Skip to comments.This Is Rich: Democrats Fight To Protect A $1.8 Trillion Tax Break That Benefits The Top 1%
Posted on 10/24/2017 8:43:48 AM PDT by george76
Tax Reform: What do you call a tax break that delivers 88% of the benefits to upper-income families and subsidizes rich states at the expense of poor ones? If you're a Democrat, you call it a sacred cow.
One provision of the Republican's tax-cutting plan that has drawn intense opposition from Democrats is the elimination of state and local tax deductions for those who itemize.
Fewer than 22% of tax filers even claim the state and local tax deduction, and the vast majority of these are higher-income families. While 78% of those with incomes above $200,000 claim the deduction, just 7% of those making between $30,000 and $40,000 do. For most taxpayers, the standard deduction is more valuable.
Those earning more than $200,000, the SALT deduction cuts their federal tax bill by an average $6,295. For those with incomes of between $100,000 and $200,000, it's just $857. Those earning from $30,000 to $40,000 get an average of $93 off their federal tax bill.
The benefits of the SALT deduction are heavily skewed toward wealthy high-tax states, for the simple reason that the more someone pays in state and local taxes, the more they can deduct from federal income taxes.
In fact, just seven states California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York account for more than half the deduction's cost, according to the Heritage Foundation. California alone is responsible for almost 20%.
In effect, then, the SALT tax break has turned into a massive federal subsidy of profligate liberal states, paid for by fiscally conservative states.
That's why Democrats are so determined to keep it. Not because they care about working class families, but because they don't want to see their rich friends who live in deep-blue states get hurt.
(Excerpt) Read more at investors.com ...
Tough luck if taxpayers in high state/local tax states live too high on the hog. The rest of us should not subsidize their profligacy.
It helps to offset some of the egregiously high taxes in typical liberal enclaves such as California, New York and Massachusetts. OF COURSE it’s a sacred cow!
State and local income and property tax deductions make up a good percentage of my deductions. And I'm far from high income. And I'm not in a high tax state like California or New York.
While 78% of those with incomes above $200,000 claim the deduction, just 7% of those making between $30,000 and $40,000 do.
I would point out that few families in the $30K to $40K income range itemize at all.
[Tough luck if taxpayers in high state/local tax states live too high on the hog.]
Many conservative, hard-working citizens eek out a living in those states.
Tired of New York, New Jersey, Illinois, California et al. subsidizing their nanny state budgets on my back. Nuke it!
A lot of House districts controlled by Republicans are wealthy enclaves in high-tax states. There are enough of these blue-state House Republicans to kill this proposal, and they likely would do so out of desire to get re-elected.
“California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York”
These states have 34 Republican representatives in Congress, out of a total of 248.
The Democrats always say one thing and do the exact opposite - always have, always will. It is their very method of governance. They are the exact opposite of what they portray themselves as...they are a party of the very rich and very connected.
Some conservatives collect very large salaries indeed in these states. There aren’t many jobs in in the red states that pay $500K or more.
Exactly. The stats are BS on this one. I’m sure as heck am not in those categories and I itemize. Smells like BS to me.
Out of desire to not get strung up and slowly skinned alive, which is OK by me for anyone who supports it. Despite what the article says, I am far from wealthy and deduct state and local taxes.
If this is the Hill the Rats want to die on, the Republicans should just add a line to the Tax Legislation allowing the State Tax Deduction for Taxpayers making $100,000 or less.
I am not endorsing any of this silliness since I believe the only fair Tax is a Flat Tax (which will never happen), but here we are.
Don’t those states pay out more in federal taxes than they get back?
Data and facts can be skewed in many ways.
South Carolina is the #1 recipient of the deduction per capita.
But, hey, let’s go with the class warfare! Free Republic can become Social Justice Warrior Central!
“The rest of us should not subsidize their profligacy.”
Texas is #3 in benefiting from these deductions, on a net basis.
South Carolina is the #1 beneficiary per capita.
Additionally, BOTH of those states receive more in Federal Spending than they pay in Federal Taxes. For South Carolina it’s 14 x. For Texas...near 1.5 x.
CA gets .78 for every dollar sent to DC.
Just who subsidizes whom?
A lot of data can make you smart. Just a little data can make you dumb.
“Fewer than 22% of tax filers even claim the state and local tax deduction, and the vast majority of these are higher-income families.”
Heritage is teaming up with the GOP Congress to screw the Middle Class.
The above 22% of tax filers...is substantial considering only 47% actually PAY in Federal Income tax at all.
So, nearly HALF of all people who actually PAY income taxes, itemize and take the SALT deductions. They come from every state in the union.
And elimination of those deductions will be a net tax increase on them absent other reductions.
Considering that Republican believe they have to “pay” for a corporate tax reduction, a lower middle class tax reduction and a lower class “reduction” through an increased EITC, SOMEBODY has to pay more.
The Republicans have chosen those who make between $80k and $160k to pay that bill. All in that range WILL see a net tax increase.
And you can take that to the bank.
And most folks here on Free Republic not only are OK with it, they salivate for it. They want to stick it to those “rich people”.
Those states SUBSIDIZE your freeloading state when it comes to net taxes paid.
Hating DEMOCRATS is a right!
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