Anonymous wrote:

Anonymous wrote:Latest is $40k per household for earners under $500k.

This benefits low earners who inherited houses with high taxes and old people in big houses with high taxes. Both groups are fine.

Anonymous wrote:Latest is $40k per household for earners under $500k.

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Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

Not PP, but disagree with this statement. How are states w/higher state income tax, subsidizing those with lower state income tax ? It’s not like the high tax states are sending part of their state budget to the Feds to spend for the benefit of all. Sure, you can say they have higher per capita income, so what, they pay more federal income tax as they should, but has nothing to with the state taxes. They would pay the same Federal tax if they lived in low tax states.

The reality is that states with higher tax rates have chosen to provide more services and better paid civil servants, compared to that of low tax states. They may also be inefficient in providing those services. The SALT deduction is a way to hide this from their citizens. I say let them pay the full freight. And if they don’t like it, move or complain at the voter box.

When states with low/no state or local taxes underfund their programs, the federal government steps in. So while we with higher taxes pay for our services with our high taxes up front, we're also paying for those who refuse to fund their local services through their own state taxes with the extra federal support they receive as a result.

Its a weak argument with no specifics. And it’s impossible to untangle from the argument that some states are less efficient than others, so why should the entire country subsidize those inefficient states with high state income taxes by giving a Federal deduction for their citizens ? Makes no sense.

Every state is in control of its own budget. They decide every year what services to provide and at what level, and what the tax rate will be to support that spending. It has nothing to do with what some other state has decided to spend on its service level.

Citizens of NY,NJ,CA,MD,VA have tacitly voted for their current tax rate and services, based on who is in state office. Let them pay for what they voted for. A federal deduction is unrelated to that decision making.

Here’s some specifics. Mississippi get 79.6% of its Medicaid program paid for by the federal government. High income states like CA, MD, CT, NY and NJ get only 50% covered. Medicaid is one of the biggest budget items for states and the fact that the federal government pays way more of the share for red states than blue states is a big part of the reason blue states need to have higher state taxes.

So what? None of this is relevant to why high-income residents of high tax states should get a very specific kind of tax break that is not available to high income residents of low tax states, or to low-middle income taxpayers in any state.

Because you aren’t being double taxed.

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Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

Not PP, but disagree with this statement. How are states w/higher state income tax, subsidizing those with lower state income tax ? It’s not like the high tax states are sending part of their state budget to the Feds to spend for the benefit of all. Sure, you can say they have higher per capita income, so what, they pay more federal income tax as they should, but has nothing to with the state taxes. They would pay the same Federal tax if they lived in low tax states.

The reality is that states with higher tax rates have chosen to provide more services and better paid civil servants, compared to that of low tax states. They may also be inefficient in providing those services. The SALT deduction is a way to hide this from their citizens. I say let them pay the full freight. And if they don’t like it, move or complain at the voter box.

When states with low/no state or local taxes underfund their programs, the federal government steps in. So while we with higher taxes pay for our services with our high taxes up front, we're also paying for those who refuse to fund their local services through their own state taxes with the extra federal support they receive as a result.

Its a weak argument with no specifics. And it’s impossible to untangle from the argument that some states are less efficient than others, so why should the entire country subsidize those inefficient states with high state income taxes by giving a Federal deduction for their citizens ? Makes no sense.

Every state is in control of its own budget. They decide every year what services to provide and at what level, and what the tax rate will be to support that spending. It has nothing to do with what some other state has decided to spend on its service level.

Citizens of NY,NJ,CA,MD,VA have tacitly voted for their current tax rate and services, based on who is in state office. Let them pay for what they voted for. A federal deduction is unrelated to that decision making.

Here’s some specifics. Mississippi get 79.6% of its Medicaid program paid for by the federal government. High income states like CA, MD, CT, NY and NJ get only 50% covered. Medicaid is one of the biggest budget items for states and the fact that the federal government pays way more of the share for red states than blue states is a big part of the reason blue states need to have higher state taxes.

So what, these are federal programs, higher earners in red states pay the same federal taxes as those in blue states.

And again, blue state voters voted for their state budgets and state taxes based who is in office. They didn’t go to poles thinking I am going vote Democrat (year after year) b/c I am getting a SALT deduction on my federal return to offset the higher state taxes. You want big state programs, lavish pensions, etc, you pay for it at the state level, without a federal subsidy on your federal return.

Let me guess, you are Trump voter from a red state? I vote at my local school, not local strip club. Lol.

I am in Fairfax Cty, and would be better off with SALT. My property taxes increase every year and will hit 14K this year. My state income tax is about 35K.

I notice you don’t address the substance of the argument b/c can’t. Instead, some stupid reference to strip clubs.

What’s really stupid is spelling polls (where you vote) “poles.” You are barely literate.

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

Not PP, but disagree with this statement. How are states w/higher state income tax, subsidizing those with lower state income tax ? It’s not like the high tax states are sending part of their state budget to the Feds to spend for the benefit of all. Sure, you can say they have higher per capita income, so what, they pay more federal income tax as they should, but has nothing to with the state taxes. They would pay the same Federal tax if they lived in low tax states.

The reality is that states with higher tax rates have chosen to provide more services and better paid civil servants, compared to that of low tax states. They may also be inefficient in providing those services. The SALT deduction is a way to hide this from their citizens. I say let them pay the full freight. And if they don’t like it, move or complain at the voter box.

When states with low/no state or local taxes underfund their programs, the federal government steps in. So while we with higher taxes pay for our services with our high taxes up front, we're also paying for those who refuse to fund their local services through their own state taxes with the extra federal support they receive as a result.

Its a weak argument with no specifics. And it’s impossible to untangle from the argument that some states are less efficient than others, so why should the entire country subsidize those inefficient states with high state income taxes by giving a Federal deduction for their citizens ? Makes no sense.

Every state is in control of its own budget. They decide every year what services to provide and at what level, and what the tax rate will be to support that spending. It has nothing to do with what some other state has decided to spend on its service level.

Citizens of NY,NJ,CA,MD,VA have tacitly voted for their current tax rate and services, based on who is in state office. Let them pay for what they voted for. A federal deduction is unrelated to that decision making.

Here’s some specifics. Mississippi get 79.6% of its Medicaid program paid for by the federal government. High income states like CA, MD, CT, NY and NJ get only 50% covered. Medicaid is one of the biggest budget items for states and the fact that the federal government pays way more of the share for red states than blue states is a big part of the reason blue states need to have higher state taxes.

So what? None of this is relevant to why high-income residents of high tax states should get a very specific kind of tax break that is not available to high income residents of low tax states, or to low-middle income taxpayers in any state.

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

Not PP, but disagree with this statement. How are states w/higher state income tax, subsidizing those with lower state income tax ? It’s not like the high tax states are sending part of their state budget to the Feds to spend for the benefit of all. Sure, you can say they have higher per capita income, so what, they pay more federal income tax as they should, but has nothing to with the state taxes. They would pay the same Federal tax if they lived in low tax states.

The reality is that states with higher tax rates have chosen to provide more services and better paid civil servants, compared to that of low tax states. They may also be inefficient in providing those services. The SALT deduction is a way to hide this from their citizens. I say let them pay the full freight. And if they don’t like it, move or complain at the voter box.

When states with low/no state or local taxes underfund their programs, the federal government steps in. So while we with higher taxes pay for our services with our high taxes up front, we're also paying for those who refuse to fund their local services through their own state taxes with the extra federal support they receive as a result.

Its a weak argument with no specifics. And it’s impossible to untangle from the argument that some states are less efficient than others, so why should the entire country subsidize those inefficient states with high state income taxes by giving a Federal deduction for their citizens ? Makes no sense.

Every state is in control of its own budget. They decide every year what services to provide and at what level, and what the tax rate will be to support that spending. It has nothing to do with what some other state has decided to spend on its service level.

Citizens of NY,NJ,CA,MD,VA have tacitly voted for their current tax rate and services, based on who is in state office. Let them pay for what they voted for. A federal deduction is unrelated to that decision making.

Here’s some specifics. Mississippi get 79.6% of its Medicaid program paid for by the federal government. High income states like CA, MD, CT, NY and NJ get only 50% covered. Medicaid is one of the biggest budget items for states and the fact that the federal government pays way more of the share for red states than blue states is a big part of the reason blue states need to have higher state taxes.

So what, these are federal programs, higher earners in red states pay the same federal taxes as those in blue states.

And again, blue state voters voted for their state budgets and state taxes based who is in office. They didn’t go to poles thinking I am going vote Democrat (year after year) b/c I am getting a SALT deduction on my federal return to offset the higher state taxes. You want big state programs, lavish pensions, etc, you pay for it at the state level, without a federal subsidy on your federal return.

Let me guess, you are Trump voter from a red state? I vote at my local school, not local strip club. Lol.

I am in Fairfax Cty, and would be better off with SALT. My property taxes increase every year and will hit 14K this year. My state income tax is about 35K.

I notice you don’t address the substance of the argument b/c can’t. Instead, some stupid reference to strip clubs.

Anonymous wrote:

Anonymous wrote:Just remember that when this legislation fails, the 2017 tax cuts expired and SALT will be back in full (along with higher rates, but I digress).

And those higher rates will more than offset the full SALT deduction. But I digress.

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

Not PP, but disagree with this statement. How are states w/higher state income tax, subsidizing those with lower state income tax ? It’s not like the high tax states are sending part of their state budget to the Feds to spend for the benefit of all. Sure, you can say they have higher per capita income, so what, they pay more federal income tax as they should, but has nothing to with the state taxes. They would pay the same Federal tax if they lived in low tax states.

The reality is that states with higher tax rates have chosen to provide more services and better paid civil servants, compared to that of low tax states. They may also be inefficient in providing those services. The SALT deduction is a way to hide this from their citizens. I say let them pay the full freight. And if they don’t like it, move or complain at the voter box.

When states with low/no state or local taxes underfund their programs, the federal government steps in. So while we with higher taxes pay for our services with our high taxes up front, we're also paying for those who refuse to fund their local services through their own state taxes with the extra federal support they receive as a result.

Its a weak argument with no specifics. And it’s impossible to untangle from the argument that some states are less efficient than others, so why should the entire country subsidize those inefficient states with high state income taxes by giving a Federal deduction for their citizens ? Makes no sense.

Every state is in control of its own budget. They decide every year what services to provide and at what level, and what the tax rate will be to support that spending. It has nothing to do with what some other state has decided to spend on its service level.

Citizens of NY,NJ,CA,MD,VA have tacitly voted for their current tax rate and services, based on who is in state office. Let them pay for what they voted for. A federal deduction is unrelated to that decision making.

Here’s some specifics. Mississippi get 79.6% of its Medicaid program paid for by the federal government. High income states like CA, MD, CT, NY and NJ get only 50% covered. Medicaid is one of the biggest budget items for states and the fact that the federal government pays way more of the share for red states than blue states is a big part of the reason blue states need to have higher state taxes.

So what? None of this is relevant to why high-income residents of high tax states should get a very specific kind of tax break that is not available to high income residents of low tax states, or to low-middle income taxpayers in any state.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Isn't he the one who capped them in the first place?

He capped b/c the standard deduction was raised, which is a better deal under current tax law.

The best deal was lowering overall tax rates. Too many people are forgetting this fact. And thank Obama for the Net Investment Income Tax that added a 3.8% tax on investment earnings for incomes over $250K (MFJ). This hits a lot of middle class earners.

Anonymous wrote:

Anonymous wrote:Isn't he the one who capped them in the first place?

He capped b/c the standard deduction was raised, which is a better deal under current tax law.

Anonymous wrote:

Anonymous wrote:You get a huge bloated military, and Medicare.

Exactly.

Limit healthcare for poor people, but pay for the healthcare of old people who drive jags! They “paid in”!

Anonymous wrote:Just remember that when this legislation fails, the 2017 tax cuts expired and SALT will be back in full (along with higher rates, but I digress).

Anonymous wrote:From a few hours ago:

“Tax writers on the House Ways and Means Committee have offered to raise the cap to $30,000 for joint filers making up to $400,000 a year. But suburban Republicans from higher-tax blue states have said that number isn’t going to cut it and are threatening to spike the entire bill if they don’t get the increase they want to see.

Republican members of the SALT Caucus have advocated for a $62,000 cap and $124,000 for couples. GOP leadership reportedly discussed raising the cap to $40,000 for individuals and $80,000 for couples with hard-liners in their conference over the weekend, suggesting those could be the new numbers for a final compromise.”

https://thehill.com/homenews/state-watch/5307949-salt-tax-cap-fight/amp/

The NY/NJ Republican SALT caucus have all the leverage right now. If they don’t vote for this, SALT limit goes away at end of year. Spending gets frozen at 2024 levels via another continuing resolution. 2017 corporate tax cuts are permanent. US debt trajectory looks more stable, borrowing costs for US go down. Win-win-win-win for the vestiges of Northeast Republicans.

“Tax writers on the House Ways and Means Committee have offered to raise the cap to $30,000 for joint filers making up to $400,000 a year. But suburban Republicans from higher-tax blue states have said that number isn’t going to cut it and are threatening to spike the entire bill if they don’t get the increase they want to see.

Republican members of the SALT Caucus have advocated for a $62,000 cap and $124,000 for couples. GOP leadership reportedly discussed raising the cap to $40,000 for individuals and $80,000 for couples with hard-liners in their conference over the weekend, suggesting those could be the new numbers for a final compromise.”