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"...The $10,000 cap was imposed as a way to offset some of the cost of other individual and business tax cuts. The Treasury Department and the I.R.S. are worri

"...The $10,000 cap was imposed as a way to offset some of the cost of other individual and business tax cuts. The Treasury Department and the I.R.S. are worried that the workarounds could further balloon the cost of the tax cuts, which are projected to add more than $1 trillion to the national debt over a decade." Describing this as likely to 'further balloon' the cost of tax cuts seems inaccurate and misleading - the cost remains precisely the same, it's an attempt by certain high-tax states to avoid a tax increase designed to partially offset the static cost.

drak0n1c 8y ago
Additionally, the CBO recently recalculated the long-term cost of the tax cuts to be $440 billion due to the changes in economic growth after the tax cuts came into effect. The NYT article is ignoring the more recent $440b April estimate in favor of citing the trillion dollar December estimate. https://www.cbo.gov/publication/53651 https://www.cbo.gov/publication/53651 https://www.investors.com/politics/editorials/trump-tax-cuts-revenues-deficits-paying-for-themselves/ https://www.investors.com/politics/editorials/trump-tax-cuts...
- selectodude 8y ago
  "For the 2018–2027 period, CBO now projects a cumulative deficit that is $1.6 trillion larger than the $10.1 trillion that the agency anticipated in June. Projected revenues are lower by $1.0 trillion, and projected outlays are higher by $0.5 trillion." "Laws enacted since June 2017—above all, the three mentioned above—are estimated to make deficits $2.7 trillion larger than previously projected between 2018 and 2027, an effect that results from reducing revenues by $1.7 trillion (or 4 percent) and increasing outlays by $1.0 trillion (or 2 percent). The reduction in projected revenues stems primarily from the lower individual income tax rates that the tax act has put in place for much of the period. Projected outlays are higher mostly because the other two pieces of legislation will increase discretionary spending. Those revenue reductions and spending increases would result in larger deficits and thus in higher interest costs than CBO previously projected." Thanks for the completely unsourced editorial from a really trash biased source, but it definitely requires that you don't read a single word from the CBO report.
- ajross 8y ago
  You're citing an IBD article (yeah, the one with "It's official!" in its title) which is inferring stuff from CBO, which doesn't claim that $440M at all in the link you posted. You get it by playing games with revenue and attributing every single dollar of the change to "the tax cut". That's not economics. Tax policy never is, but this is especially bad work.
- allenz 8y ago
  To arrive at $440 billion, IBD argues that the tax plan cut tax revenue by $1.69 trillion but caused GDP growth producing $1.1 trillion in new revenue. However, the $1.69 trillion figure already factored in GDP growth, so they double counted.[1] I'm surprised that they made such a basic mistake. You should read less IBD and more NYT. [1] CBO Appendix A, page 93: "Legislative changes... led CBO to increase its projection of the cumulative deficit over the 2018–2027 period by $2.7 trillion. Those changes were offset in part by the effects of revisions to CBO’s economic forecast, which led to $1.0 trillion in reductions to projected deficits, almost entirely because of increased projections of revenues."
ajross 8y ago
No, from the perspective of the federal budget (c.f. Treasury and IRS, the entities "worried" here) it will absolutely decrease revenue and "further balloon the cost of the tax cuts". It's true that the loss would be to the states' tax revenue and not the taxpayers, but I don't see why that merits the kind of spin you're trying.
- candiodari 8y ago
  Yeah. The truth is that before, local and state governments could effectively carve out their tax revenues out of the federal government's tax revenues, with limited impact on what their constituents would pay in total tax. That ended with this tax cut. So now these states have a choice : either their constituents are actually made to pay for the budgets of these governments (much more so than before, at least), or they limit their spending to the value of the SALT deduction. What spin you want to put on this, feel free to do it, but let me give you some ideas. "Federal government no longer to pay for California/Illinois/... pensions !" "States now responsible for the money they spend" Or, how about: "Federal government imposes massive budget cuts on democratic governments !" "Costs of Trump tax cut unilaterally imposed on state governments !" They're all true, sort of.
- dv_dt 8y ago
  For one, those states were already net positive contributors to the Federal budget - they gave more revenue than they received in benefits. Personally I don't mind kicking in more tax revenue to the commons when it's something that benefits everyone, but to fund corporate tax cuts on companies which already give too little as a whole, as well as other states which lower their taxes to give even more to those companies is counterproductive for the nation as a whole.

drak0n1c 8y ago

Additionally, the CBO recently recalculated the long-term cost of the tax cuts to be $440 billion due to the changes in economic growth after the tax cuts came into effect. The NYT article is ignoring the more recent $440b April estimate in favor of citing the trillion dollar December estimate. https://www.cbo.gov/publication/53651 https://www.cbo.gov/publication/53651 https://www.investors.com/politics/editorials/trump-tax-cuts-revenues-deficits-paying-for-themselves/ https://www.investors.com/politics/editorials/trump-tax-cuts...

selectodude 8y ago
"For the 2018–2027 period, CBO now projects a cumulative deficit that is $1.6 trillion larger than the $10.1 trillion that the agency anticipated in June. Projected revenues are lower by $1.0 trillion, and projected outlays are higher by $0.5 trillion." "Laws enacted since June 2017—above all, the three mentioned above—are estimated to make deficits $2.7 trillion larger than previously projected between 2018 and 2027, an effect that results from reducing revenues by $1.7 trillion (or 4 percent) and increasing outlays by $1.0 trillion (or 2 percent). The reduction in projected revenues stems primarily from the lower individual income tax rates that the tax act has put in place for much of the period. Projected outlays are higher mostly because the other two pieces of legislation will increase discretionary spending. Those revenue reductions and spending increases would result in larger deficits and thus in higher interest costs than CBO previously projected." Thanks for the completely unsourced editorial from a really trash biased source, but it definitely requires that you don't read a single word from the CBO report.
ajross 8y ago
You're citing an IBD article (yeah, the one with "It's official!" in its title) which is inferring stuff from CBO, which doesn't claim that $440M at all in the link you posted. You get it by playing games with revenue and attributing every single dollar of the change to "the tax cut". That's not economics. Tax policy never is, but this is especially bad work.
allenz 8y ago
To arrive at $440 billion, IBD argues that the tax plan cut tax revenue by $1.69 trillion but caused GDP growth producing $1.1 trillion in new revenue. However, the $1.69 trillion figure already factored in GDP growth, so they double counted.[1] I'm surprised that they made such a basic mistake. You should read less IBD and more NYT. [1] CBO Appendix A, page 93: "Legislative changes... led CBO to increase its projection of the cumulative deficit over the 2018–2027 period by $2.7 trillion. Those changes were offset in part by the effects of revisions to CBO’s economic forecast, which led to $1.0 trillion in reductions to projected deficits, almost entirely because of increased projections of revenues."

ajross 8y ago

No, from the perspective of the federal budget (c.f. Treasury and IRS, the entities "worried" here) it will absolutely decrease revenue and "further balloon the cost of the tax cuts". It's true that the loss would be to the states' tax revenue and not the taxpayers, but I don't see why that merits the kind of spin you're trying.

candiodari 8y ago
Yeah. The truth is that before, local and state governments could effectively carve out their tax revenues out of the federal government's tax revenues, with limited impact on what their constituents would pay in total tax. That ended with this tax cut. So now these states have a choice : either their constituents are actually made to pay for the budgets of these governments (much more so than before, at least), or they limit their spending to the value of the SALT deduction. What spin you want to put on this, feel free to do it, but let me give you some ideas. "Federal government no longer to pay for California/Illinois/... pensions !" "States now responsible for the money they spend" Or, how about: "Federal government imposes massive budget cuts on democratic governments !" "Costs of Trump tax cut unilaterally imposed on state governments !" They're all true, sort of.
dv_dt 8y ago
For one, those states were already net positive contributors to the Federal budget - they gave more revenue than they received in benefits. Personally I don't mind kicking in more tax revenue to the commons when it's something that benefits everyone, but to fund corporate tax cuts on companies which already give too little as a whole, as well as other states which lower their taxes to give even more to those companies is counterproductive for the nation as a whole.