You Need to Pay my Taxes

No.  No way in H E Double Toothpicks.

New York Governor Andrew Cuomo [D] visited the White House on Tuesday to urge President Donald Trump to rethink a provision in the 2017 tax overhaul that Cuomo says is prompting a sharp decline in state revenues.
The Democratic governor met with the Republican president to discuss the $10,000 cap on the federal deduction for state and local taxes—known as SALT.
Cuomo said the cap is prompting wealthy residents to flee New York and contributing to a recent drop of more than $2 billion in tax receipts.

If there’s a drop in State tax receipts from this, there are two intertwined parts to the obvious solution, and they don’t include raising the Federal taxes on everyone else so New York (and New Jersey and California) can continue their profligate ways.  Those two parts are reducing the States’ current usurious tax rates to more reasonable levels and reducing spending to fit within those collection levels.

Then step back and watch the increased economic activity that will result increase the prosperity of all the citizens of the State—and enjoy the increased revenues to the State that will result from the increased economic activity.

Aside: the AP‘s own distortion: Residents in high-tax states such as New York, New Jersey and California could see substantial increases in their federal tax bills this year because of the deduction cap. No, they won’t.  They may well see their total Federal and State tax bill go up, but that’s due entirely to the increase taxes owed the States from their high tax structure.

One thought on “You Need to Pay my Taxes

  1. Disagree re that last – their federal tax bill will increase, as their taxable income will be reduced less (in some cases, a great deal less). Ex: 2017 federal taxable income reduced by $50,000 of state and local income tax paid (plausible, given Wall St. or law partner income) and $10,000 local property tax paid vs. 2018 federal taxable income reduced by only $10,000 total. That’s an increase of $50,000 in taxable income at the federal level. Being marginal income, at 35% rate, that’s a tax increase of $17,500.

    In this year (2018 taxable income), the bracket boundaries don’t shift that much, and the marginal rates don’t either. The doubled standard deduction makes no difference to these folks – they were itemizing. And they lost the personal exemption, so that’s a further increase in federal table income, by $4,150/person.

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