’s roll with it), the loss of deducting your $100k delta in state income taxes will—ignoring everything else in the bill that will reduce your tax burden—increase your federal taxes by $40,000/year. A serious amount of money to be sure, but if you’re grossing over $1 million, a net tax increase of $40,000 shouldn’t require you to pay off people and change employment status. You may nonetheless choose to do so, but you aren’t forced to do it. You’ll still comfortably be in then 1% of Americans for after tax income.

Assuming everything you are presenting is factual and ignoring the other benefits you’ll receive from the tax bill, there is simply no reason to believe that in your particular case the loss of the SALT deduction is going to materially alter your after-tax situation to the point that you’re forced to do something that you hate.  You’ll choose to do it to make sure that rather than being in the aproimatley top 0.51% of Americans on an after tax income basis you’ll be in the top  0.49% of Americans. [/quote]

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