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As a personal point, my taxes went up $18K because of this change. It is my personal belief that the change in the tax code here was specifically targeted blue
by myrandomcomment 8y ago
As a personal point, my taxes went up $18K because of this change. It is my personal belief that the change in the tax code here was specifically targeted blue states for political reasons by the republicans. My wife and I are thinking about leaving after the kid finishes school. The interesting thing is the long term consequences might be that enough people leave NY and CA and move to traditional red states to change them to blue. To be clear we were already thinking about moving before this change. This just add one more reason.
- jayess 8y agoSo you're upset that you have to actually pay the high taxes you voted for, and because of that, you want to move to a low-tax state to vote for the same policies, because you're bitter about having to pay the taxes you voted for? F that. Stay in your high-tax state and deal with the consequences of your own decisions.
- myrandomcomment 8y agoI have paid millions in taxes over the years and I have no issue doing so. What I take issue is that this change in the tax code was only done as a punishment by those in power against those with a different set of political belief. That is the fundamental issue here. We are bring our country down with this system of politics that has become so toxic that you do not see the person you disagree with politicly as anything more than someone to be crushed. (The venom of your comment is an example). The founding fathers (one of which I am a direct descendant of) very much believed in civil discourse and using the right people for the right job. Washington appointed people he very much disliked because they were the expert the job needed, outside of his personal or political views. Up until the time of Newt Gingrich who is somewhat responsible for this current environment, our representatives in general understood the art of the compromise. Personally I tend to be a libertarian and want the government out of most things. However I do except that fact that some form of taxes are a necessary thing in for any country to exist. I would like to see them line up in a more fair way, flat taxes on all income over a given amount, VAT for non-food, non-essential items, etc. Most of the way we tax is broken. A prime example in CA is property taxes. When my family and I moved last, our search for a home was limited to 5 parts of the Bay Area because of schools. If you want your kid to go to a great school, buy in a rich area as the schools are funded by property taxes. Seems to me it would be better to share that money equally across the state. It would help uplift everyone. Edit: spelling
- masonic 8y agothis change in the tax code was only done as a punishment by those in power Well, the original structure with SALT being deductible was put in place by the other party in the first place and stayed that way for a century. And even the newly changed limit to $10K retains the benefit for the vast majority.
- jeffbax 8y agoThe tax code is broken, but it's not due to reducing the distortions that have broken it. SALT, mortgage interest etc should all go away. They're subsidies to the wealthiest. The tax law was good for bringing the corporate tax back to competitive global levels, good for doing what it can to fix distortions, and bad for lowering the top income bracket in an age of $22T debt (though you'd probably be surprised at the amount of high tax EU welfare countries that use a flat tax, and better tax luxury which should be the real goal, not income in the first place) Maybe if enough blue state workers (of which I am one) start to feel the implications of their voting records, we can start to have the overdue conversation on how and what we spend on. * also speaking from a generally libertarian angle
- gtaylor 8y agoThis! We may end up back in NC eventually, which has gone both ways in recent memory. Would be happy to try to help restore sanity to what used to be the more moderate of the Carolinas.
- myrandomcomment 8y agoIt could put Texas, Nevada, Florida in play. The fact is that the very very rich do not notice. The well off (upper-middle to rich) are truly effected and they will be the ones that move. Those types also tend to be those that contribute to community change efforts, campaign funding and are politicly active. It is clear that the over all demographic of the USA is changing to one of less conservative, more diversity thinking (I am making no judgement on this). The election of Trump was clearly reaction to that change. Despite some of the efforts to slow or halt the change by the more conservative members of the USA, this is not a trend that can be stopped. The fact of the matter is that even the conservative Supreme Court, when faced with the weight of history, and the choice between "open" or "closed", has come down on the side of the most "open" view. We live in interesting times.
- acdha 8y agoI’d also be curious how it impacts fundraising - places like Orange County were major Republican resource pools even if they couldn’t carry the entire state. People don’t need to stop voting for their party just to write fewer checks if they’re feeling neglected.
- akhilcacharya 8y agoAnd partly because of the SALT fiasco, Orange County isn't sending any Republicans to congress this year. It was a remarkable turn since the '80s.
- acdha 8y agoIt was stunning. I don’t know how permanent it is but I certainly wouldn’t have predicted it even a couple of years earlier.
- darawk 8y ago> It is my personal belief that the change in the tax code here was specifically targeted blue states for political reasons by the republicans While this is definitely true, as someone who also lives in a high tax state and is impacted by this change, it is the policy-wise correct way to do taxation. Under the old system, state goverments, by enacting an income tax of their own, could essentially steal part of the federal government's tax revenue. There's really no good reason for this. State government's revenue collection shouldn't funge against the federal government's revenue collection. While I don't like the higher tax burden I think from a federal policy perspective it was the correct move. I'd like to see the states lower their taxes, or switch to a tax scheme other than an income-based one in response, but I wouldn't want to see this change repealed. Unfortunately for my personal finances, it was the right thing to do, even if the motivation on the part of the republicans was as a "fuck you" to blue states.
- BurritoAlPastor 8y agoWhere do the states get money to operate, if not taxes?
- darawk 8y agoI'm not saying states shouldn't levy taxes. I'm saying that state taxes shouldn't diminish federal taxes. Under the old system, if your home state charged say, a 10% income tax, that would reduce your federally taxable income by 10%. That means that states could essentially eat a chunk of the revenue that would otherwise have gone to the federal government.
- vmarsy 8y ago> specifically targeted blue states It seems that that law target high-state-tax states instead? WA and TX seem equally affected, and I'd say one of them is blue, one of them is red. Assuming the source of income didn't change much compared to 2017, what's important is to look at the effective tax rate change, (i.e 18k on a 60k income would be very different than 18k on a 300k income)
- qkachoo 8y agoAre you referring to the state of Washington or DC? I am pretty sure Washington state has no state tax. They just have high sales tax.
- vmarsy 8y agoWashington state. Both Texas and WA state have no state income tax. They have higher than average sales and property tax, these are still state tax which are deductible under SALT. The point is they have a similar state tax system, but one is a blue state, the other is red. They both have in common a relatively low overall state tax compared to CA/NY.
- mrfredward 8y agoThe SALT deduction only helped people who itemize, so it was primarily high earners who benefited. Furthermore, a deduction on property taxes helps people with high property taxes, so the biggest benefit goes to people with high property values in wealthy communities. So the SALT deduction made funding public schools and maintaining schools less burdensome...in wealthy areas, but did nothing for the poorest communities. Of course the GOP supported it because it helped their constituents at the expense of blue states, but on the other hand...why do you think Democrats were so opposed to removing a deduction that benefited the haves over the have-nots?
- r00fus 8y agoDo you consider anyone owning a house in a large-ish city to be "high earners"? All so Trump could give away the tax dollars to extremely-high income earners. A real transfer of wealth from the middle-class to the ultra-rich.
- telotortium 8y agoYes, I do. Unfortunately, only the (high) upper middle class and upper class can afford to purchase a house today in those cities. They should still be considered high-income for the purposes of taxation. It's not the federal government's fault California is so unaffordable.
- jandrese 8y agoI thought that most people with a mortgage itemized last year, because that mortgage interest deduction is huge until you're close to paying off your house. This isn't just high earners, it's the middle class. The GOP tax bill squeezed the middle class to give that huge absolute percentage reduction to people at the very top. From a macroeconomic standpoint this is madness. We're taking money away from the people who really drive the economy and giving it to the ones who are already struggling to find a place to stash all of the money that 30 years of supply side economics have burdened them with. A middle class family would have bought goods and services, a billionaire is looking for any investment opportunity that hasn't been completely diluted by the enormous amount of capital floating around and is going to have to stick it in some "financial instrument" that we're only going to learn about when it causes the next financial catastrophe.
- dragonwriter 8y ago> It is my personal belief that the change in the tax code here was specifically targeted blue states for political reasons by the republicans. That was fairly overt in Trump's support, but the broader right wing interest is in putting the federal thumb on the scale to discourage state taxes and spending, targeting liberal policy even where liberal politicians remain dominant.
- Causality1 8y agoYou can't turn a red state blue by moving wealthy people into it. There's not enough of you. Only 9% of Americans make over 100K a year. Only 2% make over 200K.
- jandrese 8y agoIsn't this what is happening to Virginia? The Northern Virginia area has started to overpower the other 90% of the state politically and is turning it blue.
- smileysteve 8y agoWelcome to Georgia, the 6th district flipped last year and we were extremely close to having our first Democrat Governor in 15 years.
- electricslpnsld 8y agoIn PA the 2016 presidential elections went Trump by roughly 1% of the pop (~50K votes). That is roughly the number of employees Amazon was floating during their HQ2 search. Some minor demographic shifts could easily account for a 50K swing. As another example, NC elected a democratic governor by 10K votes. These are slim margins that can drastically tip the balance of power in local and federal politics!
- citilife 8y ago> The interesting thing is the long term consequences might be that enough people leave NY and CA and move to traditional red states to change them to blue I think it's more that blue states tend to offer more social welfare and thus higher taxes. Texas for instance has no state income tax, so wouldn't be impacted regardless.
- brewdad 8y agoTexas has high property taxes and high sales taxes. Both are capped under SALT the same as income tax. Texas is very much impacted.
- dragonwriter 8y agoBecause the cap is on total dollar value and not on rates, degree of impact is loosely proportional to tax rates × per capita tax base. Or, more simply, per capita state and local tax revenue. High rates alone don't mean you are impacted. Texas is below the national average (at least as of 2015); they are, therefore, less impacted than most states. https://www.taxpolicycenter.org/statistics/state-and-local-tax-revenue-capita https://www.taxpolicycenter.org/statistics/state-and-local-t...
- dragonwriter 8y ago> I think it's more that blue states tend to offer more social welfare and thus higher taxes. Because the cap is a per capita dollar cap, not a rate cap, it mostly hits states that are wealthy, as aggregate tax rates (share of economy taxed) between states vary less than per capita size of the economy.
- zaroth 8y ago$18k in taxes from a deduction being capped at $10k assuming a 40% marginal rate means you are saying you lost out on $45k in deductions. If you’re paying $55k in SALT then two immediate questions become; 1) Is this extra $18k your “fair share” , and/or 2) why as a matter of policy should the Fed be deducting $18k off your bill because of $55k in SALTs? And good god that’s a fuck ton of state and local taxes. Taxes really are the worst, I find it’s much better just not earning or spending any significant money to begin with.
- refurb 8y agoI have a bit of a bone to pick with this "Red State" and "Blue State" stuff. Yes, states like CA and NY are solidly democratic, but it's not like there aren't any Republicans there. 30% of California voters voted for Trump. The 2012 presidential election was 37%. If the purpose of the tax changes was to hurt Democratic states, they certainly hurt a lot of Republicans in the process.
- masonic 8y agoRepublicans are powerless in CA. Democrats control all three legs of the stool and have supermajorities.
- jjtheblunt 8y agoOr they move to traditional red states and assimilate as newly awakened reds?
- masonic 8y agoThat was the more typical pattern for 1995-2016.
- kgwgk 8y ago> enough people leave NY and CA and move to traditional red states to change them to blue It’s amusing that people move to another state to pay less taxes and then vote to have their taxes raised...
- _archon_ 8y agoThis is a matter of perspective. If you think of taxes as a burden you undertake because you're legally obligated to, then this behavior is indeed silly. I've recently realized another perspective which makes this extremely sensible behavior: Taxes are the price you pay to have the baseline of civilization around you so you can live your life. If you're an hourly worker, you go to work in the morning, spend a couple hours earning society, spend more hours earning your expenses, spend some time earning savings, and head home for the day. You drive your car home on your taxes, you go to the grocery and pharmacy for things which are safe due to your taxes, you visit your elderly relatives who aren't in abject poverty because of your taxes. If you want low taxes, you can get them! Just move to a place where you're buying less society. Turns out that people who can afford nice things tend to not want to live in lesser society. After they do the math, they generally decide that the tax hit is worth its cost, and they live in civilization. It's a self-reinforcing cycle.
- wan23 8y agoI have arguments against this coming from a few directions. 1) States have historically taken precedence over the federal government when it comes to taxes. It was explicitly written in the constitution that something like the federal income tax was forbidden, which is why the sixteenth amendment exists. The reason for that is that people were worried about double taxation of the type that now exists. Supporters of the federal income tax were like, "nah, that would be dumb don't worry about it!" and included the SALT deduction which has existed the entire time that federal income taxes have been a thing until now. 2) State and local taxes pay for things that benefit everyone. Maybe where you live there isn't a homeless problem, but it might be because your city has a program to ship people to California. Or maybe you recently ordered something on Amazon that came from overseas. It probably stopped at a port run by a local agency. And it sure would be embarrassing for America if something bad happened at the UN. Thank the NYPD for that. 3) There are multiple layers of government, but in the end to an individual it's just "the government". Philosophically it's weird that the government can end up taxing you more than 100% on a technicality. Rather than the repealing the SALT deduction, they could have just increased the tax rate. Any state that felt like it could have implemented its own income tax, which hopefully they would have used to take some burden off of the federal government anyway.