Andrew Cuomo upset about losing SALT deductions

[Starbuck1975]

Interesting how so many liberal states were able to leverage their ports and Louisiana was not.

Louisiana did not benefit from the rapid industrialization of WW2 and post-war boom that occurred around other ports. A port is reflective of the economic diversity around it. After WW2, the nation decided to invest in some hubs while abandon others. For a variety of reasons, the infrastructure developed to protect the Gulf and train soldiers for the Pacific theater climate reverted back to agriculture or municipal use.

Huh? My point is that fiscal conservatism is not inherently good. It can be good, it can also be Kansas.

Yes, and my point is that liberalism is not inherently good either. It can also be Rhode Island or Detroit or New Haven or Albany.

I am for it, but that doesn’t mean I’m for taking even more dollars out of the regions in which they are generated, which our our best and most productive. We should be further building them up. You could take that money and say, make a child care tax credit that would return money to lower and middle class people in high cost areas.

But won’t that happen anyway under a more progressive tax plan. You could also take that money and build low income housing in high performing school districts, but the NIMBYs would never allow it. Tax breaks and credits are bandaids.

I don’t see what this has to do with the OP.

It doesn’t. I thought we moved on to something more productive.

 

[fskimospy]

Louisiana did not benefit from the rapid industrialization of WW2 and post-war boom that occurred around other ports. A port is reflective of the economic diversity around it. After WW2, the nation decided to invest in some hubs while abandon others. For a variety of reasons, the infrastructure developed to protect the Gulf and train soldiers for the Pacific theater climate reverted back to agriculture or municipal use.

Ah again back to like a 20 year period while ignoring the whole rest of our history. I’ll never understand why 1940-1960 was so much more important than 1600-1940 and 1960-2018 combined.

Yes, and my point is that liberalism is not inherently good either. It can also be Rhode Island or Detroit or New Haven or Albany.

But I never claimed it was inherently good. On the whole it does pretty clearly produce superior outcomes though.

But won’t that happen anyway under a more progressive tax plan. You could also take that money and build low income housing in high performing school districts, but the NIMBYs would never allow it. Tax breaks and credits are bandaids.

Those are two different issues.

It doesn’t. I thought we moved on to something more productive.

Well in that case the answer is rich people.

 

[Jaskalas]

Ah again back to like a 20 year period while ignoring the whole rest of our history. I’ll never understand why 1940-1960 was so much more important than 1600-1940 and 1960-2018 combined.

The post-war economic boom for the United States was like a mini golden age for our civilization.

All that industrial stimulus (deficit spending during the War) and most the planet left in smoldering ruins. We had a pure economic advantage and expansion. It left us rich, far richer than today. After ~1970 we saw the rise of global competitors and the beginning consequences of reaching out to Asia. At the same time we cut taxes and reduced investment at home, in industry and in workers. Our boom has ended with a bust as inequality grows to this day.

Baby Boomers got to reap the richest "harvest" in American history. But they had no clue why, and soiled it to sully those who followed. Class / generational warfare was waged, and the consequences are quite damning. Inequality is skyrocketing in the wake of 2008. And Americans have employed no policy to slow it down, let alone reverse and recover from it.

And why would we? Our "leaders" policy is based on a drunkard swagger left over from the Boomer's golden era. They were left with delusions of bootstraps, how they were solely responsible for their own success in life. That they did it all themselves and they do not need anyone else, they have no use for anyone else. !@#$ those lowlifes who couldn't use bootstraps like they did. Ignorant of the fact that their success was not solely their own making. That, as an economy, we are all connected to and need one another. That workers are consumers are investors are employers. Or at least, that's how it worked when people had money.

Like Walmart did to Mom and Pop, Wallstreet has consumed finances and wealth management in this nation. Trickle down was, in truth, trickle up. Leeches like Trump grabbed small businesses by the !@#$% and our flavor of capitalism evolved. It changed from empowering the every day American, as the Boomers enjoyed, to sinking small business and funneling wealth straight to the top. Not to the 1%, but towards the 0.001%. The wealth of many has become the wealth of a few.

Baby Boomers remember the "good old days" when the average American was richer, but ignorance was confused for wisdom, and they say !@#$ you towards efforts to maintain the America that once was. To conserve the golden era they once enjoyed. To save our capital from cannibalizing itself and pricing the worker / consumer out of the economy. We need a better flow in goods and services, but the Republicans and their delusions stand in our way.

 

[fskimospy]

The post-war economic boom for the United States was like a mini golden age for our civilization.

All that industrial stimulus (deficit spending during the War) and most the planet left in smoldering ruins. We had a pure economic advantage and expansion. It left us rich, far richer than today. After ~1970 we saw the rise of global competitors and the beginning consequences of reaching out to Asia. At the same time we cut taxes and reduced investment at home, in industry and in workers. Our boom has ended with a bust as inequality grows to this day.

The argument that the US prospered after World War Two because the rest of the planet was in ruins is badly wrong.

Trade in the postwar era was a very small portion of our economy, both imports and exports were ~4% of US GDP and they didn’t vary all that much. There simply was no export led boom to create this golden age, it was almost all internal.

After all think about it this way, while you’re right that our economic competitors were mostly in ruins those competitors were also the people we counted on to buy our stuff. They were too poor to compete but also too poor to consume. It was a wash.

As Paul Krugman has said the logical outcome of this argument is that the best thing the US could do for its economy would be to flatten Western Europe and China. Do you really think that’s the case?

Baby Boomers got to reap the richest "harvest" in American history. But they had no clue why, and soiled it to sully those who followed. Class / generational warfare was waged, and the consequences are quite damning. Inequality is skyrocketing in the wake of 2008. And Americans have employed no policy to slow it down, let alone reverse and recover from it.

And why would we? Our "leaders" policy is based on a drunkard swagger left over from the Boomer's golden era. They were left with delusions of bootstraps, how they were solely responsible for their own success in life. That they did it all themselves and they do not need anyone else, they have no use for anyone else. !@#$ those lowlifes who couldn't use bootstraps like they did. Ignorant of the fact that their success was not solely their own making. That, as an economy, we are all connected to and need one another. That workers are consumers are investors are employers. Or at least, that's how it worked when people had money.

Like Walmart did to Mom and Pop, Wallstreet has consumed finances and wealth management in this nation. Trickle down was, in truth, trickle up. Leeches like Trump grabbed small businesses by the !@#$% and our flavor of capitalism evolved. It changed from empowering the every day American, as the Boomers enjoyed, to sinking small business and funneling wealth straight to the top. Not to the 1%, but towards the 0.001%. The wealth of many has become the wealth of a few.

Baby Boomers remember the "good old days" when the average American was richer, but ignorance was confused for wisdom, and they say !@#$ you towards efforts to maintain the America that once was. To conserve the golden era they once enjoyed. To save our capital from cannibalizing itself and pricing the worker / consumer out of the economy. We need a better flow in goods and services, but the Republicans and their delusions stand in our way.

This I quite strongly agree with. The boomers took advantage of the system their parents paid for and then pulled the ladder up behind them as they became older and wealthier.

They are the worst and most selfish generation in US history.

 

[dyna]

I never the realized the Federal SALT deduction was used as a major funding source for states with income taxes. It seems like the states utilizing SALT were double dipping.

Individuals pay state income tax (state gets income #1)
Individuals pay federal tax, gets SALT deduction --> Feds pay state again (state gets income #2 (some part of SALT deduction?))

 

[fskimospy]

I never the realized the Federal SALT deduction was used as a major funding source for states with income taxes. It seems like the states utilizing SALT were double dipping.

Individuals pay state income tax (state gets income #1)
Individuals pay federal tax, gets SALT deduction --> Feds pay state again (state gets income #2 (some part of SALT deduction?))

I mean there’s no federal payment to the state for the SALT deduction unless you’re saying all deductions and preferential tax rates are de facto payments.

For example do you think Texas and Louisiana are the recipients of massive federal payments because oil companies write off equipment depreciation?

 

[dyna]

I mean there’s no federal payment to the state for the SALT deduction unless you’re saying all deductions and preferential tax rates are de facto payments.

For example do you think Texas and Louisiana are the recipients of massive federal payments because oil companies write off equipment depreciation?

Where is the 2.3 Billion coming from that referenced in OP? I would assume he is referring to Fed payments to states since the reason for the shortfall is because of SALT deduction changes.

 

[fskimospy]

Where is the 2.3 Billion coming from that referenced in OP? I would assume he is referring to Fed payments to states since the reason for the shortfall is because of SALT deduction changes.

He's saying that rich people are engaging in tax avoidance as a result of tax changes, not that the feds aren't paying New York money.

 

[dyna]

He's saying that rich people are engaging in tax avoidance as a result of tax changes, not that the feds aren't paying New York money.

In that case, it sounds like a New York issue and not a SALT issue. How those two things equate is mind boggling. I guess New Yorkers are good at gaming the tax system.

 

[fskimospy]

In that case, it sounds like New York issue and not a SALT issue. How those two things equate is mind boggling. I guess New Yorkers are good at gaming the tax system.

Well his claims are it's a SALT issue because the federal government made NYS state and local taxes cost high income people around 25-30% more. There's a lot of very wealthy people in New York State so I suspect some of what he's saying is true. I would be very surprised if it's close to as large as he claims though.

 

[Genx87]

That is not what this thread is about. Liberals lamenting the loss of SALT deductions is simple hyppcrisy, as it is nothing more than another tax loophole for the wealthy. Why should the federal government provide incentives for high wage earners to park their assets in high tax states?

I live in a high tax area, and I’ve noticed an uptick of residents engaging the political process to question where their property taxes are going. When it was a deduction, they didn’t care. Now, they are suddenly embracing fiscal conservatism. This is healthy. For the wealthy that choose to live in high tax states, they now get to pay more taxes.

As for Cuomo, a Democrat supermajority is a double edged sword. He can no longer hide behind Republicans to do his dirty work in Albany, and the wheels are starting to come off the car. He is on a collision course with Amazon.

This is the thing I don't understand about the complaints about the revision in the tax code. This will hit the wealthy more than the middle class. People who make a lot of money cant deduct huge amounts of property and income tax to reduce their federal tax liability. Caveat, my understanding is the feds also lowered the max deduct for property tax to 500k in valuation? If not disregard previous note about property tax deduction. This is increasing the progressiveness of the tax code and the left loses their shit. So weird.

For avg people their standard deduction will cover what they had to itemize before. But save them the hassle of having to file a schedule A. Tax code simplified accomplished.

What am I missing besides the high state tax states being the most hit?

Disclaimer: I live in a high tax state with a net negative federal tax flow.

 

[Fanatical Meat]

This is the thing I don't understand about the complaints about the revision in the tax code. This will hit the wealthy more than the middle class. People who make a lot of money cant deduct huge amounts of property and income tax to reduce their federal tax liability. Caveat, my understanding is the feds also lowered the max deduct for property tax to 500k in valuation? If not disregard previous note about property tax deduction. This is increasing the progressiveness of the tax code and the left loses their shit. So weird.

For avg people their standard deduction will cover what they had to itemize before. But save them the hassle of having to file a schedule A. Tax code simplified accomplished.

What am I missing besides the high state tax states being the most hit?

Depends where you live, where I live $300-$375k is a normal middle income family home. 3 beds 1 or 2 baths, middle of the road school ranking wise in the State.
This is kind of like the AMT, few will pay now but in the near future many will pay, plus it’s a tax hit on upper middle income to pay for a tax break at the very top of income. That is the real problem.
Also it’s basically Trump telling his base, I’ll tax the people who didn’t vote for me more to punish them.

 

[fskimospy]

This is the thing I don't understand about the complaints about the revision in the tax code. This will hit the wealthy more than the middle class. People who make a lot of money cant deduct huge amounts of property and income tax to reduce their federal tax liability. Caveat, my understanding is the feds also lowered the max deduct for property tax to 500k in valuation? If not disregard previous note about property tax deduction. This is increasing the progressiveness of the tax code and the left loses their shit. So weird.

For avg people their standard deduction will cover what they had to itemize before. But save them the hassle of having to file a schedule A. Tax code simplified accomplished.

What am I missing besides the high state tax states being the most hit?

It's not that weird when you think about it. It comes down to a few things:

1) Middle class taxpayers will likely take a large hit to the value of their homes as this removes preference for middle class home ownership vs. renting. If eliminating this deduction was the goal it should have been phased in at a minimum. Instead, people got blindsided.

2) This was not done to make the tax code more progressive, this was done in part to 'pay for' making the tax code much, much more regressive. Basically taxing the affluent to give money to the super rich. Taking this change in isolation makes no sense considering what it was used for.

3) This is a highly targeted tax increase at politically unfriendly constituencies. Remember how the Republican plan was to eliminate deductions and lower rates? You're supposed to do that for basically the same people.

This really was basically the worst designed piece of major legislation in US history, at least as far as I can remember.

 

[Genx87]

Depends where you live, where I live $300-$375k is a normal middle income family home. 3 beds 1 or 2 baths, middle of the road school ranking wise in the State.
This is kind of like the AMT, few will pay now but in the near future many will pay, plus it’s a tax hit on upper middle income to pay for a tax break at the very top of income. That is the real problem.
Also it’s basically Trump telling his base, I’ll tax the people who didn’t vote for me more to punish them.

Right, unless these things are incremented it all creeps up. AMT is an example of that. And so is the fact that we had 47 million tax returns in 2017 that filed a schedule A. That tells me the standard deduction wasnt keeping up. There was going to be pain felt somewhere with a major tax overhaul. Right now it appears to me it hits upper middle class to wealthy while making life simpler for the middle class. /shrug

 

[fskimospy]

Right, unless these things are incremented it all creeps up. AMT is an example of that. And so is the fact that we had 47 million tax returns in 2017 that filed a schedule A. That tells me the standard deduction wasnt keeping up. There was going to be pain felt somewhere with a major tax overhaul. Right now it appears to me it hits upper middle class to wealthy while making life simpler for the middle class. /shrug

It doesn't make life simpler for the middle class in much of a meaningful way as most of the middle class wasn't itemizing to begin with. (about 30% of people itemize).

And sure, with any major tax overhaul someone is going to feel the pain but doesn't it seem bad to make the upper middle class feel pain in order to cut taxes for the super rich? I know that I for one don't mind paying higher taxes if it's to help people less fortunate than myself. I do have a problem with paying higher taxes so that we can eliminate the estate tax for the idle rich inheriting more money than I'll make in my entire lifetime.

 

[Texashiker]

You really have no fucking clue how any of this works.

Then let's abolish states and just have one large federal territory.

If a state passes a tax, the people of that state should be responsible for paying the tax.

Funny for financially irresponsible tax and spend democrats act when they can no longer spend other peoples money. "I can't spend your money? That's not fair, boohoo."

 

[sactoking]

The SALT deduction existed for two reasons, primarily:

1. It was determined to be good social policy to promote things like home ownership.
2. It has always been conservative economic logic that double taxation of income should be avoided.

Republicans have always been skeptical of #1. Now they have abandoned #2 in favor of "librul tears" as we all know the elimination of SALT is nothing more than an economic "Screw you!"

I'm actually fine with that. Abandoning #2 means that there are now no valid Republican arguments against raising the capital gains and estate tax rates through the roof.

 

[Texashiker]

It doesn't make life simpler for the middle class in much of a meaningful way as most of the middle class wasn't itemizing to begin with. (about 30% of people itemize).

I have a CPA that itemizes EVERYTHING.

Since I run a small business out of my home, everything from my electric bill, to my car insurance, to my cell phone... everything is written off.

What is not written off for my business is written off as farm expenses.

 

[Genx87]

It's not that weird when you think about it. It comes down to a few things:

1) Middle class taxpayers will likely take a large hit to the value of their homes as this removes preference for middle class home ownership vs. renting. If eliminating this deduction was the goal it should have been phased in at a minimum. Instead, people got blindsided.

2) This was not done to make the tax code more progressive, this was done in part to 'pay for' making the tax code much, much more regressive. Basically taxing the affluent to give money to the super rich. Taking this change in isolation makes no sense considering what it was used for.

3) This is a highly targeted tax increase at politically unfriendly constituencies. Remember how the Republican plan was to eliminate deductions and lower rates? You're supposed to do that for basically the same people.

This really was basically the worst designed piece of major legislation in US history, at least as far as I can remember.

1. I looked up the new law. Honestly so busy the last 3 years I cant keep up with a lot of this stuff. I didn't realize the 10K cap also includes property taxes. Ouchy. With that said it appears 1 in 4 were using SALT to reduce their federal tax liability. I suspect this doesnt change a lot for the middle class. But I do expect the upper middle class could see this affect the price of their homes.
2. Well this topic revolves around SALT.
3. If SALT was going to be changed, by nature it is going to hit the higher taxed states. How else would it be approached?

 

[fskimospy]

Then let's abolish states and just have one large federal territory.

If a state passes a tax, the people of that state should be responsible for paying the tax.

Funny for financially irresponsible tax and spend democrats act when they can no longer spend other peoples money. "I can't spend your money? That's not fair, boohoo."

Funny that those 'financially irresponsible' states are the ones propping up conservative states. Can you explain this?

 

[Texashiker]

It has always been conservative economic logic that double taxation of income should be avoided.

I am not sure it is "conservative economic logic that double taxation of income should be avoided"

This is debatable, but I am sure "no tax upon a tax" was meant to stop stuff from being taxed twice.

 

[fskimospy]

1. I looked up the new law. Honestly so busy the last 3 years I cant keep up with a lot of this stuff. I didn't realize the 10K cap also includes property taxes. Ouchy. With that said it appears 1 in 4 were using SALT to reduce their federal tax liability. I suspect this doesnt change a lot for the middle class. But I do expect the upper middle class could see this affect the price of their homes.

In Brooklyn my back of the napkin estimate would be that it will cost the median homeowner somewhere around $200-300 a month in tax benefits, meaning the corresponding mortgage would eventually become $200-300 lower per month to compensate. That's a lot of value.

2. Well this topic revolves around SALT.

Yes but why does it make any sense to ignore why this deduction was removed and what that money was used for? I suspect you would view a tax hike used to pay for a new bridge differently than you would view a similar tax hike used to pay strippers for your local official's birthday party.

3. If SALT was going to be changed, by nature it is going to hit the higher taxed states. How else would it be approached?

We both agree that the SALT elimination will primarily hit the upper middle class, and those sorts of high earners that would be affected by this also live disproportionately in higher tax areas. Why not eliminate the deduction and lower their rates, the very thing Republicans said they wanted to do? The reason is they couldn't because they needed that money to give to rich people.

I'm not even in favor of SALT deductions, but this tax bill was a completely obvious 'fuck you' to unfriendly constituencies as well as an attempt to give rich people the absolute most money possible while staying within reconciliation rules.

 

[Vic]

Funny that those 'financially irresponsible' states are the ones propping up conservative states. Can you explain this?

Today's 'conservatives' live inside their own fantasy world of batshit talk radio straw men.
Almost every blue state in the country pays more in federal taxes than they receive in federal spending, and almost every red state receives more in federal spending than pay in taxes, but somehow they're the financially responsible ones, pulling themselves up by their bootstraps they say.
More than 2/3rds of the country's GDP comes from blue states, but somehow red states are supposedly the business leaders.
And the federal deficit and debt always soars to new highs when a Republican is in the White House, but somehow they're the financially responsible ones.
Yep, somehow.

 

[Texashiker]

Funny that those 'financially irresponsible' states are the ones propping up conservative states. Can you explain this?

Examples please?

You mean like democrat controlled states facing a retirement nightmare? Tax and spend policies only work when you have access to other peoples money. It is just a matter of time before the chickens in New York, California.... come home to roost.

 

[Genx87]

Yes but why does it make any sense to ignore why this deduction was removed and what that money was used for? I suspect you would view a tax hike used to pay for a new bridge differently than you would view a similar tax hike used to pay strippers for your local official's birthday party.

Ha, well that is my version of saying "I dont know enough about the other tax stuff that surrounds this and don't have enough time to devout to learning about it it to debate"

We both agree that the SALT elimination will primarily hit the upper middle class, and those sorts of high earners that would be affected by this also live disproportionately in higher tax areas. Why not eliminate the deduction and lower their rates, the very thing Republicans said they wanted to do? The reason is they couldn't because they needed that money to give to rich people.

I'm not even in favor of SALT deductions, but this tax bill was a completely obvious 'fuck you' to unfriendly constituencies as well as an attempt to give rich people the absolute most money possible while staying within reconciliation rules.

Wouldnt the point be to be revenue neutral? They are supposedly lopping off 30 million people from claiming SALT. Which in theory a lot of them will probably have a lower federal tax liability due to the higher standard deduction. So the upper middle class pay more to off set the loss in revenues.