Clobbered by new tax code, blue states — and pundits — plot their revenge

Marketwatch ^ | 01/03/2018 | Andrea Riquier

[SeekAndFind]

The Republican tax overhaul may not do a great deal to boost overall economic growth — but it’s already having one stimulus effect. Call it the Full Employment Act for Tax Pundits.

Ever since the contours of the plan made clear that residents of high-tax states would take the biggest hits, a cottage industry devoted to strategizing blue-state tax work-arounds has emerged.

As a reminder, Americans for generations have been able to deduct the amounts paid for state and local income tax, as well as property tax, from their federally taxable income. But the new law caps that amount at $10,000, making it far more expensive to live and work in those places — and conceivably hurting local economies and housing markets.

The state governments in California, New York and New Jersey are all mulling legal challenges to the federal law. But they’re also eagerly hunting for ways to revamp their own tax systems to cushion the blow to their residents.

And they’re in luck. From Medium posts to academic papers, from Twitter chats to economic think tanks, tax strategery is proliferating.

As New York Gov. Andrew Cuomo put it just before Christmas, announcing a plan to encourage New Yorkers to prepay 2018 property taxes, “I say this is an economic civil war. Not North and South over the issue of slavery [but] an economic civil war pitting red states against blue states.”

Call your GOP representative and tell them: Vote NO on this tax monstrosity. #GOPTaxScam pic.twitter.com/dHvgx8QWCh— Jerry Brown (@JerryBrownGov) December 18, 2017

[Seaplaner]

From the piece...

• Payroll-tax shift: Alternately, states could make employers, not employees, responsible for remitting taxes on income.

The sound you hear is the massive roar of thousands of moving vans revving up to get tax-paying people and businesses out of these bleau-yuk states.

[Lurkinanloomin]

Exactly right, housing costs in those localities are completely out of whack.

[JimRed]

But New Jersey’s Leonard Lance was particularly vocal among blue-state Republican House members in arguing that state and local taxes should have remained fully deductible, noting that reducing that deductibility meant the tax overhaul was picking winner and loser states, curtailing federalism by interfering in local decisions about levels of public-service provision, and effectively double taxing residents’ income.

Translation: Big spender states and municipalities should be subsidized by the frugal low-spending states and municipalities. Hey, you make your choices, and you PAY for your choices! I do not want to pay for your choices!

[JimRed]

Exactly right, housing costs in those localities are completely out of whack.

There are buyers willing to pay those prices, or they would be reduced, or there would be no sales.

[Hojczyk]

I left New York State in 1980...my property taxes were more than my mortgage..

Live in Colorado Springs from 1980 to 20000

Housing tax 600 bucks and 650 when i left..

Californians ruined the state

[Honest Nigerian]

The old law “favored” one group. The new law “favors” a different group.
And someone says this is “unconstitutional”? How?

This stuff happens far too often. It is a quirk of politics and the legislative process.

[MGunny]

Once again the left wing Market Watch has to stir up nonsense.

[left that other site]

LOL!

[left that other site]

From a Beatles Movie, “Yellow Submarine”.

[Mears]

Thank you.

.

[LYDIAONTARIO]

In the 1970s, Colorado Springs was paradise! Pickups had gun racks, crime was low, and weather was perfect!

[JimRed]

Californians ruined the state

They flee to other states, then proceed to Californicate them!

[dennisw]

lulz..... Thankfully I don’t live in a NY or California with a crazy high state income tax. New Hampshire has no sales tax or income tax. The difference is made up via higher property taxes, though the state is run lean anyway.

Thus New Hampshire taxpayers have been subsidizing NY and California taxpayers. Other states too. Some states have lower income taxes so at least there is some sanity.

[gogeo]

State-run charity: The new law puts a cap on state and local income-tax deductions — but not charitable donations.

I believe a characteristic of DONATIONS is that they are voluntary. That would be quite a change.

[SunkenCiv]

Thanks SeekAndFind.

As New York Gov. Andrew Cuomo put it just before Christmas, announcing a plan to encourage New Yorkers to prepay 2018 property taxes, “I say this is an economic civil war. Not North and South over the issue of slavery [but] an economic civil war pitting red states against blue states.”

[johnthebaptistmoore]

Whatever will lead to long-term conservatism, I’m for it! BLUE STATES to RED STATES=AWESOME MAGA!