Good news! Biden says to hell with deficits!
basil said:
notupset said:
Taking the limitation off the SALT deduction is beyond dopey. Roughly 50% of the benefit goes to the top 1%. And if you are a Congressperson who doesn't represent taxpayers in the Northeast, California, Maryland, Minnesota, Illinois, Ohio, Iowa or Hawaii it is just an indefensible money/revenue give away with no benefit. Also, of course, progressives will hate it and conservatives will hate it.
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
I don't have a problem limiting the deduction to incomes under 250k, let's say, but it really needs to be gotten rid of for everyone else.
Besides it being one of the biggest dick moves by any legislature ever, it really screws over people who set their budget for their homes by factoring in the deduction. To pull the rug out of people like that is, well, dickish.
notupset said:
Taking the limitation off the SALT deduction is beyond dopey. Roughly 50% of the benefit goes to the top 1%. And if you are a Congressperson who doesn't represent taxpayers in the Northeast, California, Maryland, Minnesota, Illinois, Ohio, Iowa or Hawaii it is just an indefensible money/revenue give away with no benefit. Also, of course, progressives will hate it and conservatives will hate it.
Discussed a bit upthread:
https://maplewood.worldwebs.com/forums/discussion/good-news-biden-says-to-hell-with-deficits?page=next&limit=90#discussion-replies-3537290
I thought ml1's point was a good one:
ml1 said:
my understanding was that the deduction was there from the beginning of the federal income tax as an acknowledgement of the primacy of the states. They get the "first crack" at taxing our income because the states provide most of our everyday needs as residents -- roads, schools, courts, first responders, etc., etc. And it's not just property taxes that are capped, it's all state taxes.
reinstating the deduction does make sense from the standpoint of trying not to hobble the revenue generating efforts of the states. Now more than ever with the states facing pandemic-caused shortfalls, and limits on deficit spending, this reasoning should be considered.
notupset said:
Taking the limitation off the SALT deduction is beyond dopey. Roughly 50% of the benefit goes to the top 1%. And if you are a Congressperson who doesn't represent taxpayers in the Northeast, California, Maryland, Minnesota, Illinois, Ohio, Iowa or Hawaii it is just an indefensible money/revenue give away with no benefit. Also, of course, progressives will hate it and conservatives will hate it.
The SALT deduction was limited for the purpose of giving a Federal tax reduction to the higher-income taxpayers. So the result is that those with lower incomes are subsidizing tax breaks for those with higher incomes. Take off the SALT limit (or include an income limitation instead of a deduction limitation) and raise the rate on that "top 1%" if that's what bothers you.
nohero said:
notupset said:
Taking the limitation off the SALT deduction is beyond dopey. Roughly 50% of the benefit goes to the top 1%. And if you are a Congressperson who doesn't represent taxpayers in the Northeast, California, Maryland, Minnesota, Illinois, Ohio, Iowa or Hawaii it is just an indefensible money/revenue give away with no benefit. Also, of course, progressives will hate it and conservatives will hate it.
The SALT deduction was limited for the purpose of giving a Federal tax reduction to the higher-income taxpayers. So the result is that those with lower incomes are subsidizing tax breaks for those with higher incomes. Take off the SALT limit (or include an income limitation instead of a deduction limitation) and raise the rate on that "top 1%" if that's what bothers you.
Take off limits to SALT deduction and finance that by closing all loopholes for real estate developers
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Perhaps I'm missing something, but with SALT deductions in place, if NJ raises taxes individuals still don't end up paying more out of pocket as their federal taxes go down? If that's the case, I'm not sure why higher local taxes, in and of themselves, are "not a good thing." Doesn't that just become another way of saying you're opposed to government spending as a principle?
If so, then you're free to subscribe to whatever principles you like, but they're not mine. I want more frequent and more reliable train service between here and NYC, I want more state aid to local school systems, etc. If NJ can spend more on these things without my paying more, why wouldn't I want that?
"with SALT deductions in place, if NJ raises taxes individuals still don't end up paying more out of pocket as their federal taxes go down?"
iirc, deducting the SALT on the federal return saves on federal taxes, but only at your marginal tax rate, not the whole amount of the SALT. $10,000 NJ tax deducted on a federal return with 20% marginal rate saves up to $2,000. The fed/NJ interaction is not a full offset like the NY/NJ interaction can be.
So all those nice things state and local taxes can provide cost you less with the SALT deduction in place, but not nothing.
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
basil said:
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
terp said:
basil said:
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
Comments like these are not necessary for a discussion of this issue.
the purpose of the elimination of SALT was to punish state and local governments that try to fund services for their residents through taxes. I would think that would be objectionable to people who believe in more control by governments that are closer to the people, and less centralized control.
ml1 said:
the purpose of the elimination of SALT was to punish state and local governments that try to fund services for their residents through taxes. I would think that would be objectionable to people who believe in more control by governments that are closer to the people, and less centralized control.
Plus a desire to go to fee-for-service.
jimmurphy said:
ml1 said:
the purpose of the elimination of SALT was to punish state and local governments that try to fund services for their residents through taxes. I would think that would be objectionable to people who believe in more control by governments that are closer to the people, and less centralized control.
Plus a desire to go to fee-for-service.
oh yeah. forgot about that. I'm looking forward to the day when police and fire departments have a meter running when they show up at a fire or a crime scene.
ml1 said:
the purpose of the elimination of SALT was to punish state and local governments that try to fund services for their residents through taxes. I would think that would be objectionable to people who believe in more control by governments that are closer to the people, and less centralized control.
Except he's shown that local control is not what he cares about. He cares about not having anyone tell him what to do. He demonstrated that when he objected to even local imposition of a minimum wage.
Unless we're attempting to move into a pre-industrial society with a political structure based on very small groups loosely aligned with each other (someone planning an apocalypse?), our political structures are always going to be pretty heavily "centralized." As an individual, I'm not sure a system where New Jersey, pop nearly 9m, ends up with a much higher balance of power compared to the federal government really empowers me so much more. So I'm not sure how useful the "centralization" frame is here, since no matter how decentralized a modern state is, anyone can always no-true-scotsman its shortcomings by arguing that it's actually still very centralized and a truly decentralized state would be free of whatever defect is currently the subject of discussion.
Within the framework of our industrialized, modern economy, though, I think there's always good discussion to be had on how much to weight more local vs more remote weighting of power. In a lot of ways, the U.S. is actually quite "decentralized" compared to other countries. We saw that in the election, for instance, where Trump couldn't just order Gov. Kemp to simply change the election results, the governor of Georgia doesn't work for the president of the United States. That shows one of the strengths of stressing federalism. OTOH, the shambolic, uncoordinated response to COVID we've seen in the absence of strong federal leadership shows some of the real limits of what more local governments can do on their own (as, indeed, the failures of the Articles of Confederation do, if we want to go back to our historic origins).
One thing I was expecting at the beginning of the Trump era that didn't quite pan out is a more robust federalism in general. There were plenty of high profile feuds between, say, the California AG and the Trump DOJ, but I really thought there was an opportunity for states like NJ, NY, CA, etc to act more aggressively at the state level than they did. Maybe the tax changes hampered that to some extent (and were intended to), or maybe there's some truth to the feeling that we've lost a lot of the sense of local culture and become too nationalized.
terp said:
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
Snark. But you complain how poorly you are treated.
As to decentralization the Mayor of Miami was on TV complaining that he cannot mandate Masks and certain other anti-pandemic policies because the State has prohibited localities from making such decisions.
Very few people believe in "States Rights" or "Local Control" or "decentralization" as principles. They support whichever branch of Government is in the hands of those whose policies they agree with.
ml1 said:
the purpose of the elimination of SALT was to punish state and local governments that try to fund services for their residents through taxes. I would think that would be objectionable to people who believe in more control by governments that are closer to the people, and less centralized control.
If you talk to people who support this, the thinking is that people who can afford to pay these kind of property taxes probably don't need the write off. It's the same argument people here make all the time when they want to tax the rich.
terp said:
basil said:
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
Eh, yes, but maybe not in the way you think.
Capping SALT was just a way to punish democrats (like me) in blue states by increasing their taxes by taxing a certain part of their income twice. Having said that, I would gladly pay double that tax increase if it were part of a more structural progressive tax increase on high earners.
basil said:
terp said:
basil said:
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
Eh, yes, but maybe not in the way you think.
Capping SALT was just a way to punish democrats (like me) in blue states by increasing their taxes by taxing a certain part of their income twice. Having said that, I would gladly pay double that tax increase if it were part of a more structural progressive tax increase on high earners.
Where do you stand on the "death tax". People who oppose it make a very similar argument.
terp said:
basil said:
terp said:
basil said:
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
Eh, yes, but maybe not in the way you think.
Capping SALT was just a way to punish democrats (like me) in blue states by increasing their taxes by taxing a certain part of their income twice. Having said that, I would gladly pay double that tax increase if it were part of a more structural progressive tax increase on high earners.
Where do you stand on the "death tax". People who oppose it make a very similar argument.
Did you ever call it the death tax until Republicans started calling it that?
As for your statement, they might make that argument, but they'd be wrong.
drummerboy said:
Did you ever call it the death tax until Republicans started calling it that?
As for your statement, they might make that argument, but they'd be wrong.
The argument is intellectually consistent. Double taxation. Why would they be wrong? (Not that I disagree)
Well first of all, in large estates, much of the estate consists of unrealized capital gains which have never been taxed.
But, more importantly, the inheritor pays the tax, not the deceased. And it obviously has never been taxed for the inheritor. It's all brand new money to them. It doesn't matter if it was ever taxed when in the hands of the deceased.
terp said:
If you talk to people who support this, the thinking is that people who can afford to pay these kind of property taxes probably don't need the write off. It's the same argument people here make all the time when they want to tax the rich.
how is it the same?
jimmurphy said:
drummerboy said:
Did you ever call it the death tax until Republicans started calling it that?
As for your statement, they might make that argument, but they'd be wrong.
The argument is intellectually consistent. Double taxation. Why would they be wrong? (Not that I disagree)
They use the label "double taxation" for the "death tax" argument, but it's not the same.
The SALT issue is simple: paying tax on money that you didn't keep, but paid to a different government entity in the form of a tax. That's not the same as taxing an estate.
terp said:
basil said:
terp said:
basil said:
notupset said:
basil said:
The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local governmentI reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.
Just no. SALT deduction was a very inefficient way to lower some people's taxes. Lowering rates, as was done in the tax reform is a much better way to do this. It is good tax policy. The unlimited SALT deduction does encourage states to raise taxes, which is not a good thing, in and of itself. If politicians suggested that they want to increase the limit a bit with an income limitation, say $130,000, which is the cutoff for top 20% in the US, that could be more palatable a broader audience.
Eh, and be taxed twice? No thanks.
I am all for making the tax system fairer and more progressive. Close loopholes for corporations and high earners, and in general tax higher incomes more. At local level, state level, and federal level. But SALT deduction is NOT a tax loophole. it is simply a provision not to be taxed twice. If you want to make taxes fairer, tax capital gains like income, or make Amazon pay their fair share of taxes.
You were really hurt when the capped the SALT deduction, huh? Sorry to hear.
Eh, yes, but maybe not in the way you think.
Capping SALT was just a way to punish democrats (like me) in blue states by increasing their taxes by taxing a certain part of their income twice. Having said that, I would gladly pay double that tax increase if it were part of a more structural progressive tax increase on high earners.
Where do you stand on the "death tax". People who oppose it make a very similar argument.
There is a big difference between a national political party using the tax code to punish voters in blue states and states deciding to tax their citizens in a progressive way.
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The limitation on SALT was designed to:
1) Punish democratic voters in democratic leaning states
2) Limit the size of local government
I reject both of these things. We should take the limits off these SALT reductions immediately and recover the money by raising taxes by closing corporate loopholes and raising taxes on high-income households anywhere.
And I am being generous by not punishing voters in red states. And I am thinking that may be a mistake.