GOP Sets Table For Eliminating Deduction of State and Local Taxes

mfpark

Gee, this is such a winner for New Jersey!  For some reason Rodney Frelinghuysen, my Representative, won't return a call or email asking if he supports doubling or tripling my federal taxes.  Oh, right, tax reduction only matters if you are really really wealthy, like Rodney.


Like  1 Like
yahooyahoo

Many people in NJ are totally f#cked if this passes.  And I'm not counting what it will do to home values.


Like  
ml1

it this passes, it might be the last straw for GOP House members in NY, CA, MA, NJ, etc.  Even the people in Monmouth County might vote for Democrats if they get screwed over this bad.


Like  
BG9

What's important to them is the estate tax removal. I wonder how many in congress will benefit? Their very rich patrons certainly will. And a corporate tax rate reduction. A reduction written for the 1% and corporations.

During the Obama era they whined about budget deficits. Many then wanted to kill extended unemployment benefits due budget "concerns."

Budget "concerns" no longer matter.

This will blow holes in budgets as we've never seen before. The stupid will be told that this tax "cut" will benefit them, leading to a super economy raising so much revenue that there won't be a deficit. Sure, and in 2020 we'll elect a Unicorn as president.

To some degree the deficit will be reduced by hitting the middle class. No more local tax deductions and the removal of the personal deduction. The standard deduction will go up but that won't make up for the deduction losses to be incurred by the middle class. And why not? Just another burden added to the backs of the middle class.


Like  
BG9


ml1 said:

it this passes, it might be the last straw for GOP House members in NY, CA, MA, NJ, etc.  Even the people in Monmouth County might vote for Democrats if they get screwed over this bad.

We'll see. I wouldn't count on the Republicans being voted out in 2018.

It actually has to hit people in their pocket books for many to realize. If this "cut"  does not take effect until tax year 2018, they won't see how hard they are hit until 2019 after the congressional elections when they do their taxes. We can hope many will then wake up. 


Like  
mfpark


BG9 said:

 Sure, and in 2020 we'll elect a Unicorn as president.


Well, we elected an intellectual eunuch in 2016.  


Like  1 Like
Eric

Unfortunately I think you are right BG9.  The only way they don't get elected or re-elected is if by some chance it passes before the elections. 

The only out is for the Dems to negotiate here.  We would have to give up something else they want to get this taken off the plate.

Problem is - what would/could we give up that won't be as bad, yet big enough for the Republicans to take it out of the tax plan? 

One of them needs to do the math using real numbers, showing several scenarios, and advertise it everywhere they can starting NOW.

I believe there are a bunch of Republicans that don't realize the actual impact this overall plan will have on them. 


Like  
BG9


EricBurbank said:

Unfortunately I think you are right BG9.  The only way they don't get elected or re-elected is if by some chance it passes before the elections. 

The only out is for the Dems to negotiate here.  We would have to give up something else they want to get this taken off the plate.

I don't think they have the power to negotiate. The Republicans changed the rules so that the tax reform bill cannot be filibustered. It will only take 51 senate votes to get it passed.

https://www.usnews.com/news/the-report/articles/2017-10-20/gop-locks-in-reconciliation-to-box-out-democrats

To get the middle class to even pay more, Republicans are thinking of severely limiting 401K's to $2,400 a year from the current 18,000.

WASHINGTON — House Republicans are considering a plan to sharply reduce the amount of income American workers can save in tax-deferred retirement accounts as part of a broad effort to rewrite the tax code, according to lobbyists, tax consultants and congressional Democrats.
...
Rumors have circulated for months that negotiators were debating including a cap as a way to help offset the revenue loss from a reduction in business tax rates that Republicans have put at the center of their plan. Reducing contribution limits would be, in effect, an accounting maneuver that would create space for tax cuts by collecting tax revenue now instead of in the future.

https://www.nytimes.com/2017/10/20/us/politics/republicans-tax-401-k.html


Like  
Runner Guy

It's also interesting that Democrats from low-tax states voted to keep the SALT deduction (eg, Nelson from FL, Coons & Carper from DE, Donnelly from IN, Hassan and Shaheen from NH) and Republicans from high-tax states voted to eliminate it (There aren't as many, but Rob Portman from OH, Kennedy & Cassidy from LA are a couple of examples).

Many Senators are voting against their own state's interests in an effort to do what they see is in the national interest OR is part of a partisan long-game.


Like  
Philip

Eliminating SALT is running pretty rough-shod over the idea of federalism, imho. 

It also seems to me a bit of a mirror image of the Obama administration's initiative on medicaid expansion. SCOTUS ruled that to be unconstitutionally coercive. I don't know if this GOP moves crosses the same legal lines in fact, but it certainly does in spirit, and in a cruel and malicious way. While the medicaid expansion used the weight of the federal government to push for greater services for people, the GOP here is bringing the weight of the government to bear to try and force states to curtail services.


Like  
cramer

45% of NJ tax filers take the state and local tax deduction. 



Like  
Eric

That's great, now the reps can twist it by saying not even half of your residents use it.  They won't mention how hard of a hit it will be on the ones who do take the deductions. 


Like  
yahooyahoo

http://www.cnn.com/2017/10/25/politics/tax-reform-budget/index.html

"Threatening the GOP's top priority of passing major tax reform, Republican Rep. Tom MacArthur warned Tuesday night that so many House Republicans are frustrated with plans to nix a popular deduction, they could block the budget this week.

"I haven't done a whip count, but yes, I think there's enough," the New Jersey congressman told reporters.
Meanwhile, Republican leaders, who can afford to lose only 22 members of their caucus, are scrambling to find a solution that would get enough Republicans on board to move forward with the budget, which is considered the first step in tax reform.
The Republican tax reform framework proposes eliminating the State and Local Tax deduction (SALT), a popular tax break that affects nearly one-third of filers, letting them deduct levies like state income taxes and property taxes. It's been in place since the birth of the federal income tax in 1913.

    About 30 GOP members represent districts that heavily rely on the deduction, and if they stick together they could derail the resolution."




    Like  
    ml1


    yahooyahoo said:

    http://www.cnn.com/2017/10/25/politics/tax-reform-budget/index.html

    "Threatening the GOP's top priority of passing major tax reform, Republican Rep. Tom MacArthur warned Tuesday night that so many House Republicans are frustrated with plans to nix a popular deduction, they could block the budget this week.

    "I haven't done a whip count, but yes, I think there's enough," the New Jersey congressman told reporters.
    Meanwhile, Republican leaders, who can afford to lose only 22 members of their caucus, are scrambling to find a solution that would get enough Republicans on board to move forward with the budget, which is considered the first step in tax reform.
    The Republican tax reform framework proposes eliminating the State and Local Tax deduction (SALT), a popular tax break that affects nearly one-third of filers, letting them deduct levies like state income taxes and property taxes. It's been in place since the birth of the federal income tax in 1913.

    About 30 GOP members represent districts that heavily rely on the deduction, and if they stick together they could derail the resolution."

    it's a hard sell to ask GOP reps to vote for "tax cut" that raises taxes on most of their constituents.  If 45% of NJ taxpayers overall take that deduction, I've got to believe it's a lot more than that in MacArthur's district. 


    Like  
    Michael

    My guess is they will compromise with a limit on the amount of the state and local tax deduction.  Somewhere around 10,000.  Just enough to sway the districts where that will cover most of their constituents and still stick it to heavy democratic districts in northern NJ, NYC, etc.  And then they can say --- see we are increasing taxes on the rich.  


    Like  
    ml1


    mikescott said:

    My guess is they will compromise 

    the right wing of the GOP doesn't do compromise, even with other Republicans.


    Like  
    FilmCarp

    The flip side of the coin is that they claimed that this was necessary to offset the tax cuts for the wealthy.  So, when they back down on this particular cut, and the 401k cap, they will be passing a tax cut with no offset, increasing the debt.  So much for fiscally prudent Republicans.


    Like  
    DaveSchmidt


    FilmCarp said:

    So, when they back down on this particular cut, and the 401k cap, they will be passing a tax cut with no offset, increasing the debt.

    Wouldn’t they need 60 votes in the Senate to do that, rather than the 50 (plus Pence) to pass a deficit-neutral plan?


    Like  
    RobB


    DaveSchmidt said:



    FilmCarp said:

    So, when they back down on this particular cut, and the 401k cap, they will be passing a tax cut with no offset, increasing the debt.

    Wouldn’t they need 60 votes in the Senate to do that, rather than the 50 (plus Pence) to pass a deficit-neutral plan?

    Not once you bake in the 60183728% growth figure associated with the tax cut. 


    Like  1 Like
    mfpark


    DaveSchmidt said:



    FilmCarp said:

    So, when they back down on this particular cut, and the 401k cap, they will be passing a tax cut with no offset, increasing the debt.

    Wouldn’t they need 60 votes in the Senate to do that, rather than the 50 (plus Pence) to pass a deficit-neutral plan?

    I think the issue is not deficit-neutral but being able to be passed as a unanimous joint congressional resolution, meaning that so long as the House agrees 100% with the Senate plan then it is a done deal with no Democratic input whatsoever.

    That is why MacArthur coming out against the Senate plan eliminating SALT deductions might just kill the entire deal.


    Like  
    Michael

    and while they are busy cutting taxes, let's raise some fees.  

    https://www.yahoo.com/news/us-considers-higher-entry-fees-17-popular-national-214119483.html


    this is on top of just increasing the lifetime fees.  

    expect a lot more if this tax bill passes.  they will nickel and dime us to death.  


    Like  
    Sally


    mikescott said:

    and while they are busy cutting taxes, let's raise some fees.  

    https://www.yahoo.com/news/us-considers-higher-entry-fees-17-popular-national-214119483.html





    this is on top of just increasing the lifetime fees.  

    expect a lot more if this tax bill passes.  they will nickel and dime us to death.  

    I recently traveled to a bunch of National Parks and other NPS sites and the admission fees were $20-30 per car.  We would have spent well over $200 on admissions but for my parents-in-law's lifetime passes.  


    Like  
    Gary

    And how much would you have spent to go to Disney World?


    Like  
    Sally


    Burner said:

    And how much would you have spent to go to Disney World?

    We wouldn't have gone to Disney World at this stage.  And you really can't compare the two types of destinations.  (I also think that Disney World prices are out of control, but that's for a different thread.)


    Like  
    RobB

    Yellowstone is $30 per car...per week


    Like  
    Sally

    I think much of my annoyance is that they do these things in such huge increments (and no doubt long overdue.)  Like going from $10 to $80 on the lifetime passes.  $80 is still a bargain (and if they keep the $80 annual pass the same, then that would handle my issue with the increased single admissions), but doing a huge increase like this is not very customer-friendly. 

    Further to comparison with Disney World, for National (and State, etc.) parks, admission is simply to get through the gate.  You still have to pay for lodging and often individual attractions within the parks.  Traditionally, park admissions have been relatively low, allowing access to most people, whether they would then spend a lot of money on hotel accommodations or economize by camping.  This change is one more hit at the lower income folks (who also deserve to have a vacation once in awhile.)


    Like  
    Tom

    Disney World belongs to the Disney Corporation. The National Parks belong to us. 


    Like  3 Likes
    yahooyahoo

    I don't think you can compare admission to an amusement park run by a for-profit corporation with a publicly-owned national park.

    sac said:



    Burner said:

    And how much would you have spent to go to Disney World?

    We wouldn't have gone to Disney World at this stage.  And you really can't compare the two types of destinations.  (I also think that Disney World prices are out of control, but that's for a different thread.)



    Like  
    Michael

    Exactly!!  we pay taxes to support these parks.  


    tom said:

    Disney World belongs to the Disney Corporation. The National Parks belong to us. 

    Like  
    Runner Guy

    FYI... Tom MacArthur is still predicting the SALT deduction will be preserved. He said the House's vote was just to keep the package moving.

    “We’re seven or eight innings into this and we don’t have a deal yet,” MacArthur said.

    But he said there is still enough GOP opposition to stop the tax bill if a deal isn’t reached on the deduction. He said many lawmakers voted “yes” just to keep the process rolling on the top priority for President Trump and the GOP.

    “Twenty people voted no, and dozens of others voted yes holding their nose, so leadership I think knows clearly that if we don’t get this resolved we can’t move forward on tax reform,” MacArthur said. He said some of those dozens included Pennsylvanians from outside Philadelphia.
    http://www.philly.com/philly/news/politics/state-local-deduction-pa-nj-tax-break-macarthur-lobiondo-meehan-costello-20171026.html

    Like  

    In order to add a comment – you must Join this community – Click here to do so.

    Sponsored Business

    Find Business

    Featured Events