Posted on 01/25/2020 1:25:23 PM PST by karpov
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Many people saw their overall taxes go down after the 2017 law was passed. But the law had two main changes making it tougher to live in high-cost, high-tax states, especially compared with lower-taxed options. It essentially curbed how much homeowners can subtract from their federal taxes for paying local property and income taxes, by capping the state and local tax deduction at $10,000. It also lowered the size of mortgages for which new buyers can deduct the interest, to $750,000 from $1 million.
These changes have the biggest impact on a sliver of the population who have high incomes and live in expensive areas. They tend to have white-collar jobs and the ability to pick up and move. Many own their own businesses, work remotely or are nearing retirement.
Critics say the changes have hurt everyone who lives in high-tax states, by taking a bite out of tax revenue. New York Gov. Andrew Cuomo, for example, panned the state and local tax cap last year. “It has redistributed wealth in this nation from Democratic states—we’re also called blue states—to red states,” he said at the time.
The average property tax bill in the U.S. in 2018 was about $3,500, according to Attom Data Solutions, a real-estate data firm. But many residents in New York, New Jersey, Connecticut and California had been deducting well over $10,000 a year. In Westchester County, N.Y., the average property-tax bill was more than $17,000, the highest in the country.
Among the people who are uprooting, many say they had long considered a change. But they saw the tax law as a reason to finally undertake the potentially difficult task of changing their state residency.
“It was another bucket of straw on the back of the camel,” said John Lee, a wealth-management executive
(Excerpt) Read more at wsj.com ...
Spreading the infection
I left the DFW TX area after forty years partly because of the outrageous property taxes and the ever increasing cost of living in the metro area.
““It has redistributed wealth in this nation from Democratic states—we’re also called blue states—to red states,” he said at the time.”
Isn’t Trump clever?
But all he reduced was the Federal deduction. If taxes are too high in those States, it’s nobody’s fault but the voters that vote in people that raise taxes. Red States tend to be more fiscally conservative and don’t need the feds fixing their problems.
It’s interesting that the title says Texas. I tried to read the rest of the article but there is a wall. So I didn’t see where Texas was mentioned. Our very brief stint living there, are property taxes were confiscatory. I don’t hear much of that here, so perhaps it was just our County. We paid more in property tax in Corpus Christi then we did property tax and state income tax combined in California. On a comparable house. On the other hand we’re in Tennessee now and are property taxes are a pittance. As are car registrations. And the state budget is balanced and the roads are great. Blue States could learn a thing or two.
Didn’t Dems say they wanted to raise taxes on the wealthiest? Doesn’t this do it with minimum harm to middle class people?
Property taxes should be flat out abolished and outlawed.
Well, there are pros and cons to any type of taxation.
I think that property taxes are levied everywhere in America, whereas not every state levies income taxes or sales tax. I don’t know how or why property taxes evolved as a key source of tax revenue, but it seems to be universal.
The state gas taxes fluctuate quite a bit from state to state, from what I hear.
Property taxes made more sense when people who payed them were the only ones allowed to vote in bond elections and people on welfare weren’t allowed to vote at all.
What? A democrat admitting that democrat states = high tax states in all cases? Doesn't he know they're supposed to lie about that?
CA taxes were punitive. So if they're paying more they're being economically gang raped.
Ping me when Malibu beachfront land is $1.25/acre again
” If taxes are too high in those States, it’s nobody’s fault but the voters that vote in people that raise taxes.”
Yes, but the voters who supported high taxes in California aren’t the ones being hurt by the Trump-GOP tax law. The ones being hurt are Republicans who have larger mortgage payments and can no longer deduct them from their federal taxes.
To repeat: Trump and the GOP raised taxes on their own supporters - ie Republicans - in California and other high-tax states. That’s one reason the GOP lost House seats in usually Republican districts in those states.
“Didn’t Dems say they wanted to raise taxes on the wealthiest? Doesn’t this do it with minimum harm to middle class people?”
Yes, it raises taxes on upper-middle-class Republicans in places like Southern California. Are you surprised that the GOP lost House seats in Southern California two years ago? A lot of Republicans were angry because the GOP Congress had just punished them with higher federal taxes - The irony is, these same GOP voters oppose California’s high tax, but the national GOP is punishing them for those high state taxes that they oppose.
In this person’s situation, you really need a more detailed review of things.
For example, Texas does not have a state sales tax, whereas California does have sales tax.
California property tax rates are lower than many other places, but that is somewhat offset by high property values in California compared to other states.
Apparently Corpus Christi Texas has high property tax assessments, but then, those people are not paying a state income tax.
How you evaluate the financial impact of all of the combined taxes we all pay varies from person to person.
“Yes, but the voters who supported high taxes in California aren’t the ones being hurt by the Trump-GOP tax law. The ones being hurt are Republicans who have larger mortgage payments and can no longer deduct them from their federal taxes.”
So you are saying that only Republicans in blue states have large mortgages? Why don’t the Democrats there Have large mortgages?
I lived in California for over 20 years. In several dufferent counties where house prices were reasonable. The only place where house prices are ridiculous are in the three huge metropolitan areas. And guess how those areas vote? They are not red counties by any means.
You sound like CNN, if you repeat a falsehood Twice does that make it true?
CORRECTION — Texas does not have a state INCOME tax. I don’t know about sales tax in Texas.
“Texas does not have a state sales tax”
I think you meant income tax.
Umm... no.
Texas has a capped 8.25% sales tax, but does not have an income tax.
Exactly. Sales taxes, not income, are directly borne by all.
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