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State and Local Tax Deduction

Do you support ending state and local tax deductions on your Federal taxes? Why or why not?

  • Yes

    Votes: 16 29.6%
  • No

    Votes: 36 66.7%
  • Unsure

    Votes: 2 3.7%

  • Total voters
    54
  • Poll closed .

LesGovt

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As part of tax reform, do you support ending state and local tax deductions on your Federal taxes? Why or why not?

I should have had the qualifier in the poll question, but I missed it. Rats!
 
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I don't support it because it will increase my taxable income and tax liability.
 
The whole idea of getting rid of itemized deductions would be fine if they made a material change to the standard deduction. However, doubling the standard deduction while eliminating personal and dependent exemptions really doesn't change much of anything.

The idea behind our current tax code is that lots of people have lots of different "necessary" living circumstances. On the whole, the code does a decent job of making accommodations for those differences. The "simplification" move will certainly make filing taxes easier but at the cost of losing the ability to account for different family and financial circumstances. It's kind of like how a Snuggie will fit pretty much anybody but everyone who wears one looks like crap.
 
I don't support it because it will increase my taxable income and tax liability.

Compared to current system and when looking at the entire reform packages, how do you know it will increase you taxable income?
 
No. It's naive to see the move as anything but an attempt to punish blue states.
 
Yes. It's naive to see these deductions as anything but a free "gimme" to blue states.
 
The whole idea of getting rid of itemized deductions would be fine if they made a material change to the standard deduction. However, doubling the standard deduction while eliminating personal and dependent exemptions really doesn't change much of anything.

The idea behind our current tax code is that lots of people have lots of different "necessary" living circumstances. On the whole, the code does a decent job of making accommodations for those differences. The "simplification" move will certainly make filing taxes easier but at the cost of losing the ability to account for different family and financial circumstances. It's kind of like how a Snuggie will fit pretty much anybody but everyone who wears one looks like crap.

I never would have thought of pulling the Snuggie card in a tax debate. Well done.
 
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No. It's naive to see the move as anything but an attempt to punish blue states.

So the question now for you is, if your taxes would go down even if you lived in a blue state and after the elimination of the state & local tax deduction, would you still oppose doing away with the state and local tax deduction? I understand that you might want to rearrange everything in the tax code to suit what you think it should be, but, in this hypothetical case, it is do without any cut and pay more in taxes or get a cut and do away with the state and tax deduction?
 
So the question now for you is, if your taxes would go down even if you lived in a blue state and after the elimination of the state & local tax deduction, would you still oppose doing away with the state and local tax deduction? I understand that you might want to rearrange everything in the tax code to suit what you think it should be, but, in this hypothetical case, it is do without any cut and pay more in taxes or get a cut and do away with the state and tax deduction?

I oppose this plan even if my taxes would go down - and they probably would a little bit.
 
The whole idea of getting rid of itemized deductions would be fine if they made a material change to the standard deduction. However, doubling the standard deduction while eliminating personal and dependent exemptions really doesn't change much of anything.

The idea behind our current tax code is that lots of people have lots of different "necessary" living circumstances. On the whole, the code does a decent job of making accommodations for those differences. The "simplification" move will certainly make filing taxes easier but at the cost of losing the ability to account for different family and financial circumstances. It's kind of like how a Snuggie will fit pretty much anybody but everyone who wears one looks like crap.

And this is why our tax code cannot be understood, even by the IRS. And, for the purpose of discussion, what if you, and most everyone else, would derive a benefit from the simplification. Would you still be against simplification?
 
As part of tax reform, do you support ending state and local tax deductions on your Federal taxes? Why or why not?

I should have had the qualifier in the poll question, but I missed it. Rats!

I do not support that.

Why should someone pay income tax on money they have actually pay to their state as an income tax? That's the craziest thing I've heard and would be only the tax I think of that would work that way.
 
No. It's naive to see the move as anything but an attempt to punish blue states.

Make sure I understand your position, you believe it is fair to have the Federal tax code favor those in blue states over red states?
 
Make sure I understand your position, you believe it is fair to have the Federal tax code favor those in blue states over red states?

Oh, so you're one of those posters, eh? Don't play silly games and don't put words in my mouth. I said nothing of the sort. You asked me whether I'd oppose it if my taxes would go down and I said yes, I would still oppose it.



Further, what you say here is a blatant falsehood. Analysis of the flow of federal tax dollars shows they are in fact flowing from blue to red states when the total federal the total taxation/spending regime is considered.



So not only does the overall federal scheme favor red states over blue states, but this would simply further punish blue states since they tend to have higher state and local tax rates. That's only part of the reason I oppose this stupid and cynical trickle-down BS tax effort.
 
And this is why our tax code cannot be understood, even by the IRS. And, for the purpose of discussion, what if you, and most everyone else, would derive a benefit from the simplification. Would you still be against simplification?

Generally speaking, I'm a fan of people having money for necessary living expenses. Whether we arrive at that point by allowing certain tax deductions, by not taxing as heavily, or by increasing the amount of income that isn't taxed is immaterial as long as the goal is achieved. Speaking specifically to your question, I'm not a big fan of simple solutions to complex problems. As a rule, such "solutions" create more problems than they solve.

Let me give you an example of what I mean. Electronic preparation and filing of tax returns makes things more simple than the old fashioned calculator and pencil method. Information is reported to the IRS by employers, banks, etc. and then, when the taxpayer files their return, the figures on the return are matched to the IRS information and if everything matches up nobody needs to be involved. That's simple.

Well, on Monday I had a client come in with a letter from the IRS. The IRS wanted $1000 because their records didn't match what he had on his tax return. It turns out that the IRS counted his income from his IRA but failed to include the tax he had withheld. If he had done things the old fashioned way there would have been documentation sent with the return which would have verified his figures. Now, I'm not saying that we should go back to pencil and calculator returns but just because something is "simple" doesn't mean that it's always a benefit. Also, making something "simple" for one person doesn't necessarily mean that it's going to be equally simple for someone else.

The goal shouldn't be "simple". It should be "fair" and "reasonable" and "efficient". A "simple" solution to taxation would be for the government to take all the money and just send you a check every month for what they figured you were worth. You wouldn't need to file anything or collect any records. It just doesn't get any more simple than that, does it?
 
I voted no as it stands now. I think tax relief should be for all people whether they live in a red state or a blue state.
 
Oh, so you're one of those posters, eh? Don't play silly games and don't put words in my mouth. I said nothing of the sort. You asked me whether I'd oppose it if my taxes would go down and I said yes, I would still oppose it.

Further, what you say here is a blatant falsehood. Analysis of the flow of federal tax dollars shows they are in fact flowing from blue to red states when the total federal the total taxation/spending regime is considered.

So not only does the overall federal scheme favor red states over blue states, but this would simply further punish blue states since they tend to have higher state and local tax rates. That's only part of the reason I oppose this stupid and cynical trickle-down BS tax effort.

Sorry, I did not mean to try to trap you. I am just trying to find out where people stand on this issue and why.

I believe you are looking at the aggregate and not the individual tax payer. Let's look at two tax payers. One is from a high state tax state and one is from a low state tax. If each of them have the same income, dependents, etc., who pays more in taxes if each can deduct state taxes?
 
The goal shouldn't be "simple". It should be "fair" and "reasonable" and "efficient". A "simple" solution to taxation would be for the government to take all the money and just send you a check every month for what they figured you were worth. You wouldn't need to file anything or collect any records. It just doesn't get any more simple than that, does it?

I prefer both simple and fair. I'll ask you the same question I asked Mr Person. Let's look at two tax payers. One is from a high state tax state and one is from a low state tax. If each of them have the same income, dependents, etc., who pays more in taxes if each can deduct state taxes?
 
I voted no as it stands now. I think tax relief should be for all people whether they live in a red state or a blue state.

And what if everyone does have lower Federal Income taxes?
 
I do not support that.

Why should someone pay income tax on money they have actually pay to their state as an income tax? That's the craziest thing I've heard and would be only the tax I think of that would work that way.

If you pay state and local taxes, isn't a sales tax for all practical purposes a tax on "income" that has already been taxed? It might not be termed an income tax, but it does come out of your income.
 
I prefer both simple and fair. I'll ask you the same question I asked Mr Person. Let's look at two tax payers. One is from a high state tax state and one is from a low state tax. If each of them have the same income, dependents, etc., who pays more in taxes if each can deduct state taxes?

Generally speaking, the one from the high tax state would pay more. For example, considering a single person making $100k in wages with $25k in itemized deductions including $5k in state tax filed in CA they would owe $13838 federal tax and $4753 CA tax. If that same person lived in AZ their federal tax would be the same but their AZ tax would be $2492
 
So not only does the overall federal scheme favor red states over blue states, but this would simply further punish blue states since they tend to have higher state and local tax rates. That's only part of the reason I oppose this stupid and cynical trickle-down BS tax effort.

How about a flat tax (one rate) with no deductions or exemptions, That would be the Federal taxation and could be as low as 10% for all. Then virtually all Federal programs would move to the states and each state could tax however they want. Blue states would not be owing to the Red States and taxes would be fair for all. Blue state problem is solved.
 
Generally speaking, the one from the high tax state would pay more. For example, considering a single person making $100k in wages with $25k in itemized deductions including $5k in state tax filed in CA they would owe $13838 federal tax and $4753 CA tax. If that same person lived in AZ their federal tax would be the same but their AZ tax would be $2492

I apologize as I am doing a poor job of asking my questions. Please forgive me. The question, I was attempting to ask, was about Federal taxes only. Who pays more on Federal taxes?
 
Not being able to deduct state and local taxes is double taxation. We have enough of that as it is. Don't add this to it.
 
Not being able to deduct state and local taxes is double taxation. We have enough of that as it is. Don't add this to it.
It's two different taxes for two different sets of services. It's not double taxation.
 
Further, what you say here is a blatant falsehood. Analysis of the flow of federal tax dollars shows they are in fact flowing from blue to red states when the total federal the total taxation/spending regime is considered.

So not only does the overall federal scheme favor red states over blue states, but this would simply further punish blue states since they tend to have higher state and local tax rates. That's only part of the reason I oppose this stupid and cynical trickle-down BS tax effort.
It doesn't flow from blue states to red states. It flows from people with high incomes to people with low (or no) incomes.
 
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