The GOP Tax Reform/Cuts Plan
The personal exemption was eliminated. Are you referring to the standard deduction?
maps said:
ok, I talked to my accountant and he seemed to think that I will save money on taxes despite the $10K limit on state taxes due to the increase in the personal exemption, decrease in the fed rate and the child credit.
FYI for those looking to pre-pay your state income tax I just received this alert:
Prepayment provision. For tax years beginning after Dec. 31, 2016, in the case of an amount paid in a tax year beginning before Jan. 1, 2018 with respect to a State or local income tax imposed for a tax year beginning after Dec. 31, 2017, the payment will be treated as paid on the last day of the tax year for which such tax is so imposed for purposes of applying the above limits. (Code Sec. 164(b)(6), as amended by Act Sec. 11042) In other words, a taxpayer who, in 2017, pays an income tax that is imposed for a tax year after 2017, can't claim an itemized deduction in 2017 for that prepaid income tax.
Looks like they removed the ability to pre pay your income tax. This is the first I've heard of this exception. It doesn't appear to apply to property taxes, only income taxes.
Edited to add - this was included in the language of the final Bill from this weekend. It survived in the tax law.
yes, mentioned earlier or in another thread. 2018 Property taxes can still be pre-paid and deducted in 2017.
conandrob240 said:
yes, mentioned earlier or in another thread. 2018 Property taxes can still be pre-paid and deducted in 2017.
Thanks. Been focused so much on the corporate stuff I missed this one.
I know this editorial won't persuade anyone angry about the tax bill to change his or her mind, but if anyone wants an insight into how many NJ conservatives feel about tax changes that negatively affect them, this op-ed is worth reading.
Most NJ conservatives are pissed at the Trenton establishment for creating the country's highest taxes in the first place, not Trump, Ryan, and McConnell for now increasing taxpayers' exposure to those high taxes.
PS I know that NJ Republican support for the tax bill won't be enough to keep NJ's Republicans on the federal, state, and local level in office. Democrats are pissed off enough at the national Republicans that they are going to take out their anger at anyone politician with an R by his/her name. (angry Republicans do the exact same thing to state and local Democrats too.)
Runner_Guy said:
I know this editorial won't persuade anyone angry about the tax bill to change his or her mind, but if anyone wants an insight into how many NJ conservatives feel about tax changes that negatively affect them, this op-ed is worth reading.
you're right it won't persuade me. The problem with NJ conservatives is that their POV is very myopic. They look at their own tax bill and don't consider the larger context. You'd think conservatives of all people would understand that you get what you pay for. In virtually every metric of quality of life in U.S. states, the high tax states tend to be near the top and the low tax states are near the bottom. The high tax states tend to be wealthier, healthier, better educated, safer and even happier. I know you have pointed out specific areas in which NJ doesn't get full value in you opinion for the cost. But overall, NJ's residents do better on quality of life metrics across the board. And the reason should be obvious. The private sector does many things well. But it doesn't provide for the greatest number of people on unprofitable endeavors like educating kids or building roads.
There is no free lunch. There is no magic fairy dust that creates revenue out of thin air. If we want to be healthier and better educated, it takes a higher tax rate. And anyone who suggests we can have a free lunch is lying or delusional.
ml1 said:
Runner_Guy said:
I know this editorial won't persuade anyone angry about the tax bill to change his or her mind, but if anyone wants an insight into how many NJ conservatives feel about tax changes that negatively affect them, this op-ed is worth reading.
you're right it won't persuade me. The problem with NJ conservatives is that their POV is very myopic. They look at their own tax bill and don't consider the larger context. You'd think conservatives of all people would understand that you get what you pay for. In virtually every metric of quality of life in U.S. states, the high tax states tend to be near the top and the low tax states are near the bottom. The high tax states tend to be wealthier, healthier, better educated, safer and even happier. I know you have pointed out specific areas in which NJ doesn't get full value in you opinion for the cost. But overall, NJ's residents do better on quality of life metrics across the board. And the reason should be obvious. The private sector does many things well. But it doesn't provide for the greatest number of people on unprofitable endeavors like educating kids or building roads.
There is no free lunch. There is no magic fairy dust that creates revenue out of thin air. If we want to be healthier and better educated, it takes a higher tax rate. And anyone who suggests we can have a free lunch is lying or delusional.
I don’t think that there are necessarily more self-interested Republican voters than there are Democratic voters. I think that most people vote based on a sense of national interest and justice, although partisans have wildly different ideas on what that national interest and justice are. Sometimes when people vote GOP even out of self-interest, it may be cultural self-interest, and not not be economic self-interest.
As we see every election, not all Republican voters are high-income, hence Republicans dominant many of the lowest income counties and states in the US. Republican voters in Louisiana know that the Republican party will shower favors on Wall Street, but they vote Republican anyway probably because of a sense that Republican politicians don’t look down on them.
Hillary Clinton, in her book “What Happened” explained low-income Republican vote this way. “People in Arkansas who vote Republican know that the Republicans won’t do anything _for_them, but they know that the Republicans aren’t going to to anything _to_ them either.”
Hillary later quoted an Arkansas person saying “The Democrats are going to take my gun away and make me go to a gay wedding.”
Arlie Hochschild also had some interesting insights into the Republican coalition.
https://www.vox.com/2016/9/6/12803636/arlie-hochschild-strangers-land-louisiana-trump
There is also a pretty large minority of union members who vote Republican too. After Scott Walker gutted Wisconson’s public sector unions he still got over a third of the union vote in his recall election and 2014 reelection anyway. Even after the Republican party after 2012 became much more strongly anti-union and pro-voucher Donald Trump still got over a third of the NEA’s vote.
A low-income person or union member who votes Republican is not voting in his or her own narrow economic interest.
And sometimes even if someone does vote out of economic interest it isn't always unjustified. If a small business owner is tax tolerant and doesn't like Wall Street, but feels that Democratic ideas on a $15 an hour minimum wage, more regulations, more litigation exposure etc will wreck his or her business, is voting GOP so unjustified?
And, I do have to point out that not everyone who votes for the Democratic party is doing so for purely idealistic reasons. Many Democratic voters are net recipients of government largesse and we all know that public sector unions are a big part of the Democratic coalition.
I didn't mean to suggest I or anyone else is voting out of idealism. It's not idealism. I just think we should have good schools, decent health care, and that public employees deserve a good wage. And those things take money. And states with low taxes tend not to have those things. It's not that complicated. Stuff costs money.
Runner_Guy said:
There is also a pretty large minority of union members who vote Republican too. After Scott Walker gutted Wisconson’s public sector unions he still got over a third of the union vote in his recall election and 2014 reelection anyway. Even after the Republican party after 2012 became much more strongly anti-union and pro-voucher Donald Trump still got over a third of the NEA’s vote.
A few caveats: Like other attempts to quantify how different groups of people voted, the Wisconsin figures came from exit polling, which is not a particularly accurate barometer. In this case (the 2012 recall vote, at least; I couldn’t find the source for the 2014 election), the margin of error for the union demographic was somewhere north of plus or minus four percentage points. Also, the demographic was not union members specifically but, more widely, any member of a household that included a union member. More to the point, Walker’s intent from the start was to pit private sector unions against public sector unions — relevant context, it seems to me, when deciding what to make of whatever the union vote was.
The one citation I found for the NEA breakdown qualified it as early, preliminary data. Not stated was whether it came from exit polling, an internal questionnaire or some other source.
This study found that New Jersey gets back only $0.48 in Federal spending for each dollar of Federal taxes paid, the 4th-worst return in the country. The state government receives 26.87% of its funds from the Federal government, the 10th-worst in the country. Do conservative raise these issues when they complain about high NJ taxes?
http://www.businessinsider.com/the-states-the-most-and-least-dependent-on-the-federal-government-2015-7
Runner_Guy said:
I think that most people vote based on a sense of national interest and justice, although partisans have wildly different ideas on what that national interest and justice are.
Hillary later quoted an Arkansas person saying “The Democrats are going to take my gun away and make me go to a gay wedding.”
And, I do have to point out that not everyone who votes for the Democratic party is doing so for purely idealistic reasons. Many Democratic voters are net recipients of government largesse and we all know that public sector unions are a big part of the Democratic coalition.
I think most people equate their own self-interest, whether real or perceived, with the nation interest, consciously or sub-consciously.
If Hillary didn't make that quote up but actually heard it from someone I would suggest that someone who thinks Democrats want to confiscate all guns has succumbed to Right-Wing propaganda. No Democratic Politician has taken that extreme position. And, frankly, someone who believes that Democrats or anyone else can force him to attend a gay wedding, or I guess any wedding, to me is just plain stupid.
OTOH there are Republican politicians who want to take away my Medicare and there are some who would prevent me from attending a gay wedding by banning them.
As to the last paragraph I quoted you would have to define "government largesse". Are we talking about maintenance of Interstate Highways, Farm Subsidies, Tax Breaks for certain types of business or Medicaid? Other than the first I don't think "many" voters of either Party directly benefit. Mitt Romney seriously hurt his campaign by implying that 47% of the population was on some sort of Welfare and it has long been a Conservative meme that recipients of Welfare and Democratic politicians have a symbiotic relationship. From my experience the very poor are alienated from politics and have a low rate of voter participation.
As for unions since the 1930s the Democrats have been generally pro-Union and the Republicans pro-management. As to public sector Unions my memory is that it was the Republican Party that picked a fight with teachers Unions sometime in the 90s. And Police Unions tend to favor Republicans.
LOST said:
If Hillary didn't make that quote up but actually heard it from someone I would suggest that someone who thinks Democrats want to confiscate all guns has succumbed to Right-Wing propaganda. No Democratic Politician has taken that extreme position. And, frankly, someone who believes that Democrats or anyone else can force him to attend a gay wedding, or I guess any wedding, to me is just plain stupid.
From “What Happened”:
Bill told me about a particularly troubling conversation he had with an old friend who lived up in the Ozarks in northern Arkansas. He had become an endangered species in Arkansas — a still-loyal, progressive Democrat. Bill called and asked our friend if he thought two-term Senator Mark Pryor could be re-elected. ... Our friend said he didn’t know, and he and Bill agreed the best way to find out was to visit a certain country store deep in the Ozarks where a couple hundred people came out of the woods to buy food and talk politics.
When our friend got back, he called Bill and told him what the store owner had said: “You know, I always supported Clinton, and I like Mark Pryor a lot. He’s a good man and fair to everyone. But we’re going to give Congress to the Republicans.” The store owner was no fool. He knew the Republicans wouldn’t do anything for him and his neighbors. But he thought the Democrats hadn’t done anything, either. “And at least the Republicans won’t do anything to us,” he said. “The Democrats want to take away my gun and make me go to a gay wedding.”
According to wapo, If you are married with two kids living in NJ you will see a tax cut. There was no level of income or previous deductions in their calculator that showed an increase. If you're single, there are some levels that will see a tax increase.
https://www.washingtonpost.com/graphics/2017/business/tax-bill-calculator/?utm_term=.0ee52fb4682e
Runner_Guy said:
I know this editorial won't persuade anyone angry about the tax bill to change his or her mind, but if anyone wants an insight into how many NJ conservatives feel about tax changes that negatively affect them, this op-ed is worth reading.
Most NJ conservatives are pissed at the Trenton establishment for creating the country's highest taxes in the first place, not Trump, Ryan, and McConnell for now increasing taxpayers' exposure to those high taxes.
And their own party is part of the Trenton establishment. It hasn't been just Democrats raising taxes
maps said:
According to wapo, If you are married with two kids living in NJ you will see a tax cut. There was no level of income or previous deductions in their calculator that showed an increase. If you're single, there are some levels that will see a tax increase.
https://www.washingtonpost.com/graphics/2017/business/tax-bill-calculator/?utm_term=.0ee52fb4682e
in a "tax cut" bill why should anyone be seeing a tax increase?
ml1 said:
maps said:
According to wapo, If you are married with two kids living in NJ you will see a tax cut. There was no level of income or previous deductions in their calculator that showed an increase. If you're single, there are some levels that will see a tax increase.
https://www.washingtonpost.com/graphics/2017/business/tax-bill-calculator/?utm_term=.0ee52fb4682e
in a "tax cut" bill why should anyone be seeing a tax increase?
Depends on who get the tax cut. And how much they get.
Some will be paying more now. By 2025 a lot will be paying more but it won't be the corporations or the very rich. They keep their tax cut.
To those of you getting a tax cut now, enjoy the illusion. It is an illusion. The money to be borrowed to pay for your tax cut will have to be paid back, with interest.
There is no such thing as a free lunch.
this one is more detailed.
https://www.wsj.com/graphics/republican-tax-plan-calculator/
LOST said:
What if you have only 1 child?
What if you have five children?
And still there is the 1.5 trillion hole we hand to our kids. Theft.
People on MOL will not agree on the merits of capping the SALT deduction, but conservatives in high-tax states, it seems, still mostly support the SALT cap because they see their states' own high taxes as the problem.
The WSJ is published in New York and it is running an editorial calling the $10,000 limit a "gift to blue-state taxpayers."
https://www.wsj.com/articles/congresss-gift-to-blue-state-taxpayers-1514823290
If you take a helicopter to work what do you care about roads and bridges?
Runner_Guy said:
People on MOL will not agree on the merits of capping the SALT deduction, but conservatives in high-tax states, it seems, still mostly support the SALT cap because they see their states' own high taxes as the problem.
The WSJ is published in New York and it is running an editorial calling the $10,000 limit a "gift to blue-state taxpayers."
https://www.wsj.com/articles/congresss-gift-to-blue-state-taxpayers-1514823290
I can't read the article as I'm not a subscriber (not for any ideological reason - I think WSJ is a good paper, though this story is from their opinion column, the least interesting part of any newspaper imo). Assuming I'm guessing the argument correctly then -- that the $10k SALT deduction will lead to lower taxes -- what's the basis for this belief? Nationally we've seen that attempts to "starve the beast" only increase deficits and, at best, slow rather than reverse spending. Why would the dynamic be any different in the states?
I think the most likely outcome is that taxes stay about the same, but service deteriorates. We'll get less for the same amount of money. Nothing to celebrate there.
Runner_Guy said:
People on MOL will not agree on the merits of capping the SALT deduction, but conservatives in high-tax states, it seems, still mostly support the SALT cap because they see their states' own high taxes as the problem.
The WSJ is published in New York and it is running an editorial calling the $10,000 limit a "gift to blue-state taxpayers."
https://www.wsj.com/articles/congresss-gift-to-blue-state-taxpayers-1514823290
Since it was so important to point out "The WSJ is published in New York", you should note that it's not an editorial. It's an op-ed contributed by the head of something called "Job Creators Network". That organization was started by a founder of Home Depot, Bernie Marcus. There's no indication of any deep connection to NY or any other "blue" state. It's address locations are in Georgia and Texas. It lobbies across-the-board for, among other things, ACA repeal.
Ok. Good points here. I missed the address of the author's employer. The WSJ piece I linked to was not a good example of the point I was trying to make.
However, I think my point still holds that most conservatives in high-tax states support or accept capping the SALT deduction. The WSJ editorial board has supported the Republican tax cuts, despite the cap on the SALT deduction. The National Review is NYC published and it wants a total elimination of the SALT deduction. The City Journal, which is the organ of the Hudson Institute, has run several pieces against Andrew Cuomo's defense of the SALT deduction. Over in California, Reason, wants to reduce or eliminate the SALT deduction too.
I've seen a few arguments from libertarians and conservatives that the unlimited SALT deduction should be preserved because (in their opinion) it strengthens federalism, but I think that most conservatives are anti-SALT deduction even when the SALT deduction personally benefits them.
Since many conservatives living in high-tax states would not benefit from the SALT deduction because the standard deduction was better for them anyway or they hit the AMT, it's not always even a case of conservatives going against self-interest by supporting SALT deduction.
nohero said:
Runner_Guy said:
People on MOL will not agree on the merits of capping the SALT deduction, but conservatives in high-tax states, it seems, still mostly support the SALT cap because they see their states' own high taxes as the problem.
The WSJ is published in New York and it is running an editorial calling the $10,000 limit a "gift to blue-state taxpayers."
https://www.wsj.com/articles/congresss-gift-to-blue-state-taxpayers-1514823290
Since it was so important to point out "The WSJ is published in New York", you should note that it's not an editorial. It's an op-ed contributed by the head of something called "Job Creators Network". That organization was started by a founder of Home Depot, Bernie Marcus. There's no indication of any deep connection to NY or any other "blue" state. It's address locations are in Georgia and Texas. It lobbies across-the-board for, among other things, ACA repeal.
David Stockman doesn't sound like a big fan. I wish he'd tell us how he really feels though.
Yet the Trumpian-GOP has thrown every shred of fiscal rectitude to the winds at the absolute worse time in modern history. As we explained last week, the front-loaded tax bill will shrink the revenue base by $280 billion during FY 2019 to just $3.4 trillion.
At the same time, upwards of $200 billion in add-ons for defense, disaster relief, ObamaCare insurance bailouts, border control, veterans and law enforcement will drive spending to nearly $4.6 trillion or 20>#/strong### above Obama's outgoing budget of $3.85 trillion (FY 2016).
That's right. These GOP clowns have left Big Spending Barry in the dust, and that's before they get around to auctioning off votes for what the Donald is now flogging as a "bipartisan" infrastructure bill.
The latter will add hundreds of billions more to the borrowing tab. That's because the White House can't pass an infrastructure bill without a lot of Dem votes, and the latter will demand real pork in the appropriations barrel, not some kind of slight of hand tax-induced mobilization of so-called "private" capital (it's not "private" when it get mobilized by a tax incentive bribe).
In short, what was already a structural deficit of $700 billion will erupt into new debt issuance of $1.2 trillion----and perhaps well beyond that figure----commencing in October. At that very time, of course, the Fed will be dumping old bonds into the market at a $600 billion annual rate.
Yet to our knowledge, there was not a single mention of this pending epic bond market collision during the perfunctory Congressional debt on a bill that had no hearings and had not been read by the overwhelming majority of legislators when it was jammed through on Christmas Eve.
And that's why we describe the GOP's fiscal policy---among others---as unhinged rather than merely reckless or hypocritical. That is, Imperial Washington has been house-trained for so long by central bank money printing that it has no clue that it has actually participated in a giant financial fraud.
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I agree @lost, I read a Times article about a woman trying one year without shopping and suggested on my FB page that although I might not go that far, I was going to evaluate the tax impact and estimate a loss of property value as a result and cut out the equivalent in spending. Then I thought. imagine if people in NJ and NY all filling a FB page with lists of what they would forego this coming year. For me, in a quick minute I considered not replacing my dishwasher, or tiling my kitchen backsplash, putting in new wrought iron railings next to my front steps or replacing the stone path. That impacts Home Depot, GE, a tile company, quarry, plumber, tile man, iron welder, and the landscaper. If everyone put together a list and it was sent to our senators and congressmen, it might make an interesting argument.