Trump IRS will move to block blue-state workarounds for state, local tax deductions

https://www.washingtonexaminer.com/policy/economy/trump-irs-will-move-to-block-blue-state-workarounds-for-state-local-tax-deductions

The IRS put out a two-page notice warning states that it would issue a rule to prevent them from skirting the cap by converting contributions to state and local governments from taxes to charitable giving. The Republican-passed tax law limited federal deductions for state and local taxes, but did not do so for charitable contributions.

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First, if the taxpayer is required to pay a given sum I figure you're hard pressed to get away with calling it "charity".

Second, I've heard rumors that the Democrats LIKE the idea of the wealthy paying more taxes. Why are they opposed to this?

Third, if they want some kind of a workaround for this why not allow the full deduction for state taxes on their state tax return? Heck, they could DOUBLE the deduction and still be well within their rights as a state to tax their citizens as they feel fit. If it's that important then help your people out at the state level, right?

Re: https://youtu.be/-N9nVLXMhPc

Ok, Democrats in blue states need to campaign against Republican Members of Congress and Senators that voted for this provision that was designed to punish blue states. By my count, there are 7 in NY; 14 from California and 5 from New Jersey.

Re: https://youtu.be/-N9nVLXMhPc

MTAtech said:

Ok, Democrats in blue states need to campaign against Republican Members of Congress and Senators that voted for this provision that was designed to punish blue states. By my count, there are 7 in NY; 14 from California and 5 from New Jersey.

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Punish blue states? I think it's an eminently fair thing to do - level the playing field, and all that.

Re: https://youtu.be/-N9nVLXMhPc

humbolt said:

Punish blue states? I think it's an eminently fair thing to do - level the playing field, and all that.

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Level it to what? The blue states already contribute more federal revenue than they receive and many red states get more federal revenue than they receive. This action makes an unbalanced system even more unbalanced.

Re: https://youtu.be/-N9nVLXMhPc

MTAtech said:

Level it to what? The blue states already contribute more federal revenue than they receive and many red states get more federal revenue than they receive. This action makes an unbalanced system even more unbalanced.

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Well, no. This eliminates a state-exploited subsidy that allows states to impose high taxes and shift the burden to the federal government and everyone else. It's a little game high tax states play to keep the wealthy in their state and paying taxes - to that state, at everyone else's expense.

Re: https://youtu.be/-N9nVLXMhPc

MTAtech said:

Ok, Democrats in blue states need to campaign against Republican Members of Congress and Senators that voted for this provision that was designed to punish blue states. By my count, there are 7 in NY; 14 from California and 5 from New Jersey.

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I guess you don't have to be paranoid to be a liberal but it sure helps. So you're asking Dems to campaign to protect upper class folks from paying "their fair share", eh? Didn't that used to be one of your rallying cries - to "make the rich pay their fair share"?

Re: https://youtu.be/-N9nVLXMhPc

Bullseye said:

I guess you don't have to be paranoid to be a liberal but it sure helps. So you're asking Dems to campaign to protect upper class folks from paying "their fair share", eh? Didn't that used to be one of your rallying cries - to "make the rich pay their fair share"?

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Well, heh, they didn't mean in liberal northeastern states. They meant in places where they don't live. When politics and your back pocket collide with principle, the left invariably goes with the former.

Re: https://youtu.be/-N9nVLXMhPc

Bullseye said:

I guess you don't have to be paranoid to be a liberal but it sure helps. So you're asking Dems to campaign to protect upper class folks from paying "their fair share", eh? Didn't that used to be one of your rallying cries - to "make the rich pay their fair share"?

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Yes, I know the mantra, the SALT deduction only benefits the rich. What you don't know (or don't want to know) is that lots of middle class citizens in blue states pay more than $10,000 for property taxes. While it is true that more than 90% of households making $200,000 or more claim it, 20% of households making $50,000 or less also claim it too. Moreover, households earning $100,000 in NY or CA aren't rich. Two married school teachers can earn over $200,000.

Lutherf said:

https://www.washingtonexaminer.com/policy/economy/trump-irs-will-move-to-block-blue-state-workarounds-for-state-local-tax-deductions



First, if the taxpayer is required to pay a given sum I figure you're hard pressed to get away with calling it "charity".

Second, I've heard rumors that the Democrats LIKE the idea of the wealthy paying more taxes. Why are they opposed to this?

Third, if they want some kind of a workaround for this why not allow the full deduction for state taxes on their state tax return? Heck, they could DOUBLE the deduction and still be well within their rights as a state to tax their citizens as they feel fit. If it's that important then help your people out at the state level, right?

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It’s simple. IRS can calculate your tax bill for you and bill you for taxes and penalties. The jails are full of people getting creative interpreting tax law.

BTW? If Trump is “punishing” blue states! Who was the first to “weaponize” the IRS?

Re: https://youtu.be/-N9nVLXMhPc

MTAtech said:

Yes, I know the mantra, the SALT deduction only benefits the rich. What you don't know (or don't want to know) is that lots of middle class citizens in blue states pay more than $10,000 for property taxes. While it is true that more than 90% of households making $200,000 or more claim it, 20% of households making $50,000 or less also claim it too. Moreover, households earning $100,000 in NY or CA aren't rich. Two married school teachers can earn over $200,000.

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20% of households making $50k or less do not pay more than $10k in SALT.

Re: https://youtu.be/-N9nVLXMhPc

I'd like to see tax-exempt status removed from Churches.

Re: https://youtu.be/-N9nVLXMhPc

MTAtech said:

Yes, I know the mantra, the SALT deduction only benefits the rich. What you don't know (or don't want to know) is that lots of middle class citizens in blue states pay more than $10,000 for property taxes. While it is true that more than 90% of households making $200,000 or more claim it, 20% of households making $50,000 or less also claim it too. Moreover, households earning $100,000 in NY or CA aren't rich. Two married school teachers can earn over $200,000.

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Yes, I was aware vulnerability did dip into lower classes as well. Gonna create a lot of voters clamoring for tax relief, which is a good thing.

Re: https://youtu.be/-N9nVLXMhPc

Winchester said:

20% of households making $50k or less do not pay more than $10k in SALT.

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Hey! Just because you don't pay it doesn't mean you can't claim it. You can plug in pretty much whatever number you want for property tax and TurboTax will green light your return.

Re: https://youtu.be/-N9nVLXMhPc

humbolt said:

Well, no. This eliminates a state-exploited subsidy that allows states to impose high taxes and shift the burden to the federal government and everyone else. It's a little game high tax states play to keep the wealthy in their state and paying taxes - to that state, at everyone else's expense.

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how do you "shift the burden to the federal government.. when you have high state taxes and STILL Are sending more money to the federal government than you receive.. while your neighbor that's a red state.. is actually getting MORE BACK from the federal government than they are putting in!!!!!??????

Good god almighty do we have a lot of people that need to change their lean from conservative to liberal.. All the so called conservatives like yourself clamoring for a tax law that picks winners and losers and makes states that are already net tax payers.. pick up more of the tab for states.. (mostly red) that are net tax receivers. Talk about being liberal

Re: https://youtu.be/-N9nVLXMhPc

Winchester said:

20% of households making $50k or less do not pay more than $10k in SALT.

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Okay.. what about the other 80% of households????

Re: https://youtu.be/-N9nVLXMhPc

jaeger19 said:

Okay.. what about the other 80% of households????

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80% in that bracket don't even itemize let alone pay $10k in SALT.

Re: https://youtu.be/-N9nVLXMhPc

Let's not pretend that there was a rational reason to change this part of the tax-code. It was done to punish blue states. (Let's put to rest any notion that the GOP suddenly cares to tax the wealthy, when the tax-cuts passed overwhelmingly benefit the rich -- and the super-rich.)

I think there is a potential for this to backfire on Republicans, as the Republicans in blue states are largely in areas that get hit with this rule. Democratic challengers will have a good argument to throwout those GOP Congresspeople.

Re: https://youtu.be/-N9nVLXMhPc

jaeger19 said:

how do you "shift the burden to the federal government.. when you have high state taxes and STILL Are sending more money to the federal government than you receive.. while your neighbor that's a red state.. is actually getting MORE BACK from the federal government than they are putting in!!!!!??????

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The elimination of the deduction is not limited to "blue" states. Blue states are wealthier, on average, than many red states. Now if you believe that our tax laws are generally reflective of our views, then it's easy to see that we believe the wealthy should bear more of the financial burden than those less fortunate. In effect, this was a federal subsidy to high-tax states with many wealthy residents. I think you need to take a broader view of the tax package.

Good god almighty do we have a lot of people that need to change their lean from conservative to liberal.. All the so called conservatives like yourself clamoring for a tax law that picks winners and losers and makes states that are already net tax payers.. pick up more of the tab for states.. (mostly red) that are net tax receivers. Talk about being liberal

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You seem, ah, incensed. I don't care what you think of me or my lean. You're telling me that you're okay with a state and localities imposing the most onerous tax burden the public can bear, and the federal government will take the hit for the lost revenue. That sounds exactly like a back door federal subsidy for the wealthiest states. It's not conservative or liberal to oppose that junk. It's just reasonable, rational, and fair.

Re: https://youtu.be/-N9nVLXMhPc

humbolt said:

The elimination of the deduction is not limited to "blue" states. Blue states are wealthier, on average, than many red states. Now if you believe that our tax laws are generally reflective of our views, then it's easy to see that we believe the wealthy should bear more of the financial burden than those less fortunate. In effect, this was a federal subsidy to high-tax states with many wealthy residents. I think you need to take a broader view of the tax package.
.

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And the blue states where already bearing more financial burden.. they were net payers.\

Meanwhile.. red states were net tax receivers.

You are right.. both states are getting the deduction. It seems pretty hard to me to argue that this deduction is a federal subsidy to "high tax states".. when those residents are paying that tax AND being net tax payers to the federal government (putting more in than the state is getting out). to me.. as a conservative.. the people being subsidized are the red states.. since they are BENEFITING from not only paying less in state taxes.. and less in federal taxes.. but ACTUALLY BEING NET RECIPIENTS of federal tax.

On an individual level.. when you compare me.. who is in the top tax bracket.. and pays a ton of taxes... and then compare me to someone where they get a net INCOME from the federal government..

Sure.. I get that I should pay more in taxes because of my income... but its pretty hard for me to except that I am being SUBSIDIZED by the federal government because I can take business expenses as a deduction. And meanwhile Not believe that the person who is receiving more money from the federal government than they are putting in.. is NOT being subsidized.

that's what makes me upset about you calling yourself a conservative. Basically you are arguing that the person that's not only paying high taxes to their state AND being a net taxpayer to the federal government (in that their state gives more in federal taxes than they get back).. is somehow getting a "backdoor subsidy".

Meanwhile.. the fellow that is enjoying low taxes and in addition lives in s state that gets more money from the federal government (courtesy of the blue states that are net tax payers) than they pay in.. is somehow getting the raw end of the deal. That somehow its UNFAIR.. that he is not getting MORE of the net taxpayers money.

So please.. explain that as a conservative... why you think its unfair. that the person that is a net tax payer to the government.. is being "unfair" and getting a backdoor subsidy".. compared to the fellow that is receiving more from the federal government than they are putting in.

Re: https://youtu.be/-N9nVLXMhPc

Why is it you believe that the federal government is required to subsidize State and local taxes?

Re: https://youtu.be/-N9nVLXMhPc

MTAtech said:

Level it to what? The blue states already contribute more federal revenue than they receive and many red states get more federal revenue than they receive. This action makes an unbalanced system even more unbalanced.

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That's because the blue states are richer. Given the desire by Democrats to tax the rich, I think they should take all deductions away from blue states, especially California and New York. Those fat cat Democrats aren't paying their fair share.

Re: https://youtu.be/-N9nVLXMhPc

flewism said:

Why is it you believe that the federal government is required to subsidize State and local taxes?

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Why do you believe that getting a deduction on your taxes is a subsidiy?

Do you believe that because I can deduct business expenses from my taxable income.. that the federal government is subsidizing my business?.

Re: https://youtu.be/-N9nVLXMhPc

American said:

That's because the blue states are richer. Given the desire by Democrats to tax the rich, I think they should take all deductions away from blue states, especially California and New York. Those fat cat Democrats aren't paying their fair share.

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Actually you would think that conservatives would be upset that the tax code is being changed to pick winners and losers and that those that are already net tax payers like California and New york.. are going to be taxed more.. while red states that receive more in federal tax than they put in are going to benefit even more.

Wait.. I am...

So why aren;t you if you call yourself a conservative. why do you want more money being taken from individuals and the state.. and going to the federal government.. to then be redistributed to states that don't pay a net tax to the federal government?

Re: https://youtu.be/-N9nVLXMhPc

jaeger19 said:

Actually you would think that conservatives would be upset that the tax code is being changed to pick winners and losers and that those that are already net tax payers like California and New york.. are going to be taxed more.. while red states that receive more in federal tax than they put in are going to benefit even more.

Wait.. I am...

So why aren;t you if you call yourself a conservative. why do you want more money being taken from individuals and the state.. and going to the federal government.. to then be redistributed to states that don't pay a net tax to the federal government?

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They should pay more, that's where all the rich Hollywood liberal fat cats live. It's only fair, right? It never was a level playing field btw, even prior to the income tax amendment. Indirect taxes proportional to population.

Re: https://youtu.be/-N9nVLXMhPc

American said:

They should pay more, that's where all the rich Hollywood liberal fat cats live. It's only fair, right? It never was a level playing field btw, even prior to the income tax amendment. Indirect taxes proportional to population.

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I see.. so if you are already paying more in taxes than you get back.. and your neighbor not only pays less in taxes, but actually is getting federal on top of that...

When he comes over to you and tells you that you aren't paying your fair share of taxes and you need to lose your home owners exception.. so you can pay more in taxes.. which in part will go to him... you absolutely agree that its the "fair" thing to do?

Somehow.. I doubt that.