Closing Tax Loopholes is Treason

[ninjabread]

Keeping deductibility in place means those of us in places with low state and local tax burdens pay more federal income tax, thereby subsidizing the taxpayers of places such as New York. No wonder Cuomo is so worked up.

So you're OK with letting some of our citizens getting taxed twice?

If the politicians in New York are opposed to double taxation of income, they can change their tax laws to allow residents to deduct Federal income tax and FICA on their state income tax returns. See, that was easy.

[rotor]

Keeping deductibility in place means those of us in places with low state and local tax burdens pay more federal income tax, thereby subsidizing the taxpayers of places such as New York. No wonder Cuomo is so worked up.

So you're OK with letting some of our citizens getting taxed twice?

If the politicians in New York are opposed to double taxation of income, they can change their tax laws to allow residents to deduct Federal income tax and FICA on their state income tax returns. See, that was easy.

I like that.


For someone making $75,000 a year in NY
Salary75,000.00 USD
Federal Income Tax- 11,968.75 USD
Social Security- 4,650.00 USD
Medicare- 1,087.50 USD
State Income Tax- 4,015.30 USD
Total Tax- 21,721.55 USD
Net Pay $53,278.45 USD
28.96% average tax rate
39.10% marginal tax rate
They get to deduct $4,015.30 that you don't get to deduct if you live in Texas with the same situation. I am not a tax expert but I guess they deduct this from their income and they therefore pay less federal tax. I don't think this is a tax credit. For the average person the deduction raised to $4,000 may make up for this. It is the high earners that will get hurt by this, those that are paying big bucks in state income tax that will lose that deduction. Therefore this is not a giveaway to the rich, just the reverse especially if they are in high tax rate states.

[Captain Matt]

Any plan to make Federal income tax more fair by closing loopholes will face opposition from the guy using loopholes to pay less Federal income tax than the other guy. It's human nature.

[cyphur]

Keeping deductibility in place means those of us in places with low state and local tax burdens pay more federal income tax, thereby subsidizing the taxpayers of places such as New York. No wonder Cuomo is so worked up.

So you're OK with letting some of our citizens getting taxed twice?

If the politicians in New York are opposed to double taxation of income, they can change their tax laws to allow residents to deduct Federal income tax and FICA on their state income tax returns. See, that was easy.

The Federal government should bend around the State, not the other way around. This is a very similar slope, slippery as it is, as we discuss other issues with the Feds, et al.

I am not advocating that NY's tax strategy/rules/laws are solid. I don't have to deal with them. What I do have issues with is not advocating a path that maintain's State's rights when it comes to managing their own citizens.

[rotor]

Keeping deductibility in place means those of us in places with low state and local tax burdens pay more federal income tax, thereby subsidizing the taxpayers of places such as New York. No wonder Cuomo is so worked up.

So you're OK with letting some of our citizens getting taxed twice?

If the politicians in New York are opposed to double taxation of income, they can change their tax laws to allow residents to deduct Federal income tax and FICA on their state income tax returns. See, that was easy.

The Federal government should bend around the State, not the other way around. This is a very similar slope, slippery as it is, as we discuss other issues with the Feds, et al.

I am not advocating that NY's tax strategy/rules/laws are solid. I don't have to deal with them. What I do have issues with is not advocating a path that maintain's State's rights when it comes to managing their own citizens.

cyphur, what do you mean? Should a state be able to raise taxes to the 90% level and then the individual would get a refund on their federal taxes? Right now New Yorkers pay less federal tax than Texans with the same income because they can deduct state income tax and we can't. The only fair solution would be to eliminate state income tax deductions or for Texas to start a state income tax so that we would have the honor of paying more into the state and less to the feds. Which one maintains the military?

My preference is less tax for everyone but if I have to pay one tax it would be for the force that protects us from overseas invasion and that is the military and that is the feds.

[BBYC]

I am not advocating that NY's tax strategy/rules/laws are solid. I don't have to deal with them. What I do have issues with is not advocating a path that maintain's State's rights when it comes to managing their own citizens.

How do more fair and equitable national tax laws interfere with state rights?

If somebody earns $100,000 in wages in the United States they should pay the same US income tax no matter what state they live in, no matter how many houses and cars they own, no matter how many spouses and children they have, etc. It's income tax and should tax income not spending. If Congress wants to tax spending that's what a sales tax is for. Don't try to jam a square peg into a round hole.

[anygunanywhere]

There isn't one thing fair about federal income tax.

The only fair tax is one that EVERYONE pays.

[BBYC]

There isn't one thing fair about federal income tax.

The only fair tax is one that EVERYONE pays.

That's why they should close the loopholes and have one flat rate on income, rich and poor, old and young, married and single, etc.

[Abraham]

I agree with BBYC.

Back when Forbes ran for President, he had it right.

One flat tax would clear up all the nonsensical tax mess.

Then maybe we could get rid of the IRS too...

[Soccerdad1995]

Keeping deductibility in place means those of us in places with low state and local tax burdens pay more federal income tax, thereby subsidizing the taxpayers of places such as New York. No wonder Cuomo is so worked up.

So you're OK with letting some of our citizens getting taxed twice?

If the politicians in New York are opposed to double taxation of income, they can change their tax laws to allow residents to deduct Federal income tax and FICA on their state income tax returns. See, that was easy.

The Federal government should bend around the State, not the other way around. This is a very similar slope, slippery as it is, as we discuss other issues with the Feds, et al.

I am not advocating that NY's tax strategy/rules/laws are solid. I don't have to deal with them. What I do have issues with is not advocating a path that maintain's State's rights when it comes to managing their own citizens.

I think I understand your point, but I disagree with it.

States should have the right to levy taxes on their citizens as they see fit. And the federal government should also have the right to tax those same citizens as they see fit. I do not see how independent and separate taxing powers infringe on the rights of either states, or the federal government.

I think we may agree that in a perfect world, states (and municipalities) would provide for the vast majority of citizens needs. The federal government would only be called upon to do those things which states could not effectively do on their own, or through co-operation with neighboring states. This would be things like settling disputes between states on rights to shared natural resources, co-ordination of national defense (the forces for which would primarily be provided and funded by the states), etc. In short 95% of the money spent by Washington DC would no longer need to be spent. State spending would go up instead. This would be a very good thing for a number of reasons.

But as long as we are going to have the federal government do way more than they should, IMHO, they need a way to pay for those things. And I don't see why a resident of Texas should pay more to the federal government than a resident of California or New York, just because Texans have decided that they value fiscally responsible state government that does not need to tax us heavily so they can pay for all the needs of any illegal immigrants who happen to reside here, etc. Forcing Texans to pay a higher portion of federal government spending is not consistent with states' rights, IMHO. You could even argue that it might violate the equal protection clause.

Here is a compromise. Keep the full deductibility of State And Local Taxes (SALT) for anyone making less than $100,000 a year. Phase it out between $100,000 and $200,000 and the richest 8% (or so) of tax payers get no SALT deduction. Let Chuck and Nancy rail against that plan all they want. The republicans could simply respond that this would have no negative impact at all on the middle class.

[rotor]

Here is a compromise. Keep the full deductibility of State And Local Taxes (SALT) for anyone making less than $100,000 a year. Phase it out between $100,000 and $200,000 and the richest 8% (or so) of tax payers get no SALT deduction. Let Chuck and Nancy rail against that plan all they want. The republicans could simply respond that this would have no negative impact at all on the middle class.

Why compromise? If you make $100,000 in NY or in Texas pay the same Federal tax. If you make $20,00 in NY or in Texas pay the same tax. If you make $10,000,000 in NY or Texas pay the same federal tax. Why give NY something Texas doesn't have? Are they better than us?

[Abraham]

Once out of the city, the NY state folk are good folks.

Salt of the earth.

How do I know?

I worked on a dairy farm in upstate New York as an 11 year old. Learned how to drive by driving a stick shift tractor pulling a hay baler which in turn was pulling a wagon with 3 men loading/stacking the bales.

Since the bales weighed roughly a 100 lbs., I was given the job of running the tractor.

My instructions: Get on the tractor and drive. My clutch releasing was ragged to begin with but smoothed out quickly.

Now, back to boring old tax talk.

[Soccerdad1995]

Here is a compromise. Keep the full deductibility of State And Local Taxes (SALT) for anyone making less than $100,000 a year. Phase it out between $100,000 and $200,000 and the richest 8% (or so) of tax payers get no SALT deduction. Let Chuck and Nancy rail against that plan all they want. The republicans could simply respond that this would have no negative impact at all on the middle class.

Why compromise? If you make $100,000 in NY or in Texas pay the same Federal tax. If you make $20,00 in NY or in Texas pay the same tax. If you make $10,000,000 in NY or Texas pay the same federal tax. Why give NY something Texas doesn't have? Are they better than us?

Why compromise, because compromise may actually get this thing passed. If we pass nothing we are much worse off than we would be under my proposed compromise. That is why we might want a compromise on this.

[powerboatr]

Keeping deductibility in place means those of us in places with low state and local tax burdens pay more federal income tax, thereby subsidizing the taxpayers of places such as New York. No wonder Cuomo is so worked up.

So you're OK with letting some of our citizens getting taxed twice?

If the politicians in New York are opposed to double taxation of income, they can change their tax laws to allow residents to deduct Federal income tax and FICA on their state income tax returns. See, that was easy.

[rotor]

Here is a compromise. Keep the full deductibility of State And Local Taxes (SALT) for anyone making less than $100,000 a year. Phase it out between $100,000 and $200,000 and the richest 8% (or so) of tax payers get no SALT deduction. Let Chuck and Nancy rail against that plan all they want. The republicans could simply respond that this would have no negative impact at all on the middle class.

Why compromise? If you make $100,000 in NY or in Texas pay the same Federal tax. If you make $20,00 in NY or in Texas pay the same tax. If you make $10,000,000 in NY or Texas pay the same federal tax. Why give NY something Texas doesn't have? Are they better than us?

Why compromise, because compromise may actually get this thing passed. If we pass nothing we are much worse off than we would be under my proposed compromise. That is why we might want a compromise on this.

There are many ways to compromise on a bill but if I said the only way for this bill to pass is for Soccerdad to pay more than his fair share is that what you want? We all get the same benefits from a federal government and we should all get penalized equally, correct? Any federal tax system that favors a NY taxpayer over a Texas taxpayer with the same income should be illegal. What we have now should be illegal. Obamacare does that now with giving states that accepted medicaid funding a leg up. Another reason to dump Obamacare but many republican governors have sold their souls (Ohio) on this. We are actually doing NY residents a favor by closing this loophole as perhaps they can vote in people that won't tax them so much. We had a revolution once for taxation without representation. The present tax system favors the rich as they pay the most tax in NY and therefore get the most federal deduction. Do the rich need more (or continued) loopholes? Is this going to be tax reform or will the rich still have favored loopholes? Your compromise continues this loophole for the rich. That's probably the way it should be argued that we are after a middle class tax bill, not one for the rich.

To Abraham, New Yorkers outside of NYC are good people. I happen to have been born in The Bronx and I don't know too many good NYC people. Look who their mayor is. They keep voting for progressive people. Weiner might have been better.