Tuesday, May 02, 2017

Trump will test Democrats' tax patriotism: Glenn Reynolds

Trump will test Democrats' tax patriotism: Glenn Reynolds
"Democrats have been saying for years that we need tax increases, and that paying taxes is one of the greatest forms of patriotism. 
Image result for pay your fair shareNow it looks like President Trump is going to put their beliefs to the test.
Trump’s new tax plan would hit blue states hardest, by eliminating the federal deductibility of state income and property taxes. 
That’s going to make it harder for blue states to maintain the high tax rates they’ve traditionally levied.
Right now, if you pay state property or income taxes, you can deduct them against your federal income taxes. 
In effect, it means that if you’re in a high federal bracket, your state taxes may be offset by that federal deduction to the tune of 40% or more.
End the federal deduction, though, and high state taxes come straight out of taxpayers’ pockets with no offset.  
As economist Nicole Kaeding told The Hill, by allowing deductions for state taxes, “the federal government is essentially subsidizing high tax rates in states like California and New York...”

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