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Incidentally, the recent tax cut bill removed the individual deduction for moving expenses when moving to a new job. So the financial costs of relocating have i
by dv_dt 8y ago
Incidentally, the recent tax cut bill removed the individual deduction for moving expenses when moving to a new job. So the financial costs of relocating have increased.
- maxerickson 8y agoYou have to account for the different brackets and larger standard deduction. People that would have deducted high bracket income using the moving expenses see increased costs. People that probably weren't itemizing will see decreased taxes whether they move or not.
- closeparen 8y agoThe point is you pay full price to move; it’s no longer discounted by your marginal tax rate.
- maxerickson 8y agoAnd? It's hardly something to complain about if your effective taxes are lower in the new scheme even without the deduction. (Which is going to be true for an awful lot of the people considering moving away from small towns) Your comment is pretty much a different way of saying what I said in the first sentence of my second paragraph.
- repsilat 8y agoThey're not saying it's "something to complain about". You're arguing against something they didn't say -- the two points, - The tax changes were a net benefit, and - The tax changes make people less likely to move (because the net benefit is lower) are perfectly compatible.
- closeparen 8y agoMoving is now more expensive relative to not moving, so we should expect more people to stay put. The absolute tax burden is irrelevant.
- majormajor 8y agoCouldn't you just as easily spin it the other way? Moving is now feasible because of more total spendable dollars in my pocket, the relative tax savings are irrelevant? I can't speak for everyone, but that maps much more closely to my personal decision-making, which is in terms of absolute dollars, than your formulation.
- hinkley 8y agoIf you’re a renter, sure. But what about if you sell your house?
- dragonwriter 8y ago> You have to account for the different brackets and larger standard deduction. Not to address the marginal costs of moving, which is where the (dis)incentive comes from.
- maxerickson 8y agoLike majormajor below, I think the flexibility from increased income is going to be just as much or more of a factor as the tax incentive.
- dv_dt 8y agoThe other thing the tax bill removed was the exclusion of employer provided relocation support from taxable income. So even if an employer is willing to pay for relocation, that support shows up as taxable income. The new standard deduction for single filers maxes out at somewhere below $43k. So if your income is anywhere above that, you'd get a tax hit for moving. But even the thought of that hit is a possible disincentive.