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I'm a highish earning single homeowner in Alameda County (Bay Area) -- between the Mortgage Interest deduction, the Property Tax deduction, and the State Income

I'm a highish earning single homeowner in Alameda County (Bay Area) -- between the Mortgage Interest deduction, the Property Tax deduction, and the State Income Tax deduction being slated for removal, my taxable income is about to go up something like $60k, which is a large chunk of my actual income. This tax bill utterly fucks me, to the point I'm considering selling my house to get ahead of the inevitable housing crash. I cannot see this bill as anything short of theft. Why do I have to pay double-digit percentage more on my taxes to give the ultra rich a tax cut? In what fucking world does that make any economic sense.

vkou 9y ago
> I cannot see this bill as anything short of theft. Why do I have to pay double-digit percentage more on my taxes to give the ultra rich a tax cut? In what fucking world does that make any economic sense. My rent isn't tax deductible. Why is yours blessed with such a status (In the form of a mortgage, and property tax deduction)? All that mortgage tax deductions do, economically, is increase the overall price of homes, and have non-homeowners subsidize home-owners.
- mattchristen 9y ago
  Because the person that owns the property you rent is receiving those benefits.
- mmanfrin 9y ago
  Mortgage interest and property taxes are costs on top of the actual cost of the house. My mortgage itself isn't tax deductible.
  - refurb 9y ago
    It's still a concession to homeowners that renters don't get. We want taxes to be fair, no?
    - rootusrootus 9y ago
      Not really. Trying to make taxes fit some arbitrary definition of fair is most of the problem. We should be looking at macro effects on our whole economy when making decisions on taxes.
- froindt 9y ago
  FWIW, only the interest is deductible, not the entire payment. I agree with the sentiment though. The realtors have arguably the most effective lobbying efforts, and to be able to tie their industry in with the "American Dream" has been very effective. I was out in DC earlier this year speaking with my congressional representatives about some changes to the bankruptcy code. We were working with a lobbyist who said something along the lines of "everybody knows when the realtors are in town. Nobody tries to get meetings that week because they have such a great mobilization effort, everyone gets booked up."
- gizmo 9y ago
  The rationale is to encourage home ownership, because that gives people an incentive to care about upkeep and the community. It's hard to create good neighborhoods with renters who can just pack up and leave.
- hbarka 9y ago
  Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. And if you know anything about Western society, home ownership creates stable societies—that’s why ownership is encouraged.
  - BeetleB 9y ago
    >Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. As someone who knows many landlords: Completely wrong. They buy properties with a loan. They pay interest on that loan. The money the renter pays goes towards the interest payments. Renters are essentially buying the properties for the owners. And landlords can keep deducting it, no matter how many properties. Homeowners can deduct only for two houses. And renters deduct none of it. The landlords literally deduct what their tenants are paying (interest, which is part of their rent). And not sure about your other comment, but rarely do renters of similar size houses/apartments pay less than homeowners. As an example, my house I bought only a few years ago: I pay just a little more than some 3 bedroom apartments (which are much smaller than my house). Most 3 bedroom apartments in desirable areas in my city pay more in rent than my monthly payment. And then with all the deductions I was getting, I was effectively paying less than most 2 bedroom apartments, and some single bedroom apartments. And if I take into account the amount going towards the principle, I'm paying about the same as most single bedroom apartments in my area. I did not put in a huge down payment. Less than 20%, in fact.
    - hbarka 9y ago
      Uhhh, the topic was about taxes. The homeowner demographic is statistically a higher earner than the renter demographic, thus pay more taxes.
    - tzs 9y ago
      Businesses generally get to deduct interest on loans used for the business, so landlords would probably be able to deduct mortgage interest under that even if there was no specific mortgage deduction in the tax code. Accordingly, I'm not sure it makes sense to discuss landlords when discussing the mortgage interest deduction.
- AznHisoka 9y ago
  Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?!
  - SmellTheGlove 9y ago
    > Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?! Renters already are paying a piece of the property tax. It's built into the rent. They just can't deduct it.
    - AznHisoka 9y ago
      Ok that may be true but why should they be allowed to deduct it? They are not a business owner (unlike the landlord). Its like allowing people to deduct 10% of everything they buy from Amazon because they are paying a part of Amazon’s warehousing costs.
      - SmellTheGlove 9y ago
        I'm not advocating for renters to be able to deduct a piece of the underlying property tax. I don't think it makes sense to have property tax as a federal deduction at all. In general, I'm not sure how great it is that we favor home ownership over renting in our tax policy. My bigger issue is being able to deduct mortgage interest but not rent. Mortgage interest is essentially rent on money, so I've always thought it'd be fair to make rent (or a percentage of it at least) deductible as well. Or, even better, eliminate the mortgage interest deduction entirely. Full disclosure, I'm a homeowner. Fuller disclosure, my home is paid off, so it's easy for me to say these deductions shouldn't exist. I would gladly give up the property tax deduction if that additional revenue was used for something other than cutting taxes for the wealthy, though.
        AznHisoka 9y ago
        OK, I see your point with mortgage interest interested being deductible.
- mcbruiser4 9y ago
  > My rent isn't tax deductible. Why is yours blessed with such a status Because for better or worse (for better IMO), the government wants to encourage homeownership and families, which is why there's also a credit for children.
timw0j 9y ago
It doesn't, and that's why a large majority of economists were wholly against it.
- alexanderstears 9y ago
  That's not true at all. Most economists agree that it's not optimal to tax-advantage home ownership over renting and most economists would agree that state and local tax deductions warp incentives and resource allocations away from where they'd be if the state and local taxes weren't deducted. The consensus opinion among economists is that the house version of the bill does reduce the amount of consumption that can be structured in a tax-advantaged way but that it's not appropriate to cut taxes right now.
refurb 9y ago
People have been clamoring for more taxes on the rich. Well, this is what it looks like. Oh wait! You didn't think you were rich, right?
- matt_wulfeck 9y ago
  Depends on if you mean rich for California, rich for the USA, or rich for the world. Oh wait! They didn’t think wealth was relative, right?
  - deleted 9y ago
    [deleted]
- eridius 9y ago
  No, this is a hit on the upper middle class. The actual rich aren't feeling the pain.
  - deadmetheny 9y ago
    Spoiler alert: if you make over $200,000 a year, you are the rich compared to most of the rest of the country. I love that a factual statement is getting downvoted, btw. Get a grip on your frame of reference, HN.
    - davidjnelson 9y ago
      Rich is relative to housing costs.
      - Willson50 9y ago
        Feel free to move.
      - deadmetheny 9y ago
        Your $200,000 a year will get you by very nicely here in the Midwest. We even have jobs and accept the same currency you're paid in over in SV, imagine that!
lettergram 9y ago
California is the insane state with created the taxes. The government is trying to simplify the tax code, that means you should be able to say: "I'm taxed at 15%, and that means out of $100k you get $85k take home" Not all the deductions. I'm not really, for or against this bill. I used to live in Alameda, CA and thought the taxes were insane. The bag tax, the income tax, the property tax, literally if you didn't have deductions out of $100k you might have a $30k take home. That's the crazy part. Perhaps we should rethink the government being the biggest employer, and actually make taxes simple and uniform.
- cortesoft 9y ago
  > literally if you didn't have deductions out of $100k you might have a $30k take home. That is just not true. Up until very recently, I had ZERO deductions I could take. I made over $100k in San Francisco and my take home was about 65% of my income.
  - EgoIncarnate 9y ago
    If you paid state income tax, you should have been able to deduct that at the very least (probably around 6k, or about the same as the standard deduction).
    - Aloha 9y ago
      which makes it not worth the paperwork effort to do so.
      - mmanfrin 9y ago
        Are you kidding me? $6k deductions is about $2k in rebates. A $150 accountant fee would take care of any paperwork. Taxes aren't that fucking hard.
        Aloha 9y ago
        6k in deductions is equal to the standard deduction
alexanderstears 9y ago
>I cannot see this bill as anything short of theft. How do you distinguish between taxation and theft?
harryh 9y ago
There are numerous items written by economists that discuss in detail why state and local taxes and mortgage interest should not be deductible from federal taxes. It's very highly agreed upon. Perhaps you should seek out some of this literature. I also strongly suspect that you are overestimating the magnitude of the tax increase you will see but if course it's very hard to know without the details of your particular financial situation. In particular I will note that the mortgage interest deduction is grandfathered in for current homeowners and the elimination only applies to loans over 500k (and that's only in the house bill. the deduction remains completely in the senate bill. it remains to be seen what happens in reconciliation).
- jbooth 9y ago
  That's all fine, but IN CONTEXT, OP is still getting robbed. They're paying higher taxes while the super-rich pay lower taxes. They could have passed a bill that eliminated those deductions and gave corresponding tax breaks to the middle class. They could have passed a bill that skipped the tax breaks for the super-rich and actually cut the deficit. I'm OK with paying my fair share if we were actually solving problems. But no. We've gotta pay higher taxes while still blowing a hole in the deficit? In what world does that make sense?
  - harryh 9y ago
    There are tax breaks to the middle + lower classes. Lower bracket rates are lowered, the standard deduction (which is used by people on the lower end of the income spectrum much more) is dramatically increased, and the child tax credit is increased.
    - dragonwriter 9y ago
      > There are tax breaks to the middle + lower classes. The net impact is a tax increase on the very poorest in the short term; and on pretty much the whole segment up to a bit above median income over the 10 year period. Yes, there are individual provisions that, taken in isolation, benefit the working class, but in net it's a loss not a gain.
putlake 9y ago
Instead of selling, if you move out and rent out your house, the rent you collect will only be taxed at a max rate of 25%. The federal income tax rate on passive income from S-corporations (which are pass through entities) maxes out at 25%.
TheAdamAndChe 9y ago
When the federal government gives high tax states tax cuts, that means those areas give less to the federal government, meaning those generally rich states end up getting federally subsidized by the poorer states. How does _that_ make sense? Shouldn't the richer areas help pay for the poor? Why not do something about the high taxes in your state instead?
- dragonwriter 9y ago
  > When the federal government gives high tax states tax cuts, that means those areas give less to the federal government, meaning those generally rich states end up getting federally subsidized by the poorer states. Except those generally rich states are, in fact, currently net federal tax subsidizers of the rest of the country; this tax reform will actually reduce that because the rich people who are concentrated on those states will get huge tax cuts, whereas poorer people in the rest of the country will get big tax increases. > Shouldn't the richer areas help pay for the poor? So, what you are saying is we shouldn't adopt a tax “reform” that massively reduces progressivity transferring tax burden from the rich too the poor? If so, on that much we agree.
- mullen 9y ago
  We do subsidize poor states. You speak as though Red states contribute anything to the federal government. With the exception of Texas, Georgia and some oil rich states, all of the Red states are takers and just about all of the Blue states are givers.
  - TheAdamAndChe 9y ago
    Red states also tend to have a lot more poverty and less economic development. Why should rich areas of the country receive just as much federal aid as poor areas? It makes sense that different states receive different aid.
    - mullen 9y ago
      They don't. For every dollar we send the Federal government, we (California) gets back 88 cents. Mississippi gets something like $4 for every $1 it sends to the Federal government.
berberous 9y ago
Any chance you'd be willing to, roughly, show your work? I'm curious to see if your calcs are accurate and how you are getting to that number. Understand if you prefer not to. Thanks.
stillhere 9y ago
No longer shall the welfare programs in your state be subsidized by the federal government. If Californians are for said programs in their state, then they should subsidize them.
koolba 9y ago
The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? If you want to lower your State tax bill then lobby your State representatives. If you want to lower your property taxes then lobby your local officials. Or vote with your feet and move somewhere that doesn’t subscribe to those high tax policies.
- kevinh 9y ago
  California already pays more to the federal government than it takes out. It is subsidizing poorer states, not the other way around.
  - deleted 9y ago
    [deleted]
- dragonwriter 9y ago
  > The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? They aren't. The high tax states generally are net contributors to the federal treasury, the low tax states are generally net drains.
- jonathankoren 9y ago
  >The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? No one asks this question, because the premise is completely flawed. http://www.businessinsider.com/the-states-the-most-and-least-dependent-on-the-federal-government-2015-7 http://www.businessinsider.com/the-states-the-most-and-least...
- SmellTheGlove 9y ago
  > The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? High tax states tend to pay in more than they see back in benefits.
SmellTheGlove 9y ago
I'm approaching from the opposite situation - I have a paid off house in my lower cost of living state and am relocating to the Bay Area for a job next month. I will not be selling my current home, nor buying in the Bay Area, until the fallout of this tax bill is known. At the very least, housing prices may come down where I'm going, but likely not where I'm moving from (since the mortgage interest deduction on most homes around here will wash out with the doubling of the standard deduction, but even if it does, it's percentages of far smaller numbers comparatively). Meanwhile, it sounds like nothing's changing in what I'll be able to deduct as a landlord. At least, that's my thought. That said, it's always been a little odd to me that we could deduct our mortgage interest and property taxes, but a renter cannot even though they're paying a good portion of that on our behalf.
- hcknwscommenter 9y ago
  "That said, it's always been a little odd to me that we could deduct our mortgage interest and property taxes, but a renter cannot even though they're paying a good portion of that on our behalf." I'm not going to suggest that it is as simple as the following, but the underlying rationale is that the renter benefits from lower rent than it would otherwise be because the landlord has lower expenses.
  - closeparen 9y ago
    Landlords don’t charge their own expenses + some fixed margin. They charge what the market will bear. Expensive blue state housing markets are at no risk of seeing rents fall below landlords’ costs.
cbhl 9y ago
Who are the ultra-rich getting a tax cut? I'm under the impression that it's the corporations getting the biggest big tax cut in this bill -- so possibly your employer.
- hcknwscommenter 9y ago
  The CBO projects that those with income of greater than 1M a year get a tax cut.
BeetleB 9y ago
Disclaimer: This bill adversely affects me as well, and I'm not in favor of it, but: >This tax bill utterly fucks me, to the point I'm considering selling my house to get ahead of the inevitable housing crash. Can you imagine any type of reasonable tax reform that would not cause someone's tax to go up? Just the fact that some folks' taxes will go up does not make it a poor plan. If your deductions are about $60K, then whether you feel like it or not, you are rich. And most tax overhauls would likely tax wealthier people more. This bill is a bit problematic as it taxes people in the upper middle class the most - whereas the rest of the lower/middle class and upper class get a break.
- deleted 9y ago
  [deleted]
- dv_dt 9y ago
  This is not a reasonable tax reform - its a net negative 1.5 trillion dollars to the federal budget, but really it's giving even more than that to corporations and the rich while increasing taxes on people who primarily make their income from labor (vs capital rents).
  - hcknwscommenter 9y ago
    Bingo!
- hcknwscommenter 9y ago
  "If your deductions are about $60K, then whether you feel like it or not, you are rich." You are confusing income with wealth. They are somewhat causally related to be sure, but totally different. Case in point: I started receiving a high income at the age of 40 in SF, where before I earned a poverty wage. At 42, I have much less wealth than your average SF school teacher of the same age.
- mcbruiser4 9y ago
  > Can you imagine any type of reasonable tax reform that would not cause someone's tax to go up? Yes, easy. Lower taxes for everyone, and also lower gov't spending and entitlements at the same time.
syshum 9y ago
>>I cannot see this bill as anything short of theft Welcome to libertarianism ;)
wanderer2323 9y ago
The government was subsidizing your lifestyle -- owning an expensive house in a state with a high income tax. It does not want to do this anymore. It makes as much economic sense as other subsidies do. Props for figuring out that taxation is theft though. Maybe next time don't vote for state government with highest state income tax in US?
- dmode 9y ago
  Government subsidizes a ton of lifestyles. People with children. People who go to church. People with "pass throughs". People with estates. People with businesses. But somehow income tax in blue state is the target.
- deleted 9y ago
  [deleted]
brandnewlow 9y ago
I went to an open house in SF Saturday. The realtor had been planning to list the house in February but the seller is so worried about the tax situation they put it on the market and want it sold ASAP.
benjaminl 9y ago
So you lost your special interest deductions and now have to pay taxes on your actual income? Doesn't sound unfair to me.
jartelt 9y ago
Why should you get to make all those deductions in the first place? Just because you bought an expensive house doesn't mean you should pay that much less tax than a renter living in the same county as you.
- klipt 9y ago
  The House version of the tax bill keeps property taxes deductible, because Texas has high property taxes and votes GOP. Deduction used by GOP voters? Keep! Deduction used by Democrat voters? Remove! This bill is a weaponization of the tax code against majority Democrat voting states.
Shivetya 9y ago
it is not theft to remove a deduction. state and city taxes should never have been deductible before this. That deduction favored those who could itemize, the well off. People harp all the time on this site about the plight of the poor, the undeserved, and more but damn you guys don't suck. You are damn generous when it comes to some other person's money but have you pay more and it is Armageddon. Quit bemoaning the wealthy and recognize you are one of them. It doesn't take millions to be wealthy in this country and certainly not billions. As with the city/state tax issue, all deductible taxes favor the wealthy. This takes an otherwise overly progressive tax system to steals it back by slight of hand. Politicians can show the poor who the exploit "see these high rates" and then bury a myriad of breaks in the system to give back to those who provided the funds needed for election. Hell i am going to get walloped and I will adjust. I qualify for the 7500 EV rebate for my purchase in 17 and I am glad it is going; though for two reasons the first being the rich don't need help buying cars and the second manufactures late to the game should not get the benefit born out by the early adoption manufacturers. The Joint Committee on Taxation finds no reason to not favor the bill. Deficits we experience don't come because of tax cuts, it comes because baseline budgeting out paces inflation and GDP growth. Guess what guys, its time we pony up and pay for what we want. We don't get to pontificate on forums all day long. We have to pay the piper just like everyone else and many of us will benefit from the cut as well as suffer some losses but in the end those on the lower brackets will see nearly all their tax burden decreased and isn't that what we all keep saying we want, to help them up?
- hcknwscommenter 9y ago
  "but in the end those on the lower brackets will see nearly all their tax burden decreased and isn't that what we all keep saying we want, to help them up" Go read the CBO report. This is blatantly false. If you believe this and are not a troll, please educate yourself.
joe_the_user 9y ago
If a housing-crash is an unintended consequence of this bill, I'd count it a win. However, it's quite possible you won't have a crash but simply a consolidation as homeowners who can't afford the taxes are replaced by ultra-rich landlord-speculators. And of course, this makes sense to the ultra-rich.
lebanon_tn 9y ago
Lifelong Californian here. Recently moved to Florida. You should consider complaining to your local and state government about your high taxes. Why should workers in other states subsidize local taxes for higher cost of living areas through federal deductions? Force your politicians to justify what you are paying.
- hcknwscommenter 9y ago
  "Why should workers in other states subsidize local taxes for higher cost of living areas through federal deducations" Because those workers do not in fact subsidize my local taxes. As a Californian, I subsidize those low tax states as CA residents pay more in federal taxes than the state gets in federal benefits.
  - lebanon_tn 9y ago
    #1 in gross collections, but per capita is a different story. https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state
    - Redoubts 9y ago
      I don't see revenue vs outlays in that link.
  - stillhere 9y ago
    Just because other states have weaker economies doesn't mean the residents aren't contributing their relative fair share.
- klipt 9y ago
  You can say that about any deduction. Why should taxpayers who aren't Christian subsidize donations to churches?
  - lebanon_tn 9y ago
    I agree that a church should not be broadly exempt from taxation as the current system allows. Perhaps it could be narrowed to only exempt the value of actual goods and services provided to the community (like operating a homeless shelter or soup kitchen)
git_rancher 9y ago
The upper middle class is apparently a minority that is politically safe to do economic harm to.
- closeparen 9y ago
  Bingo. Working and middle class say, “fuck you, you’re rich.” Upper class says, “fuck you, only peasants get paid in wages/salary.” Same with housing. The rich see single family homes as a good investment at any price. The poor see anything other than BMR as not for them. No one wants to house yuppies other than a constituency which is too privileged to have liberal credibility and too poor to leverage policies driven by the rich.
influx 9y ago
The median home value in Alameda County is $796,600. Median income is $97,000, total comp for software engineers at your company ranges between 100 and 255K/year, so you are already above the median income in that county. According to: https://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/ https://www.investopedia.com/news/how-much-income-puts-you-t... "The top 5% of households earn an annual income of $214,462 or higher" Most folks in the US, or the world would consider you rich and deserving of paying more taxes. For comparison, "the U.S. Census Bureau reported in September 2017 that real median household income was $59,039 in 2016".
- notconservative 9y ago
  Thank you for posting the numbers to back this up.
handbanana 9y ago
I'm not ultra rich, and these tax changes benefit me. From what I understand, the tax changes do benefit a high number of people. But the amount they appear to negatively impact those that don't benefit from them, also appears to be high (which of course, isn't great) I have not looked in depth at the tax changes (ie read the changes in detail), but I do think there's more to the changes than just giving the ultra rich a tax cut. It seems to me that those living in high tax states, with expensive housing, appear to be negatively impacted.
pianom4n 9y ago
Define "highish". You'll only get a tax increase if you're making more than 350K. https://jsfiddle.net/381rkrsq/ https://jsfiddle.net/381rkrsq/

vkou 9y ago

> I cannot see this bill as anything short of theft. Why do I have to pay double-digit percentage more on my taxes to give the ultra rich a tax cut? In what fucking world does that make any economic sense. My rent isn't tax deductible. Why is yours blessed with such a status (In the form of a mortgage, and property tax deduction)? All that mortgage tax deductions do, economically, is increase the overall price of homes, and have non-homeowners subsidize home-owners.

mattchristen 9y ago
Because the person that owns the property you rent is receiving those benefits.
mmanfrin 9y ago
Mortgage interest and property taxes are costs on top of the actual cost of the house. My mortgage itself isn't tax deductible.
- refurb 9y ago
  It's still a concession to homeowners that renters don't get. We want taxes to be fair, no?
  - rootusrootus 9y ago
    Not really. Trying to make taxes fit some arbitrary definition of fair is most of the problem. We should be looking at macro effects on our whole economy when making decisions on taxes.
froindt 9y ago
FWIW, only the interest is deductible, not the entire payment. I agree with the sentiment though. The realtors have arguably the most effective lobbying efforts, and to be able to tie their industry in with the "American Dream" has been very effective. I was out in DC earlier this year speaking with my congressional representatives about some changes to the bankruptcy code. We were working with a lobbyist who said something along the lines of "everybody knows when the realtors are in town. Nobody tries to get meetings that week because they have such a great mobilization effort, everyone gets booked up."
gizmo 9y ago
The rationale is to encourage home ownership, because that gives people an incentive to care about upkeep and the community. It's hard to create good neighborhoods with renters who can just pack up and leave.
hbarka 9y ago
Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. And if you know anything about Western society, home ownership creates stable societies—that’s why ownership is encouraged.
- BeetleB 9y ago
  >Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. As someone who knows many landlords: Completely wrong. They buy properties with a loan. They pay interest on that loan. The money the renter pays goes towards the interest payments. Renters are essentially buying the properties for the owners. And landlords can keep deducting it, no matter how many properties. Homeowners can deduct only for two houses. And renters deduct none of it. The landlords literally deduct what their tenants are paying (interest, which is part of their rent). And not sure about your other comment, but rarely do renters of similar size houses/apartments pay less than homeowners. As an example, my house I bought only a few years ago: I pay just a little more than some 3 bedroom apartments (which are much smaller than my house). Most 3 bedroom apartments in desirable areas in my city pay more in rent than my monthly payment. And then with all the deductions I was getting, I was effectively paying less than most 2 bedroom apartments, and some single bedroom apartments. And if I take into account the amount going towards the principle, I'm paying about the same as most single bedroom apartments in my area. I did not put in a huge down payment. Less than 20%, in fact.
  - hbarka 9y ago
    Uhhh, the topic was about taxes. The homeowner demographic is statistically a higher earner than the renter demographic, thus pay more taxes.
  - tzs 9y ago
    Businesses generally get to deduct interest on loans used for the business, so landlords would probably be able to deduct mortgage interest under that even if there was no specific mortgage deduction in the tax code. Accordingly, I'm not sure it makes sense to discuss landlords when discussing the mortgage interest deduction.
AznHisoka 9y ago
Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?!
- SmellTheGlove 9y ago
  > Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?! Renters already are paying a piece of the property tax. It's built into the rent. They just can't deduct it.
  - AznHisoka 9y ago
    Ok that may be true but why should they be allowed to deduct it? They are not a business owner (unlike the landlord). Its like allowing people to deduct 10% of everything they buy from Amazon because they are paying a part of Amazon’s warehousing costs.
    - SmellTheGlove 9y ago
      I'm not advocating for renters to be able to deduct a piece of the underlying property tax. I don't think it makes sense to have property tax as a federal deduction at all. In general, I'm not sure how great it is that we favor home ownership over renting in our tax policy. My bigger issue is being able to deduct mortgage interest but not rent. Mortgage interest is essentially rent on money, so I've always thought it'd be fair to make rent (or a percentage of it at least) deductible as well. Or, even better, eliminate the mortgage interest deduction entirely. Full disclosure, I'm a homeowner. Fuller disclosure, my home is paid off, so it's easy for me to say these deductions shouldn't exist. I would gladly give up the property tax deduction if that additional revenue was used for something other than cutting taxes for the wealthy, though.
      - AznHisoka 9y ago
        OK, I see your point with mortgage interest interested being deductible.
mcbruiser4 9y ago
> My rent isn't tax deductible. Why is yours blessed with such a status Because for better or worse (for better IMO), the government wants to encourage homeownership and families, which is why there's also a credit for children.

timw0j 9y ago

It doesn't, and that's why a large majority of economists were wholly against it.

alexanderstears 9y ago
That's not true at all. Most economists agree that it's not optimal to tax-advantage home ownership over renting and most economists would agree that state and local tax deductions warp incentives and resource allocations away from where they'd be if the state and local taxes weren't deducted. The consensus opinion among economists is that the house version of the bill does reduce the amount of consumption that can be structured in a tax-advantaged way but that it's not appropriate to cut taxes right now.

refurb 9y ago

People have been clamoring for more taxes on the rich. Well, this is what it looks like. Oh wait! You didn't think you were rich, right?

matt_wulfeck 9y ago
Depends on if you mean rich for California, rich for the USA, or rich for the world. Oh wait! They didn’t think wealth was relative, right?
- deleted 9y ago
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eridius 9y ago
No, this is a hit on the upper middle class. The actual rich aren't feeling the pain.
- deadmetheny 9y ago
  Spoiler alert: if you make over $200,000 a year, you are the rich compared to most of the rest of the country. I love that a factual statement is getting downvoted, btw. Get a grip on your frame of reference, HN.
  - davidjnelson 9y ago
    Rich is relative to housing costs.
    - Willson50 9y ago
      Feel free to move.
    - deadmetheny 9y ago
      Your $200,000 a year will get you by very nicely here in the Midwest. We even have jobs and accept the same currency you're paid in over in SV, imagine that!

lettergram 9y ago

California is the insane state with created the taxes. The government is trying to simplify the tax code, that means you should be able to say: "I'm taxed at 15%, and that means out of $100k you get $85k take home" Not all the deductions. I'm not really, for or against this bill. I used to live in Alameda, CA and thought the taxes were insane. The bag tax, the income tax, the property tax, literally if you didn't have deductions out of $100k you might have a $30k take home. That's the crazy part. Perhaps we should rethink the government being the biggest employer, and actually make taxes simple and uniform.

cortesoft 9y ago
> literally if you didn't have deductions out of $100k you might have a $30k take home. That is just not true. Up until very recently, I had ZERO deductions I could take. I made over $100k in San Francisco and my take home was about 65% of my income.
- EgoIncarnate 9y ago
  If you paid state income tax, you should have been able to deduct that at the very least (probably around 6k, or about the same as the standard deduction).
  - Aloha 9y ago
    which makes it not worth the paperwork effort to do so.
    - mmanfrin 9y ago
      Are you kidding me? $6k deductions is about $2k in rebates. A $150 accountant fee would take care of any paperwork. Taxes aren't that fucking hard.
      - Aloha 9y ago
        6k in deductions is equal to the standard deduction

alexanderstears 9y ago

>I cannot see this bill as anything short of theft. How do you distinguish between taxation and theft?

harryh 9y ago

There are numerous items written by economists that discuss in detail why state and local taxes and mortgage interest should not be deductible from federal taxes. It's very highly agreed upon. Perhaps you should seek out some of this literature. I also strongly suspect that you are overestimating the magnitude of the tax increase you will see but if course it's very hard to know without the details of your particular financial situation. In particular I will note that the mortgage interest deduction is grandfathered in for current homeowners and the elimination only applies to loans over 500k (and that's only in the house bill. the deduction remains completely in the senate bill. it remains to be seen what happens in reconciliation).

jbooth 9y ago
That's all fine, but IN CONTEXT, OP is still getting robbed. They're paying higher taxes while the super-rich pay lower taxes. They could have passed a bill that eliminated those deductions and gave corresponding tax breaks to the middle class. They could have passed a bill that skipped the tax breaks for the super-rich and actually cut the deficit. I'm OK with paying my fair share if we were actually solving problems. But no. We've gotta pay higher taxes while still blowing a hole in the deficit? In what world does that make sense?
- harryh 9y ago
  There are tax breaks to the middle + lower classes. Lower bracket rates are lowered, the standard deduction (which is used by people on the lower end of the income spectrum much more) is dramatically increased, and the child tax credit is increased.
  - dragonwriter 9y ago
    > There are tax breaks to the middle + lower classes. The net impact is a tax increase on the very poorest in the short term; and on pretty much the whole segment up to a bit above median income over the 10 year period. Yes, there are individual provisions that, taken in isolation, benefit the working class, but in net it's a loss not a gain.

putlake 9y ago

Instead of selling, if you move out and rent out your house, the rent you collect will only be taxed at a max rate of 25%. The federal income tax rate on passive income from S-corporations (which are pass through entities) maxes out at 25%.

TheAdamAndChe 9y ago

When the federal government gives high tax states tax cuts, that means those areas give less to the federal government, meaning those generally rich states end up getting federally subsidized by the poorer states. How does _that_ make sense? Shouldn't the richer areas help pay for the poor? Why not do something about the high taxes in your state instead?

dragonwriter 9y ago
> When the federal government gives high tax states tax cuts, that means those areas give less to the federal government, meaning those generally rich states end up getting federally subsidized by the poorer states. Except those generally rich states are, in fact, currently net federal tax subsidizers of the rest of the country; this tax reform will actually reduce that because the rich people who are concentrated on those states will get huge tax cuts, whereas poorer people in the rest of the country will get big tax increases. > Shouldn't the richer areas help pay for the poor? So, what you are saying is we shouldn't adopt a tax “reform” that massively reduces progressivity transferring tax burden from the rich too the poor? If so, on that much we agree.
mullen 9y ago
We do subsidize poor states. You speak as though Red states contribute anything to the federal government. With the exception of Texas, Georgia and some oil rich states, all of the Red states are takers and just about all of the Blue states are givers.
- TheAdamAndChe 9y ago
  Red states also tend to have a lot more poverty and less economic development. Why should rich areas of the country receive just as much federal aid as poor areas? It makes sense that different states receive different aid.
  - mullen 9y ago
    They don't. For every dollar we send the Federal government, we (California) gets back 88 cents. Mississippi gets something like $4 for every $1 it sends to the Federal government.

berberous 9y ago

Any chance you'd be willing to, roughly, show your work? I'm curious to see if your calcs are accurate and how you are getting to that number. Understand if you prefer not to. Thanks.

stillhere 9y ago

No longer shall the welfare programs in your state be subsidized by the federal government. If Californians are for said programs in their state, then they should subsidize them.

koolba 9y ago

The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? If you want to lower your State tax bill then lobby your State representatives. If you want to lower your property taxes then lobby your local officials. Or vote with your feet and move somewhere that doesn’t subscribe to those high tax policies.

kevinh 9y ago
California already pays more to the federal government than it takes out. It is subsidizing poorer states, not the other way around.
- deleted 9y ago
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dragonwriter 9y ago
> The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? They aren't. The high tax states generally are net contributors to the federal treasury, the low tax states are generally net drains.
jonathankoren 9y ago
>The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? No one asks this question, because the premise is completely flawed. http://www.businessinsider.com/the-states-the-most-and-least-dependent-on-the-federal-government-2015-7 http://www.businessinsider.com/the-states-the-most-and-least...
SmellTheGlove 9y ago
> The counter argument is, why should the rest of the country and generally lower income tax payers be subsidizing the high State taxes, high property taxes, and higher mortgage deductions on your expensive homes? High tax states tend to pay in more than they see back in benefits.

SmellTheGlove 9y ago

I'm approaching from the opposite situation - I have a paid off house in my lower cost of living state and am relocating to the Bay Area for a job next month. I will not be selling my current home, nor buying in the Bay Area, until the fallout of this tax bill is known. At the very least, housing prices may come down where I'm going, but likely not where I'm moving from (since the mortgage interest deduction on most homes around here will wash out with the doubling of the standard deduction, but even if it does, it's percentages of far smaller numbers comparatively). Meanwhile, it sounds like nothing's changing in what I'll be able to deduct as a landlord. At least, that's my thought. That said, it's always been a little odd to me that we could deduct our mortgage interest and property taxes, but a renter cannot even though they're paying a good portion of that on our behalf.

hcknwscommenter 9y ago
"That said, it's always been a little odd to me that we could deduct our mortgage interest and property taxes, but a renter cannot even though they're paying a good portion of that on our behalf." I'm not going to suggest that it is as simple as the following, but the underlying rationale is that the renter benefits from lower rent than it would otherwise be because the landlord has lower expenses.
- closeparen 9y ago
  Landlords don’t charge their own expenses + some fixed margin. They charge what the market will bear. Expensive blue state housing markets are at no risk of seeing rents fall below landlords’ costs.

cbhl 9y ago

Who are the ultra-rich getting a tax cut? I'm under the impression that it's the corporations getting the biggest big tax cut in this bill -- so possibly your employer.

hcknwscommenter 9y ago
The CBO projects that those with income of greater than 1M a year get a tax cut.

BeetleB 9y ago

Disclaimer: This bill adversely affects me as well, and I'm not in favor of it, but: >This tax bill utterly fucks me, to the point I'm considering selling my house to get ahead of the inevitable housing crash. Can you imagine any type of reasonable tax reform that would not cause someone's tax to go up? Just the fact that some folks' taxes will go up does not make it a poor plan. If your deductions are about $60K, then whether you feel like it or not, you are rich. And most tax overhauls would likely tax wealthier people more. This bill is a bit problematic as it taxes people in the upper middle class the most - whereas the rest of the lower/middle class and upper class get a break.

deleted 9y ago
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dv_dt 9y ago
This is not a reasonable tax reform - its a net negative 1.5 trillion dollars to the federal budget, but really it's giving even more than that to corporations and the rich while increasing taxes on people who primarily make their income from labor (vs capital rents).
- hcknwscommenter 9y ago
  Bingo!
hcknwscommenter 9y ago
"If your deductions are about $60K, then whether you feel like it or not, you are rich." You are confusing income with wealth. They are somewhat causally related to be sure, but totally different. Case in point: I started receiving a high income at the age of 40 in SF, where before I earned a poverty wage. At 42, I have much less wealth than your average SF school teacher of the same age.
mcbruiser4 9y ago
> Can you imagine any type of reasonable tax reform that would not cause someone's tax to go up? Yes, easy. Lower taxes for everyone, and also lower gov't spending and entitlements at the same time.

syshum 9y ago

>>I cannot see this bill as anything short of theft Welcome to libertarianism ;)

wanderer2323 9y ago

The government was subsidizing your lifestyle -- owning an expensive house in a state with a high income tax. It does not want to do this anymore. It makes as much economic sense as other subsidies do. Props for figuring out that taxation is theft though. Maybe next time don't vote for state government with highest state income tax in US?

dmode 9y ago
Government subsidizes a ton of lifestyles. People with children. People who go to church. People with "pass throughs". People with estates. People with businesses. But somehow income tax in blue state is the target.
deleted 9y ago
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brandnewlow 9y ago

I went to an open house in SF Saturday. The realtor had been planning to list the house in February but the seller is so worried about the tax situation they put it on the market and want it sold ASAP.

benjaminl 9y ago

So you lost your special interest deductions and now have to pay taxes on your actual income? Doesn't sound unfair to me.

jartelt 9y ago

Why should you get to make all those deductions in the first place? Just because you bought an expensive house doesn't mean you should pay that much less tax than a renter living in the same county as you.

klipt 9y ago
The House version of the tax bill keeps property taxes deductible, because Texas has high property taxes and votes GOP. Deduction used by GOP voters? Keep! Deduction used by Democrat voters? Remove! This bill is a weaponization of the tax code against majority Democrat voting states.

Shivetya 9y ago

it is not theft to remove a deduction. state and city taxes should never have been deductible before this. That deduction favored those who could itemize, the well off. People harp all the time on this site about the plight of the poor, the undeserved, and more but damn you guys don't suck. You are damn generous when it comes to some other person's money but have you pay more and it is Armageddon. Quit bemoaning the wealthy and recognize you are one of them. It doesn't take millions to be wealthy in this country and certainly not billions. As with the city/state tax issue, all deductible taxes favor the wealthy. This takes an otherwise overly progressive tax system to steals it back by slight of hand. Politicians can show the poor who the exploit "see these high rates" and then bury a myriad of breaks in the system to give back to those who provided the funds needed for election. Hell i am going to get walloped and I will adjust. I qualify for the 7500 EV rebate for my purchase in 17 and I am glad it is going; though for two reasons the first being the rich don't need help buying cars and the second manufactures late to the game should not get the benefit born out by the early adoption manufacturers. The Joint Committee on Taxation finds no reason to not favor the bill. Deficits we experience don't come because of tax cuts, it comes because baseline budgeting out paces inflation and GDP growth. Guess what guys, its time we pony up and pay for what we want. We don't get to pontificate on forums all day long. We have to pay the piper just like everyone else and many of us will benefit from the cut as well as suffer some losses but in the end those on the lower brackets will see nearly all their tax burden decreased and isn't that what we all keep saying we want, to help them up?

hcknwscommenter 9y ago
"but in the end those on the lower brackets will see nearly all their tax burden decreased and isn't that what we all keep saying we want, to help them up" Go read the CBO report. This is blatantly false. If you believe this and are not a troll, please educate yourself.

joe_the_user 9y ago

If a housing-crash is an unintended consequence of this bill, I'd count it a win. However, it's quite possible you won't have a crash but simply a consolidation as homeowners who can't afford the taxes are replaced by ultra-rich landlord-speculators. And of course, this makes sense to the ultra-rich.

lebanon_tn 9y ago

Lifelong Californian here. Recently moved to Florida. You should consider complaining to your local and state government about your high taxes. Why should workers in other states subsidize local taxes for higher cost of living areas through federal deductions? Force your politicians to justify what you are paying.

hcknwscommenter 9y ago
"Why should workers in other states subsidize local taxes for higher cost of living areas through federal deducations" Because those workers do not in fact subsidize my local taxes. As a Californian, I subsidize those low tax states as CA residents pay more in federal taxes than the state gets in federal benefits.
- lebanon_tn 9y ago
  #1 in gross collections, but per capita is a different story. https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state
  - Redoubts 9y ago
    I don't see revenue vs outlays in that link.
- stillhere 9y ago
  Just because other states have weaker economies doesn't mean the residents aren't contributing their relative fair share.
klipt 9y ago
You can say that about any deduction. Why should taxpayers who aren't Christian subsidize donations to churches?
- lebanon_tn 9y ago
  I agree that a church should not be broadly exempt from taxation as the current system allows. Perhaps it could be narrowed to only exempt the value of actual goods and services provided to the community (like operating a homeless shelter or soup kitchen)

git_rancher 9y ago

The upper middle class is apparently a minority that is politically safe to do economic harm to.

closeparen 9y ago
Bingo. Working and middle class say, “fuck you, you’re rich.” Upper class says, “fuck you, only peasants get paid in wages/salary.” Same with housing. The rich see single family homes as a good investment at any price. The poor see anything other than BMR as not for them. No one wants to house yuppies other than a constituency which is too privileged to have liberal credibility and too poor to leverage policies driven by the rich.

influx 9y ago

The median home value in Alameda County is $796,600. Median income is $97,000, total comp for software engineers at your company ranges between 100 and 255K/year, so you are already above the median income in that county. According to: https://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/ https://www.investopedia.com/news/how-much-income-puts-you-t... "The top 5% of households earn an annual income of $214,462 or higher" Most folks in the US, or the world would consider you rich and deserving of paying more taxes. For comparison, "the U.S. Census Bureau reported in September 2017 that real median household income was $59,039 in 2016".

notconservative 9y ago
Thank you for posting the numbers to back this up.

handbanana 9y ago

I'm not ultra rich, and these tax changes benefit me. From what I understand, the tax changes do benefit a high number of people. But the amount they appear to negatively impact those that don't benefit from them, also appears to be high (which of course, isn't great) I have not looked in depth at the tax changes (ie read the changes in detail), but I do think there's more to the changes than just giving the ultra rich a tax cut. It seems to me that those living in high tax states, with expensive housing, appear to be negatively impacted.

pianom4n 9y ago

Define "highish". You'll only get a tax increase if you're making more than 350K. https://jsfiddle.net/381rkrsq/ https://jsfiddle.net/381rkrsq/