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Repeal of the federal income tax deduction for state and local taxes ?

By BayAreaObserver   Apr 20, 11:20am   4 links   352 views   5 comments   watch (0)   quote      

Tax reform may have moved to the back burner for the Trump administration, but that doesn’t mean that people in the executive branch aren’t thinking about it. One of the big ideas reportedly getting its turn in the sun is repeal of the federal income tax deduction for state and local taxes.

According to Axios, the idea is gaining currency with Gary Cohn, the former head of Goldman Sachs who now serves as President Trump’s top economic adviser.

One of the reasons it is looking attractive is that the Trump administration and its allies in Congress are determined to slash income tax rates on both businesses and individuals but need to find a way to replace lost revenue. A way to do that is to go after “tax expenditures” -- exceptions and allowances that reduce taxes that individuals and businesses would otherwise owe.

The state and local tax deduction is one of the largest tax expenditures on the books. It allows taxpayers to deduct taxes paid to states and municipalities -- primarily income and personal property taxes, but also sales tax in some cases -- from their federal tax bills. It will cost the Treasury an estimated $97 billion in 2017 and $1.3 trillion over the next 10 years.

Eliminating any major tax expenditure is politically fraught, but there are reasons to believe that the state and local tax deduction is a more viable target than many because it primarily benefits higher-income earners.

More: http://www.thefiscaltimes.com/2017/04/19/

Or: https://www.axios.com/local-state-tax-deductions-on-cohns-list-2367696183.html

Who loves the idea: House Republican leadership, which included it in its tax plan; and Grover Norquist, the anti-tax warrior who views the deductions as the federal government subsidizing higher taxes at the state and local level. Bloomberg's Sahil Kapur wrote an excellent piece on the politics behind it.

#Taxes #Deductions #Trump

Not to worry - 44% of Americans wont be affected....

Comments 1-5 of 5     Last »

1   Straw Man   574/577 = 99% civil   Apr 20, 11:27am  ↑ like (1)   ↓ dislike   quote    

Californians will be F-U-C-K-E-D the most.

2   YesYNot   1083/1084 = 99% civil   Apr 20, 11:42am  ↑ like   ↓ dislike   quote    

This is basically a way to take money away from people from people who itemize which is mainly people with the mid, and people with high incomes.

Otherwise, I'm not sure who benefits most. That would probably depend on the rate baskets.

3   Booger   508/508 = 100% civil   Apr 20, 8:28pm  ↑ like (2)   ↓ dislike   quote    

Income tax cuts should be offset by import duties.

4   HEY YOU   853/853 = 100% civil   Apr 20, 11:32pm  ↑ like   ↓ dislike   quote    

Booger says

Income tax cuts should be offset by import duties.

Beginning with the 35% tariff on everything that the Trumps have imported
since they fucked the Republican voters.

5   Dan8267   3221/3266 = 98% civil   Apr 20, 11:57pm  ↑ like (1)   ↓ dislike   quote    

HEY YOU says

Beginning with the 35% tariff on everything that the Trumps have imported

Even Melania?

Comments 1-5 of 5     Last »

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