It's tax month boys and girls! I thought I knew as much as our federal tax programs as anyone. I was wrong.
As you wind your way your way through your tax prep, when you come to deductions, you come to that line that allows you to deduct from your federal taxes, all state and local taxes that you paid in to your state of residence. Sounds great, right? Well, no.
This past week I just read an exhaustive article in the L.A. Times which decries Congressional Republicans' plan to eliminate the deduction for state and local taxes. And when I looked at the federal deduction California enjoys, I truly wished I'd been wearing Depends! $101 billion dollars every year to give California taxpayers a break on their funding of wasteful liberal spending, much of it that allows illegal Mexicans to prosper.
I gave it a lot of thought and am now more than willing to give up my local and state tax deduction. If those deductions are allowing California and New York to fund their sanctuary cities I want to end it. And I no longer want to fund San Francisco's mandate that their municipal residents conform to bizarre and expensive climate change and environmental laws. And, as one can see in the chart above, California and New York, America's liberal bastions, suck most of our federal tax dollars back to their states....to fund their liberal agenda.
The Congressional Budget Office reported that the local and state tax deductions accounts for $1.3 trillion dollars each year, money that might better be used for infrastructure projects or, oh hell, paying down the national debt.
And, as with any tax deduction, the biggest local and state tax deductions favor those rich folks up in Silicon Valley and the liberal Hollywood types. As Republicans work on tax reform I'm hoping that, as a minimum, they limited state and local tax deductions for those who make less than $75,000 or so a year. With the two biggest hogs, California and New York, putting a stop to the federal piggy bank would accomplish a couple of things. It would force those two states to pay for their own wasteful liberal programs, and in California's case it would stop that state from enlarging the welcome mat for millions of illegal Mexican invaders.
If the liberal states want to fund their socialist policies let them do it without the tax dollars of us in the other 48 states. It's far past time for California stop sucking us dry to advance their liberal agenda. Maybe, just maybe, California taxpayers will revolt when they no longer can write off their state masters' massive spending programs.
6 comments:
is it interesting that these are mostly "Blue States"?
and is it interesting that the "Red States" are mostly the takers from the Federal Government?
at any rate, sure, the Federal Government needs Money, always, and it is best to find it where it is. People making less than $75,000 a year pay enough, it is time for the Rich (States, People, Corporations, Capital Gains Takers) to pay their share. Cruise Missiles cost Money, somebody gots to pay!
I'm not sure you got my point, Jerry. Allowing taxpayers to write off their local and state taxes creates an environment where badly managed states can at least partly alleviate the pain by writing off that mis-spent cash on their federal returns. it is not fair to those states who have sound financial principles. I'm not surprised by your call for the rich to pay more, but of course the one that always sticks in my craw is your continuing campaign to have "capital gain takers" to somehow pay more than someone whose paying on earned income. I will always believe that anyone who puts their money at risk, who have no assurance of payback, should get a discount from the earned income tax. Without those "capital gainers" we would not have the blooming of innovative businesses that, despite our government masters' horrible management, have kept America in the world lead. Attacking folks who pay a lower rate for capital gains is a tired, overused hack at "the rich". Finally, re "people who make less than $75,000 pay enough", actually, when you look at our revenue base, people making less than $75,000 pay only 3% of taxes with the rich paying 97%. And more than half of our citizenry pay absolutely nothing....have absolutely no dog in the race...and could give a shit less how badly the states or the feds manage our taxes.
I do not disagree with you but have this nagging thought in my head: I have a cousin who is Very Rich. Yes, maybe "hard work" but mostly through Capital Gains He has never paid a Dime into Medicare OR Social Security and now, through tricks in the law, collect on Both and gets twice what I get on S.S. Yes, I am jealous. It just doesn't seem fair. Oh, he did provide employment to others, mostly at minimum wage and to his great benefit. How can this be fair?
and, don't get me wrong. I Love Rich People! They are the only ones who can afford what I do!
Do not know your cousin, or the circumstances that allowed him not to pay SS, yet draw it, but I'll stick to supporting those who are daring enough to risk all to invest in our future. When we invested in our first small business venture, throwing caution to the wind, we knew if we lost it all there would be no one to come along and save us. And if I invest in an alternative energy company, never knowing if it will ever become profitable, I am helping to see the next generation of innovation. Were any gains taxed as the same rate as earned income, no one would take the risk an we'd all be satisfied to draw a check in a buggy whip company.....while the rest of the world made those buggy whips obsolete.
I see both sides. My cousin avoided SS and Medicare because these are not taxed on Capital Gains. Spouse gets half of mates SS, so he married into that. The bottom line is still more money is needed. Some can be achieved through Less Government!!! but where to get the rest?
Not allowing the State Tax Deduction for Federal Taxes is a Good Start. Poor people don't have (or need) deductions anyway. Some of my clients live in $5,000,000 +++ houses, some of them are classed as "Agriculture" because they have 5 acres and 20' of untended grape vines! They pay LESS in property taxes than I do in a house bought for $8,375 (no typo!) in 1972.
Governing is not easy, glad it is not my job!
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