Such a card

House Republicans have been passing around this card to represent what they say is their idea of what the Federal tax return should look like:

House GOP tax plan, not in its final form

One thing that’s obvious: no deduction for state and local taxes. You might think that high-tax states might object to this, and in the case of New York, you’d be correct:

Gov. Cuomo said eliminating the deduction would “effectively increase state and local taxes by 20 percent to 44 percent, depending on a person’s tax bracket.”

“This would be a deathblow to New York, putting us at a horrible competitive disadvantage,” Cuomo said.

Like the level of taxation in New York wasn’t a competitive disadvantage all by itself.

Meanwhile, in that other reputed high-tax state:

Eliminating the state and local tax deduction would hit New York and California especially hard, according to a Tax Policy Center 2016 study. Combined, residents of the two states accounted for 32 percent of the total state and local tax deductions claimed nationwide.

Peter Grant, now a resident of Texas, likes this idea:

This would bring home to all Americans how efficiently their home states are governed. Right now, high-taxing, high-spending states can mask their activities to a certain extent, because their taxpayers are sheltered from the local tax burden by deducting it from their federal taxes. If that were no longer an option, every taxpayer would know precisely how much their state politicians are costing them — because they’d be paying it on top of, over and above, their federal taxes.

I’m not quite so sanguine about this. Few states are governed particularly efficiently; the one in which I live levies taxes at a lower rate than either New York or California, and it’s been in a deep dark budget hole for some time.

Grant continues:

The odds are pretty good that those living in tax-and-spend states such as New York, California, etc. would be very, very unhappy to experience the full magnitude of those states’ punitive taxes. They’d probably launch loud, vociferous campaigns to change their politicians’ habits — or change their politicians altogether.

Complaining about the Oklahoma legislature is de rigueur in these parts, but we don’t seem to be accomplishing a great deal of incumbent disposal, just like those Other States.

That said, I like the basics of this plan, but I question Rep. Kevin Brady (R-TX), who’s a prime mover behind it:

“We are proposing a change,” Brady said in an interview. “Rather than keep Washington taxes high and have just a few get relief from state and local taxes … No longer will Washington punish or reward you based on how much you earn or where you choose to live.”

They’ll find some way to reward their friends and punish their perceived enemies. They always do.





13 comments

  1. fillyjonk »

    6 April 2017 · 2:12 pm

    I remember seeing a joke version of one, years ago, in the Faculty Lounge of my prep school, not a place I’d expect to be a bastion of anti-tax sentiment:

    1. How much did you make last year?
    2. Send it in.

    But yeah, I’ve had years that felt kinda like that. (Then I started filing a Schedule A….)

  2. CGHill »

    6 April 2017 · 2:53 pm

    I remember that. (It’s been around a while.)

    I expected to file the short form this year. Deductions turned out to be more than I’d thought. So one more year with Schedule A.

  3. McG »

    6 April 2017 · 2:57 pm

    Few states are governed particularly efficiently

    The only thing worse than inefficient government is efficient government — which is why the U.S. Constitution abounds in checks and balances, and why its Framers never envisioned a full-time legislature nor politics as a career.

  4. nightfly »

    6 April 2017 · 3:17 pm

    “No man’s liberty or property is safe so long as Congress is in session.” – Mark Twain

  5. fillyjonk »

    6 April 2017 · 4:47 pm

    Yeah, it’s been around a while….my thirtieth high school reunion is this year. (Sigh.)

  6. CGHill »

    6 April 2017 · 6:08 pm

    I’m two years from my 50th, assuming I have two years.

  7. ETat »

    7 April 2017 · 7:11 am

    According to a website by a non-profit close to NYC Mayor’s office (professional confidentiality reason to withhold the name), 2/3 of NYC population live below poverty level. Meaning: they live off one or more government handouts.
    Do you think eliminating state tax deduction will hurt them financially? The stupid 1/3 of the city + the rest of the state will feed them anyway. And these are the people who will be hurt by the tax news.
    Considering that people here vote not with their dollar but with what their Party Line (D) tells them at the moment, I doubt this particular chess game will proceed on Grant scenario.

  8. Roger O Green »

    7 April 2017 · 10:32 am

    I’m interested that investment income would be taxed at half the rate of earned income; one can make the case for that being the other way around.

  9. Holly H »

    7 April 2017 · 12:44 pm

    Roger, I agree. ETat, you seem to think that it’s “stupid” to support poor folks. How then, are you to deal with the coming ‘de-monetized’ future? ie, in oh-so-few years (20, they say)….there will no longer be traditional jobs at all. We will live in a Star Trek world, where everyone’s job is to achieve emotional satisfaction through community projects. This will surely annoy fans of the Tea Party, who tend to judge people by their incomes.

  10. CGHill »

    7 April 2017 · 3:48 pm

    In 20 years, I will have decomposed beyond recognition.

    There are two different rules for capital gains: income from assets held long-term (“long-term” is a relatively risible 12 months) would be taxed at a lower rate than the stuff you turned over in a hurry. One of the better ideas Hillary Clinton tossed into the ring was to redefine “long-term” as two years. with a sliding scale from two to six years.

  11. ETat »

    7 April 2017 · 6:58 pm

    Holly- your song is centuries old (2, to be precise). Ever since Luddites started screaming – oy, we’ll all die because of the Machine!- the same melody tires us all.

    Let me, too, ask you a question, Holly: do you seriously think the Almighty Government is the one feeding “the poor”? Or ,if you do have 2 brain cells still half-alive, you gotta admit you want to hang 2/3 of population (parasites) on 1/3 of productive members? How idiotically vulgar-Marxist you can be, Holly – after all that you’ve witnessed in your – no doubt – long and eventful life?

  12. ETat »

    7 April 2017 · 7:01 pm

    Chaz, I don’t see why is that a better idea (well, it’s clinton, nuff said)
    The goal is to make people invest and thus push the economy. Not to save and stagnate it.

  13. CGHill »

    7 April 2017 · 10:49 pm

    I have this weird idea that people who aren’t turning assets over as fast as possible contribute to a form of economic stability; today’s accelerated turnover schedules generate fees for Wall Street, but don’t generate much wealth.

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