http://video.foxbusiness.com/v...6001/?#sp=show-clips

Long story short:

You can deduct your state and local taxes paid from your federal taxes if you itemize your deductions.

So, California's richest residents pay around 12% in state tax and who knows on their local taxes.

My state's richest folks (Ohio) pay around 5% in state and local taxes.

And Florida's richest pay 0% on their income taxes...Local obviously varies.

It sounds like one the tax fixes being proposed is to eliminate the federal deduction for state and local income taxes. Keep in mind, for the most part, it's wealthy people who tend to take itemized deductions.

Libs in states like Cali, Ill and NY all want to tax the rich! Eliminating this state and local deductions would do just that, so they can't really be against it.

The problem for the libs in states like that is they have the highest state taxes, so their residents will be hit the hardest.

If this is done, a rich guy in Cali will pay 12% more, Ohio will rich folks 5% more and Richy Rich in Florida won't notice any difference at all.

I find this not only comical, but socially correct. Why should you get a break from chipping into the federal tax pool just because your state is poorly run?

I don't consider Steward Varney to be right all the time, but I didn't really think about this angle, but now that I have, I love it!

I'm in FL won't hurt me a bit.....

Go for it!

Not just the "rich" itemize their taxes. Those with homes do to.

I'm pretty middle class, and I always itemize my tax returns. From the looks of where this is going, there is an interest in eliminating my home mortgage deduction, and the deductions I take for paying sales taxes to state and local government. I'm not impressed.

I see it like this:
The citizens will rail against the Hight property tax states like NY NJ and for the Libs to restructure or lose even more taxpaying residents.
Trump will succeed in firing them to adapt!
Win Win!

Not sure how Varney comes up with the idea it's a "big plus" for states with no income tax.

Eliminating the interest deduction has been kicked around, but that is a tough sell politically. Truth be told though, you are being "subsidized" by the feds on your mortgage by being able to deduct the interest.

I'm in Florida, so it doesn't affect me - but that is kind of the point. I chose to live in a state that respected my income. People who chose to live in high tax states don't face the full cost of that choice, and there is no reason why they shouldn't. As a matter of economics, the deduction of state/local taxes from your federal taxable income is just a subsidy to high-tax states that protects people in those states from the consequences of their decisions.

The politicians in places like CA, NY, IL, MA etc can keep raising taxes because they know that the citizens of their states are not shouldering the full burden of those increases. They get to lay off some of the burden on federal taxpayers in all 50 states who never voted for those tax increases. Let's see how eager the wealthy folks in those states are to pay those taxes and to keep voting for the politicians that keep increasing them when that deduction is disallowed.

I know a lot of people are "trapped" by work, family or other circumstances in these states that would get hosed, but as a matter of conservative principle and basic economics, there is no real reason for this deduction to survive.

Trump is making a smart move.
He is selling this as a middle class cut and (slightly) raising the taxes of a few rich people.
Now the Democrats, and so called moderate Republicans, have to find a way to vote against that.

On a slightly different part of the same subject, those itemizing and claiming the mortgage interest deduction are only getting the amount above using the standard deduction (2017 is $12,700 for married). His plan would double that deduction to offset the removal of that deduction. If the numbers hold, that would be $25,400 and the tax filing and record keeping process for most middle class without other things would be much simpler.

Just for clarification, this isn't talking about doing away with the mortgage interest deduction.

If you live in a state like Florida, nothing would really change for you. It's a "plus" for Florida in that you don't really get a benefit on your personal taxes, but what you do get is more federal funding without it coming from your wallet.

And yes, about 1/3 of tax payers take itemized deductions. If you have a big mortgage and live in a high tax state, your odds are higher.

I didn't say only the richest folks itemize, I said it's wealthy people who tend to do so.

How much over the standard deduction are you by itemizing? How much of your state and local income taxes counting towards that overage?

The answer to those two questions will decide if you like this or not.

I know I'm not escaping our current debt situation without my taxes being raised to pay for it. I'm just happy to hear the those in Democrat states will be hit harder.

quote:

but as a matter of economics, the deduction of state/local taxes from your federal taxable income is just a subsidy to high-tax states.

That's how I see it and why I like this idea.

As I understand it there is no elimination of home mortgage interest deduction in the plan, just discussion of eliminating state tax deductions, and that is not settled. Personally, since we're now back in California, that would cost me a lot, but it's the right thing to do (i.e. eliminate the state tax deduction).

For those of us with huge property tax bills this is troubling. And we need more people paying federal income taxes, not less like I am hearing about is part of the plan. Not impressed either. I have read that almost half of those working pay none to very little federal income taxes.

Build the fucking wall instead of working on a bad tax plan.

Looks like they want to double the standard deduction. That's what protects the middle folks who are itemizing now. Smart move really.

but yeah grumpy, if you'd still itemize even with the standard deduction being doubled, you're gonna get hit in Illinois. Unfortunately that's how it should be. That's federalism and voting with our feet in action IMO.

quote:

Originally posted by HRK:
I'm in FL won't hurt me a bit.....

Go for it!

^^^Bingo.

It would definitely cost me more in MN, but it would take away some of the political cover that politicians use to mask our high state taxes. Probably a good thing.

quote:

Originally posted by LS1 GTO:
Not just the "rich" itemize their taxes. Those with homes do to.

Well.... it's not all homeowners, it's only those with a mortgage.

quote:

So, California's richest residents pay around 12% in state tax and who knows on their local taxes.
My state's richest folks (Ohio) pay around 5% in state and local taxes.
And Florida's richest pay 0% on their income taxes...Local obviously varies.
It sounds like one the tax fixes being proposed is to eliminate the federal deduction for state and local income taxes. Keep in mind, for the most part, it's wealthy people who tend to take itemized deductions.

HA!
Yep, eliminate ALL deductions and lower the rates. It would be much simpler, and yes, it would hit hardest those paying the highest state and local taxes.

The framework aims to consolidate the current seven tax brackets into three brackets of 12%, 25% and 35%.

I don't think it goes far enough. I don't think anyone should pay over 20% of their income to the federal government.

Sounds like a plan, also federally subsidized flood insurance should go also.

quote:

Originally posted by midwest guy:
Sounds like a plan, also federally subsidized flood insurance should go also.

Building (in some cases rebuilding) in a flood plain is the perfect definition of a pre-existing condition.

So currently if someone lives in Florida, he is sending more to the Feds than someone making the same taxable income who lives in CA? I can see why the Feds would want to eliminate that deduction. But it will really put the bite on people in CA and other such tax gluttonous states.

quote:

Originally posted by John Steed:
So currently if someone lives in Florida, he is sending more to the Feds than someone making the same taxable income who lives in CA? I can see why the Feds would want to eliminate that deduction. But it will really put the bite on people in CA and other such tax gluttonous states.

yes exactly. I think as more Americans realize this, they will be in favor of this plan. Even worse, many of these high income tax states are receiving more federal money than they put in. So Cali is paying less than Florida into the federal pot, AND they're taking more out of it. Most folks don't realize how this works and it looks like DJT is about to 'splain it to them.

There is no penalty to living in high income states if you currently itemize. So really, there is no pressure on local government to lower taxes...or at least not much pressure.

Watch, local governments will protest the hell out of this! They know this would make them accountable to their citizens and they don't want any part of that.