Even after losing the state and local income tax deduction, taxpayers in New York and other high-tax blue states would still end up ahead under the Republican tax reform bill, analysts say.
But that message is having a tough time breaking through the din in Washington.
Democrats have seized on the state and local tax deduction, or SALT, as their chief argument against the tax code overhaul, warning of an electoral backlash from middle-class suburbanites against Republicans if the plan is approved.
There is one problem: SALT is not a middle-class tax break. The benefit of the write-off goes overwhelmingly to high-income earners in high-tax blue states, several economists said.
“SALT is a classic tax preference for the rich that Democrats should be opposing,” said Brian Riedl, an economist at the conservative-leaning Manhattan Institute who has been studying the tax reform plans.
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5 comments:
The history behind the tax deduction of state and local taxes began with State Rights and the theory of taxing twice. On the earned dollar of income the State and local jurisdictional receive tax income. The Federal Government should not tax that same dollar of earned income again, thus the reduction (deduction) of your earned taxable income by the dollar amount that you pay State and local taxes. With the deduction of those taxes from your the Federal Tax liability, the Federal government is not taxing the same earned income dollar twice or in many cases three or more times.
It really has nothing to do with how rich or poor you are, Party affiliation, or the highly taxed jurisdictions that you may or may not live in. It is about being charged taxes twice on the dollar of earned income.
The Democrats are pushing the "rich" agenda not what is best for the real middle class in US. $300,000 is not the real middle class.
Democrats opposing because they oppose everything the GOP tries.
However this bill is a total farce. I detest the lies told. No the standard deduction is not going to double. It goes from 21k to 24k. Does Ryan the skunk use common core math to call that a doubling? The individual is lost making the total deduction as I wrote.
This seems to be a bill written to please the swamp. The fat cats and rip off the working middle class.
Charitable deductions are also going away. Ryan seems to hate religion.
RIP is my hope for this travesty and RIP in 2018 my hope for Ryan in DC. Primaried out.
Ryan, that will hurt a lot of Churches and
other Charities by not being able to deduct
what's given.
Maryland residents get killed with this.
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