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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 taxe
by 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 agoThat'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 agoThere 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.
- harryh 9y ago1) If we're also talking about how the cost of health insurance might change then you could be correct about the very poorest. It's a bit hard to say. If we're only talking about taxes paid, then you are wrong there. 2) I think that the whole "over the 10 year period" is a bit of a red herring. The US tax system isn't getting set in concrete with the (potential) passage of this bill. Numerous things will almost certainly change over the next 10 years. Tax breaks set to expire will get extended. Rates will get tinkered with. It's hard to know what might happen. Because of this I think the short term effects matter much much more than what is theoretically set to happen in 10 years.
- munk-a 9y agoRegarding 2: This tax law has specifically baked in expirations of some portions. When they come up for renewal the GOP will whine and moan about the unbalanced expenditures and they'll either lapse or be supplemented with additional cuts, the corporate side of these cuts is not subjected to this. It's fine to say "Oh, things may change down the road" but today they designed a tax cut that will benefit the rich, I do hope we're saved from this ridiculous hand out down the line, but that will be by the actions of other people, these politicians have written the bill as they desire it.
- jbooth 9y agoSpecifically, what will happen is Democrats will have to clean up the mess, and the GOP and their cheerleaders will call the fix 'job killing tax hikes'. But that's later! Right now it's a red herring to call the mess a mess.
- harryh 9y ago> When they come up for renewal the GOP will whine and moan They didn't do this in 2013 when some of the Bush tax cuts expired. There is little reason to think that they will do so in this case.
- closeparen 9y agoThe relevant quantity is standard deduction + personal exemption(s) which is barely increasing for single people and declining drastically for families.
- wehadfun 9y agoThe main argument is that richer people buy more expensive houses and get bigger deduction then lower income people and basically lower income people are subsiding rich people mansions. BUT there is a cap which I would guess would work good enough to mitigate this.
- harryh 9y agoAlso people who buy are subsidized by those who rent. We don't need a cap, the deduction shouldn't exist at all. In fact, homeowners should pay taxes on imputed rent like they do in The Netherlands, Iceland & Switzerland.
- JBlue42 9y ago>pay taxes on imputed rent What does this mean? Rent that the home would go for?
- harryh 9y agoYes. https://en.wikipedia.org/wiki/Imputed_rent https://en.wikipedia.org/wiki/Imputed_rent
- JBlue42 9y agoThanks. I wonder how that would work out in LA where we already have high rents, high houses prices, and lower wages. I don't quite know how much one can deduct off their mortgage in taxes but I would assume the imputed rent would be a similar amount in such a market?
- deleted 9y ago[deleted]
- Redoubts 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. Could you show at least one? When I look for this, I don't see articles supporting your position.
- harryh 9y agohttps://fivethirtyeight.com/features/the-tax-deductions-economists-hate/ https://fivethirtyeight.com/features/the-tax-deductions-econ...