But the proposal would also eliminate the practice of deducting state income taxes and local property taxes from federal income taxes, and that could harm taxpayers in states
with high local taxes, like New York.
Not exact matches
Most vulnerable are taxpayers
with children —
tax dependents — and who take home equity loan deductions, have capital gains, and have
high state and
local taxes.
But there's one group that isn't feeling quite so confident: residents of states
with their own
high rates of state and
local taxes — or SALT, for short.
«He understands,» Poilievre said of Morneau, «that farmers and
local businesses are furious that he and his government have attacked them
with this draconian
high -
tax plan, and he's feeling that backlash, his MPs are speaking out against him.
This would include deductions for state and
local tax payments, a change that could alienate support from lawmakers in states such as California and New York
with higher state
taxes.
Here are the U.S. states
with the
highest annual combined state and
local income
taxes and property...
Republican lawmakers from
high -
tax states such as New York exited meetings this week
with Kevin Brady, chairman of the
tax - writing committee of the House of Representatives, saying there would be some sort of compromise on repealing the deduction for state and
local tax payments.
With GOP
tax reform slashing deductions for state and
local taxes, retirees in
high -
tax states such as California and New York are wondering whether to stay put or not.
Bond Funds
with Large U.S. Treasuries allocations are considered to be Medium
Tax Efficiency for investors who are subject to high rates of state / local tax on investment income; for other investors, these bond funds should be considered Lower Tax Efficien
Tax Efficiency for investors who are subject to
high rates of state /
local tax on investment income; for other investors, these bond funds should be considered Lower Tax Efficien
tax on investment income; for other investors, these bond funds should be considered Lower
Tax Efficien
Tax Efficiency.
Also, any
tax bill that does away
with or caps state and
local tax deductions could further incentivize individuals living in
high -
tax states that offer preferential treatment to in - state municipal bonds to seek shelter in the bonds of their home states.
It also drives up real estate prices, widens wealth - gaps, reduces
high - tech investment, increases state and
local tax burdens, hurts kids» schools and college education, pushes Americans away from
high - tech careers, and sidelines at least 5 million marginalized Americans and their families, including many who are now struggling
with opioid addictions.
The Senate's approach to state and
local taxes is at odds
with that of the House, where Republicans settled on a compromise — scrapping some of the state and
local deductions but still allowing a deduction of up to $ 10,000 on property
taxes — after GOP lawmakers from
high -
tax states revolted against an initial House plan to scrap the deduction entirely.
Finally, rounding out our list of the top 10 states
with the
highest average deduction for state and
local taxes is Vermont, where 27.41 % of returns took SALT deductions.
With the deduction for state and
local taxes, the federal government is effectively subsidizing
high earners in
high - productivity states and cities.
New York, Connecticut, New Jersey, California, Massachusetts, Illinois, Maryland, Rhode Island and Vermont are the states (plus the District of Columbia)
with the
highest average deduction for state and
local taxes.
The SALT deduction is regressive for several reasons: it is only available for the one - third of taxpayers who itemize deductions, it is more beneficial for those who are paying
higher state and
local taxes, and perhaps most significantly, its benefit goes up
with one's
tax rate.
This unjustifiably rewards
high -
tax states, and because deductions rise
with income (they are worth 39.6 cents per $ 1 at the top, but only 10 cents or less at the bottom), it also rewards areas
with more wealthy taxpayers, even holding state and
local tax rates constant.
And the situation will be even worse, the governor has warned, if the
tax reform plan currently under negotiation on Capitol Hill eradicates New Yorkers» long - standing ability to deduct their state and
local taxes, helping to take the sting out of the fact that they live in the state
with the nation's
highest property
tax burden.
Cuomo's main concern
with the law has been the capping of state and
local tax deductions at $ 10,000 — a move that is seen as harmful to
high -
tax states like New York.
At the time, Manning said one of the city's major problems is that it is one of the
highest tax - exempted communities in the state
with more than 55 percent of the assessed property not paying
local property
taxes.
«For a
high tax state like New York, state and
local tax deductibility has been a very important component of the federal
tax code,» said DiNapoli who said even
with a proposed
higher standard deduction it's still not a «win» for New York taxpayers.
Cuomo also outlined plans to deal
with the federal
tax changes that result in the loss of the state and
local tax deductions, which hits New York and other relatively
high tax states hard.
In a state
with already
high state and
local taxes, fees and assessments on energy —
with roughly 25 cents of every dollar paid for electric power in New York State going to pay government assessments — we believe it is simply counterproductive to continue to add new and increased energy costs on state ratepayers.
He said having worked in elected offices at the
local, county and state level gives him a keen sense of the concerns New Yorkers grapple
with, from
high taxes to providing for their families.
«New York being a state
with higher taxes,
local property
taxes, state
taxes, there's no doubt it would be very disruptive to working families, to middle class families,» said Comptroller Tom DiNapoli, D - New York.
While most New Yorkers will get a
tax break under the new law, Mujica said 1.7 million residents — mostly
higher earning ones from downstate areas where property
taxes are especially
high — will lose the ability to fully deduct their state and
local taxes beginning
with the 2018
tax year.
Teachout spoke to the mostly multi-aged crowd, sprinkled
with children, students, adults and senior citizens, saying that she has a vision for New York that will make public
higher education affordable; a New York that «should be leading the way in renewable resources» and environmental policies; a New York that bans fracking and all fracking byproducts; and a New York that «supports small
local businesses and farms, rather than giving
tax breaks to corporate campaign donors.»
But
high property
taxes in New York have nevertheless persisted and Cuomo has paired the issue
with another pursuit: Reducing the size and scope of
local governments, which he has blamed for
high levies.
The report in question is an annual progress report on the governor's much - touted — or much - criticized, depending on who's talking — START - UP NY economic development program, established in 2013, that allows new or expanding companies
with ties to participating institutions of
higher education to operate without paying most state or
local taxes for 10 years.
Budget experts disagree
with Cuomo's link of
high property
taxes to the number of
local governments and
taxing districts, saying much of the cost is driven by state - sponsored mandates.
Railing against mandated state spending on the
local level — often seen as a top driver of
high property
taxes for municipal governments — is part and parcel
with running for office in New York.
Murphy stood in front of the
local supermarkets and said the same rhetoric «
taxes are too
high»
with no solution and good luck trying to have an engaging conversation
with him.
Republicans from
high tax states like New York are uneasy
with the legislation as it ends deductions for state and
local taxes and caps property
tax deductions at $ 10,000.
The conservative
Tax Foundation, in its annual report, found that New York once again had the highest tax burden of any state in the nation, with 12.7 percent of income going to support state and local tax
Tax Foundation, in its annual report, found that New York once again had the
highest tax burden of any state in the nation, with 12.7 percent of income going to support state and local tax
tax burden of any state in the nation,
with 12.7 percent of income going to support state and
local taxes.
But he says in the long term, the loss of the deduction will only deepen the state's deficits, as
higher income taxpayers leave New York or switch their primary residences to other states
with lower state and
local taxes.
«In doing so, we are competing
with employers in other states and historically,
high (New York) state and
local taxes have been an impediment to employee relocation to the region,» the letter said.
«I say to my Republican friends from suburban districts
with a
high percentage of people who use the state and
local deduction: If you think the results in Virginia and New Jersey were terrible for you, wait until you've passed a bill that raises
taxes on large swaths of middle - class families in your districts,» he said on the Senate floor.
With the arrival of tougher economic times, the county and
local governments eventually came under scrutinty and Rocklanders became upset at their
high taxes and clear government waste.
Officials said that's led to some of the
highest property
taxes in the country as
local governments struggle to keep up
with their exploding pension bills.
Eliminating
local tax deductions is expected to hit states
with high property
taxes, like New York, New Jersey and California, the hardest.
The least poorly funded schools tend to be rural schools in low income rural areas
with an insufficient
local tax base to support them and
with high costs associated
with a lack of economies of scale and large transportation costs for students.
Cuomo outlined plans to deal
with the federal
tax changes that result in the loss of the state and
local tax deductions, which hits New York and other relatively
high -
tax states hard.
Three people familiar
with the commission's deliberations told Capital that rather than an income -
tax cut, which was hinted at by committee co-chair and former governor George Pataki, committee members are instead focusing on some sort of property
tax «circuit - breaker,» where individuals would get a break on
local levies if their property
taxes were adjudged to be too
high as a function of their income.
U.S. Rep. Elizabeth Esty said that when members of the bipartisan Problem Solvers Caucus met
with Treasury Secretary Steven Mnuchin recently, Democrats and Republicans from
high -
tax states voiced opposition to the plan to eliminate the state and
local tax deduction.
Earlier on Monday, a report by Policy in Practice — a group that works
with local authorities on welfare changes — revealed the impact on two - thirds of working
tax credit recipients over the next five years, and suggested that the # 4.4 bn savings from the
tax credits package would be partly offset by
higher housing benefit and council
tax support payments.
The Senate's approach to state and
local taxes is at odds
with that of the House, where Republicans settled on a compromise — scrapping some of the state and
local deductions but still allowing a deduction of up to $ 10,000 on property
taxes — after GOP lawmakers from
high -
tax states revolted against an initial House plan to scrap the deduction entirely.
At a rally in Bed - Stuy this morning, Mayor Bill de Blasio announced a new four - week public relations push
with local clergy members, aimed at Albany lawmakers who oppose his plan to
tax the city's
highest - earners to fund expanded education programs.
Those who will get the biggest
tax increases from the reduction in state and
local tax deductions are those
with the
highest property and income
taxes.
Ken Girardin, an analyst
with the Empire Center for Public Policy, an Albany think tank that advocates for lower
taxes and restrained government spending, said, «These
higher pay figures reflect bad decisions by both
local officials, who signed off on costly deals
with the PBA, and state officials, who refuse to fix the state's binding arbitration system that's rigged» to benefit unions.
Provided an additional $ 76.6 million in
Tax limitation aidfor districts with high residential tax burdens and for districts that provide a high amount of local per pupil fun
Tax limitation aidfor districts
with high residential
tax burdens and for districts that provide a high amount of local per pupil fun
tax burdens and for districts that provide a
high amount of
local per pupil funds.