Andrew Cuomo upset about losing SALT deductions

[glenn1]

Absurd. No state that puts more into the federal kitty than they get back is being subsidized by another state regardless of how that comes to be.

The state (as in the government) isn’t being subsidized genius, the taxpayers of the state are being subsidized. If your federal taxes go down because of your state tax then that’s a subsidy to you. A federal tax subsidy of your state tax obligation. That’s what the word subsidy means. To argue otherwise means you don’t know the definition of basic English language words.

Subsidy: money given by a government or an organization to reduce the cost of producing food, a product, etc. The money is the federal tax break and the thing whose cost is being reduced is the taxpayer’s state tax obligation.

 

[Jhhnn]

The state (as in the government) isn’t being subsidized genius, the taxpayers of the state are being subsidized. If your federal taxes go down because of your state tax then that’s a subsidy to you. A federal tax subsidy of your state tax obligation. That’s what the word subsidy means. To argue otherwise means you don’t know the definition of basic English language words.

Subsidy: money given by a government or an organization to reduce the cost of producing food, a product, etc. The money is the federal tax break and the thing whose cost is being reduced is the taxpayer’s state tax obligation.

Raising federal taxes doesn't reduce state taxes at all. Meanwhile, federal taxes that Californians pay subsidize the residents of low tax red states in an ongoing fashion. They're also subsidizing tax cuts for the uber wealthy, as well.

 

[glenn1]

Raising federal taxes doesn't reduce state taxes at all. Meanwhile, federal taxes that Californians pay subsidize the residents of low tax red states in an ongoing fashion. They're also subsidizing tax cuts for the uber wealthy, as well.

I cannot help it if you cannot understand the definition of what a subsidy is, or refuse to understand that the SALT deduction is a subsidy by definition. Hopefully at some point you gain the capacity to understand the intellectual framework of these things. As of right now your hatred for the wealthy has turned off part of your brain evidently.

You are correct that SALT is not the only subsidy out there. Hundreds if not thousands of examples of subsidies exist out there and most of them are bad, the overwhelming majority of them are trenendously bad ideas. It’s also true that individual taxpayers may on net pay more subsidies to others that they receive subsidies from others. Or on net receive more in subsidies from others.

However with the last paragraph being said we can still examine each subsidy on its own merits for whether we should continue it or not. A subsidy which almost exclusively goes to the wealthy is hard to justify for any reason. A subsidy which seems to have no purpose in furthering some Federal policy objective is hard to justify for any reason. A subsidy which by design excludes the supermajority of the population (simply because they don’t itemize) It’s hard to justify for any reason.

You @Jhhnn have given absolutely no reason whatsoever why this policy of tax subsidies for state income tax should be continued apart from “They only did it to screw with blue state people.” It both reveals your concerns to be exclusively partisan and tribal in nature and shows you lack the self-awareness and introspection needed to evaluate a policy in a logically and morally consistent manner. If anything I would have expected you to have been leading the charge against a tax subsidy primarily for the rich, who live in the richest parts of the country, when you yourself have called for higher taxes up on those same rich people.

 

[Jhhnn]

As of right now your hatred for the wealthy has turned off part of your brain evidently.

I just hate it when wealthy right wing billionaires buy off the GOP to keep their effective tax rates lower than the rest of the top 10% and to set them even lower. If you want to talk about what subsidies are & aren't justifiable you can start with that one. Until then you're just muddying the waters.

 

[Vic]

In this thread, I learned that conservatives will go to great lengths to defend a tax on a tax, as long as it owns the libtards.

 

[glenn1]

I just hate it when wealthy right wing billionaires buy off the GOP to keep their effective tax rates lower than the rest of the top 10% and to set them even lower. If you want to talk about what subsidies are & aren't justifiable you can start with that one. Until then you're just muddying the waters.

I think you are confusing the definitions of two very different words; Subsidize versus socialize.

SALT deductions subsidize the cost of state income tax burdens for (primarily if not almost exclusively) wealthy people.

Lowering the tax rates of the top 10% socializes the costs of government spending not paid in part by foregone tax revenues not collected and thus added to the national debt.

Those are two entirely different sets of concerns. They each have their own set of moral and political considerations and tradeoffs being made in deciding how to resolve them. What they most emphatically do not share however is a need to tie them together. The proper tax rate for the 10% has nothing whatsoever to do with whether a particular tax subsidy should exist or not. That’s true no matter whether the subsidy is for Amtrak, Texas oil drillers, Iowa corn farmers, or some rich dude in California for his state income taxes.

I hold that absent extraordinary circumstances or moral justification, Government subsidies are always a bad idea and that’s true no matter who gets them or who pays them. You can argue in good faith about whether subsidies should exist as a general principle. You can support them in general in good faith for even weak reasons that make little sense (like SALT). What you cannot do in good faith is first to check to see whom the Subsidies go to ensure they have the “correct” political viewpoints before you decide if the subsidy is a good one or not. A subsidy to a rich person is either a good idea or bad idea; It makes no difference if the rich person in question is a conservative in a red state or a progressive in a blue state.

 

[Jhhnn]

I think you are confusing the definitions of two very different words; Subsidize versus socialize.

SALT deductions subsidize the cost of state income tax burdens for (primarily if not almost exclusively) wealthy people.

Lowering the tax rates of the top 10% socializes the costs of government spending not paid in part by foregone tax revenues not collected and thus added to the national debt.

Those are two entirely different sets of concerns. They each have their own set of moral and political considerations and tradeoffs being made in deciding how to resolve them. What they most emphatically do not share however is a need to tie them together. The proper tax rate for the 10% has nothing whatsoever to do with whether a particular tax subsidy should exist or not. That’s true no matter whether the subsidy is for Amtrak, Texas oil drillers, Iowa corn farmers, or some rich dude in California for his state income taxes.

I hold that absent extraordinary circumstances or moral justification, Government subsidies are always a bad idea and that’s true no matter who gets them or who pays them. You can argue in good faith about whether subsidies should exist as a general principle. You can support them in general in good faith for even weak reasons that make little sense (like SALT). What you cannot do in good faith is first to check to see whom the Subsidies go to ensure they have the “correct” political viewpoints before you decide if the subsidy is a good one or not. A subsidy to a rich person is either a good idea or bad idea; It makes no difference if the rich person in question is a conservative in a red state or a progressive in a blue state.

Obfuscating madly. Tax cuts for billionaires obvious go to billionaires of any political persuasion. It is, however, right wing billionaires who are paying off the GOP to have them.

 

[dyna]

Obfuscating madly. Tax cuts for billionaires obvious go to billionaires of any political persuasion. It is, however, right wing billionaires who are paying off the GOP to have them.

The SALT deduction change closes a loophole for the wealthy(top 5%) and billionaires that they were exploiting in certain states to circumvent their full obligation to federal taxes. The other 95% were paying their full obligation to feds.

This is a tax change that makes taxes more progressive. It is making the wealthy pay more tax, it so happens that they were able to game the system in blue states. The tax rate changes on the rich makes this SALT tax change a wash for the most part(In the current year). However, If i'm reading the link below correctly, the wealthy will be paying more tax by 2025.

https://taxfoundation.org/salt-deduction-repeal-analysis/

You are a liberal, why are you against this?

 

[fskimospy]

The SALT deduction change closes a loophole for the wealthy(top 5%) and billionaires that they were exploiting in certain states to circumvent their full obligation to federal taxes. The other 95% were paying their full obligation to feds.

This is a tax change that makes taxes more progressive. It is making the wealthy pay more tax, it so happens that they were able to game the system in blue states. The tax rate changes on the rich makes this SALT tax change a wash for the most part(In the current year). However, If i'm reading the link below correctly, the wealthy will be paying more tax by 2025.

https://taxfoundation.org/salt-deduction-repeal-analysis/

You are a liberal, why are you against this?

Because tax changes do not happen in isolation. SALT is a deduction that rich people use, yes. It is also a deduction that middle and upper middle class people use.

Rich people got their taxes increased by this one provision but that was in the context of overall tax changes that gave them COLOSSAL, regressive tax cuts overall. Upper middle class people just got their taxes increased in order to give rich people a bigger tax cut. The real income inequality problem is not between the 80% and the 20%, it’s between the 0.1% and the 99.9%. This change made that worse.

While I think we all agree the tax system needs to become more progressive this change was made to enable even more regressive policies that further enriched the ultra rich. If you had eliminated SALT to help lower income families I would be totally in support of getting rid of it as I agree, it’s regressive. That’s not what actually happened though.

 

[Jhhnn]

The SALT deduction change closes a loophole for the wealthy(top 5%) and billionaires that they were exploiting in certain states to circumvent their full obligation to federal taxes. The other 95% were paying their full obligation to feds.

This is a tax change that makes taxes more progressive. It is making the wealthy pay more tax, it so happens that they were able to game the system in blue states. The tax rate changes on the rich makes this SALT tax change a wash for the most part(In the current year). However, If i'm reading the link below correctly, the wealthy will be paying more tax by 2025.

https://taxfoundation.org/salt-deduction-repeal-analysis/

You are a liberal, why are you against this?

Because it's targeted at upper middle class residents of high tax blue states while failing to address regressive taxation at the tippy top.

As the rich become super-rich, they pay lower taxes. For real. - The Washington Post

Only when we tax LTCG's at the same rate as earned income will that be corrected.

 

[glenn1]

The SALT deduction change closes a loophole for the wealthy(top 5%) and billionaires that they were exploiting in certain states to circumvent their full obligation to federal taxes. The other 95% were paying their full obligation to feds.

This is a tax change that makes taxes more progressive. It is making the wealthy pay more tax, it so happens that they were able to game the system in blue states. The tax rate changes on the rich makes this SALT tax change a wash for the most part(In the current year). However, If i'm reading the link below correctly, the wealthy will be paying more tax by 2025.

https://taxfoundation.org/salt-deduction-repeal-analysis/

You are a liberal, why are you against this?

I suppose as an alternative we can return unlimited SALT deductions (though they're stupid) so long as claiming it then disallowed you to take the AMT exemption ($109,400 in 2018 with phaseouts at higher income and being zeroed out at $1mm). Either way the wealthy blue state urban class (ahem, the self-proclaimed "upper middle class" per @Jhhnn ) should lose their subsidy from the rest of Americans and pay their full moral share of the load.

Because it's targeted at upper middle class residents of high tax blue states while failing to address regressive taxation at the tippy top.

As the rich become super-rich, they pay lower taxes. For real. - The Washington Post

Only when we tax LTCG's at the same rate as earned income will that be corrected.

Index LTCG for inflation and we can make that deal right now. And what's your point even if it were "targeted at upper middle class residents of high tax blue states?" Should your type of person be exempted from any/all consideration of higher taxes that upper middle class citizens of lower tax red states already pay?

 

[dyna]

Because it's targeted at upper middle class residents of high tax blue states while failing to address regressive taxation at the tippy top.

As the rich become super-rich, they pay lower taxes. For real. - The Washington Post

Only when we tax LTCG's at the same rate as earned income will that be corrected.

According to that 2015 article the .001% payed an adjusted 17%. How could they achieve that? Maybe it was related to the SALT deductions. Check out this article, it indicates the ultra-rich are panicking about the SALT changes. https://www.accountingtoday.com/art...duction-cap-haters-find-moving-isnt-that-easy

The fact is that NY has been a tax safe haven for the ultra-rich until this tax change.

Of course that data doesn’t account for movement among certain groups, like the ultra-rich, for whom the tax savings may just be too great to ignore. In recent years, hedge fund titans including David Tepper, Paul Tudor Jones and Eddie Lampert have moved to Florida. This year, some money managers are planning to relocate as Miami and Palm Beach officials ramp up their advertising efforts following the new $10,000 limit on state and local tax deductions.

 

[glenn1]

According to that 2015 article the .001% payed an adjusted 17%. How could they achieve that? Maybe it was related to the SALT deductions. Check out this article, it indicates the ultra-rich are panicking about the SALT changes. https://www.accountingtoday.com/art...duction-cap-haters-find-moving-isnt-that-easy

The fact is that NY has been a tax safe haven for the ultra-rich until this tax change.

"Tax the rich!" quickly gets followed by "Wait, I didn't mean me!" accompanied with an Obi-Wan Kenobi force hand wave "these aren't the droids rich people you're looking for."

 

[Jhhnn]

Index LTCG for inflation and we can make that deal right now. And what's your point even if it were "targeted at upper middle class residents of high tax blue states?" Should your type of person be exempted from any/all consideration of higher taxes that upper middle class citizens of lower tax red states already pay?

Residents of low tax states pay lower total taxes. It's the bottom line that counts, not which govt entity collects the taxes.

 

[glenn1]

Residents of low tax states pay lower total taxes. It's the bottom line that counts, not which govt entity collects the taxes.

So you're not actually in favor of the rich paying higher taxes, you're in favor of the rich in states that aren't yours paying higher taxes. And by definition @Jhhnn is excluded from being rich. It's completely unsurprising that you are that unabashedly self-serving since that's patently obvious but I figured you'd at least make some effort at pretending your beliefs about taxing the rich (and not just some of them) aren't completely insincere.

 

[Jhhnn]

The fact is that NY has been a tax safe haven for the ultra-rich until this tax change.

Your linked article does not support that conclusion.

 

[Jhhnn]

So you're not actually in favor of the rich paying higher taxes, you're in favor of the rich in states that aren't yours paying higher taxes. And by definition @Jhhnn is excluded from being rich. It's completely unsurprising that you are that unabashedly self-serving since that's patently obvious but I figured you'd at least make some effort at pretending your beliefs about taxing the rich (and not just some of them) are insincere.

So dishonest. Is there some part of taxing LTCG's at earned income rates that affects residents of some states & not others?

 

[glenn1]

So dishonest. Is there some part of taxing LTCG's at earned income rates that affects residents of some states & not others?

No they are taxed consistently on LTCG no matter what state they live in, that's kinda the point and why SALT should follow the same model. That would hold true no matter what the LTCG rate was.

Another alternative could be for the federal government to tax (as income) the revenue from state government taxes. Then it wouldn't matter if SALT deductions existed or not as the value of the subsidy to rich residents of high tax states would be recouped by the federal government.

 

[Viper1j]

This is hilarious, democrats in high tax states flailing around screeching about lost tax revenue.

https://twitter.com/x/status/1092484663933837312

If a state passes a tax, why should the federal government subside that tax? Someone in Texas should not be subsidizing high taxes in New York, California... etc.

Local taxes should be the responsibility of the people who reside in that state, and nobody else.

I would like to see all SALT deducations removed from federal taxes. You pass it, you pay it.

Simple solution: Cook your books like a chef, and make sure Donny doesn't get a penny of your money. Donate one suit you haven't worn in years to your local church clothing drive, and take a deduction of the 750.00 you paid for it. Same for shoes. Old watches are the best 500.00 - 2500.00 100% deduction. Get your tax liability down to zero. And watch Donny spend pennies.

The blues states have been supporting poor ignorant red states since the Civil War.

 

[fskimospy]

According to that 2015 article the .001% payed an adjusted 17%. How could they achieve that? Maybe it was related to the SALT deductions. Check out this article, it indicates the ultra-rich are panicking about the SALT changes. https://www.accountingtoday.com/art...duction-cap-haters-find-moving-isnt-that-easy

The fact is that NY has been a tax safe haven for the ultra-rich until this tax change.

Nothing in your article says that New York State has been a safe tax haven, it says that people can't easily move. The primary reason is that super high earners usually can't replicate their earnings anywhere so even if they moved their residence from New York if you're running a hedge fund based in New York you're still going to pay New York taxes. The .001% primarily pay such a low rate not because of state and local tax deductions but because their income doesn't come from wages, it comes from tax advantaged earnings like long term capital gains and things like that. This tax bill was a bonanza for the .001% and any losses from SALT were more than made up for by gains elsewhere.

So again, the issue here is that taxes were raised on the upper middle class in order to give more money to rich people. If you want to get rid of state and local tax deductions I'm totally on board, but not if I'm paying more in taxes so people richer than me can pay less.

 

[glenn1]

Nothing in your article says that New York State has been a safe tax haven, it says that people can't easily move. The primary reason is that super high earners usually can't replicate their earnings anywhere so even if they moved their residence from New York if you're running a hedge fund based in New York you're still going to pay New York taxes. The .001% primarily pay such a low rate not because of state and local tax deductions but because their income doesn't come from wages, it comes from tax advantaged earnings like long term capital gains and things like that. This tax bill was a bonanza for the .001% and any losses from SALT were more than made up for by gains elsewhere.

So again, the issue here is that taxes were raised on the upper middle class in order to give more money to rich people. If you want to get rid of state and local tax deductions I'm totally on board, but not if I'm paying more in taxes so people richer than me can pay less.

There's no reason to create an artificial linkage between what future SALT deductions should be and what marginal tax rates would be. Indeed I thought you just bitterly complained about the GOP linking unrelated concepts (e.g. border wall and funding government) to gain concessions on one. You can simply say "I'm aboard with getting rid of SALT" and stop there, creating an additional tie to other tax considerations is nothing but a red herring.

 

[fskimospy]

There's no reason to create an artificial linkage between what future SALT deductions should be and what marginal tax rates would be. Indeed I thought you just bitterly complained about the GOP linking unrelated concepts (e.g. border wall and funding government) to gain concessions on one. You can simply say "I'm aboard with getting rid of SALT" and stop there, creating an additional tie to other tax considerations is nothing but a red herring.

This is ignorant and wrong on so many levels I don't know where to start. Saying that we should examine the effects of tax changes in their totality is simply common sense and it's insane that you or anyone would attempt to argue we should instead do everything issue by issue. That would be about the best way possible to demolish a functioning tax system.

1) Trading one policy you prefer for another policy you do not prefer is literally how legislative compromise works and how legislation has been crafted throughout all of human history.
2) Saying that linkages between tax policies that both directly affect the amount of tax large swaths of the population pay are 'artificial' is... mystifying.
3) Attempting to equate legislative compromise with Republicans shutting down the basic functions of government until they get what they want is either insanely ignorant or insanely dishonest.

So yes, in any discussion of tax changes there will always be linkages between rates, deductions, etc. If you don't like it you will need to create your own new country and legislature because that's how tax policy works on the entire planet.

EDIT: So no, I am not aboard with getting rid of SALT. I am aboard with it so long as my other requirements are met.

 

[zinfamous]

According to that 2015 article the .001% payed an adjusted 17%. How could they achieve that? Maybe it was related to the SALT deductions. Check out this article, it indicates the ultra-rich are panicking about the SALT changes. https://www.accountingtoday.com/art...duction-cap-haters-find-moving-isnt-that-easy

The fact is that NY has been a tax safe haven for the ultra-rich until this tax change.

lol @ "NY is a tax haven." Now that is fucking rich. I do like how you are trying to make this argument by showing us how wealthy NYers are specifically moving to a state like FL....to hide their wealth.

 

[fskimospy]

lol @ "NY is a tax haven." Now that is fucking rich. I do like how you are trying to make this argument by showing us how wealthy NYers are specifically moving to a state like FL....to hide their wealth.

Yes he seems to be missing the point that state and local tax deductions do not actually lower your overall taxes as compared to simply not paying those taxes to begin with.

 

[glenn1]

This is ignorant and wrong on so many levels I don't know where to start. Saying that we should examine the effects of tax changes in their totality is simply common sense and it's insane that you or anyone would attempt to argue we should instead do everything issue by issue. That would be about the best way possible to demolish a functioning tax system.

1) Trading one policy you prefer for another policy you do not prefer is literally how legislative compromise works and how legislation has been crafted throughout all of human history.
2) Saying that linkages between tax policies that both directly affect the amount of tax large swaths of the population pay are 'artificial' is... mystifying.
3) Attempting to equate legislative compromise with Republicans shutting down the basic functions of government until they get what they want is either insanely ignorant or insanely dishonest.

So yes, in any discussion of tax changes there will always be linkages between rates, deductions, etc. If you don't like it you will need to create your own new country and legislature because that's how tax policy works on the entire planet.

EDIT: So no, I am not aboard with getting rid of SALT. I am aboard with it so long as my other requirements are met.

We're not Congressmen negotiating a comprehensive tax reform, we're discussing the independent question of whether SALT deductions should be capped or not. You seem to be perfectly capable of discussing your opinion of a border wall as a standalone proposition (opposed) without needing to link it to a complete overhaul of immigration policy. Your responses in this thread basically boil down to "Capping SALT impacts me personally, so I won't agree to it even if it goes against my principles unless you give me another concession."

Holy cow the mental contortions you and those on your political side are going through to rationalize something that benefits you is mind boggling. To prove my point let's make the SALT deduction inversely related to how much state income tax you pay (e.g. the less state tax you pay, the less federal income tax you pay)? If that passed would you then accept that without question and allow the resulting federal tax subsidies to red states to go on in perpetuity unless/until you got some unrelated tax reform? Of course you wouldn't, you'd be out in the streets protesting and burning cars about how unfair it was and how "those evil rich folks in red states" were taking advantage of the system to reduce their tax payments beyond what you thought was proper.