Saturday, December 23, 2017

Beating the Bastard Trump's SALT Deduction Cap


On Friday, New York state Gov. Andrew M. Cuomo signed an executive order suspending provisions in state law that might have blocked some residents from prepaying next year’s property taxes, reports The New York Times.

By prepaying next year's property taxes, taxpayers will be able to fully deduct the payments on their taxes, something that will be severely limited next year because of President Trump's tax reform which will cap SALT deductions.

Cuomo said the move was aimed at protecting New York residents from the “divisive” Trump administration’s tax law that is an “economic dagger targeted for the heart” of New York. It could increase the amount of federal taxes paid by New Yorkers by $14 billion,  Cuomo said during a conference call with reporters.

“This is now red vs. blue. They are using New York, California and the other blue states to finance the tax cuts in red states,” said Cuomo.

Cuomo is correct here, much of the tax reform is about shifting the tax burden, with the rest of the cuts simply forcing a shift to government debt financing. The amount of government spending will continue to grow thus resulting in the government's take from the economy not shrinking.

This is a point lost on Trump's redneck supporters---and wait until the marginal lefty blue state residents move to redneck country to avoid the increased direct taxes, thus turning parts of red states into social justice warrior territory.

-RW

11 comments:

  1. I am glad that those who previously voted for high spending local government will from now on pay for the consequences.

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    1. To hell with the minority that didn't, eh? Or rather often the majority because the taxes aren't voted on and the people who run for office simply lie then increase taxes and create new ones despite saying they would not.

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  2. If Cuomo is mad about it, you have to admire it at some level. The cool thing about this particular provision in Trump’s tax reform law is that it holds the feet of guys like Cuomo to the fire for the high taxes they impose on their residents. He is very upset that his constituents might start to demand that their taxes be cut.

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    1. But isn't that just a government-to-government squabble over who gets the plunder?

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    2. There are a lot of angles to this. But put it this way, you don’t see the governors of lower tax states complaining about this. Cuomo is basically admitting that blue states have higher taxes and he really wants to keep it that way, but Trump is making it harder politically for him to fleece the sheep. This is beautiful political maneuvering on Trumps part despite the fact that he is a big government Republican. He’s never going to get support from CA, NY, IL, or NJ so this was an indirect way to stick it to those states while still allowing all Americans the same tax deductions.

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    3. The best part is how Cuomo's solution isn't to lower taxes in his state to make them less burdensome and more attractive vs. other states but to suspend a law by executive fiat to allow his serfs to pay their next year taxes EARLY! BTW, no one is asking why that law even exists. Probably to prevent someone from prepaying next year's taxes at this year's lower rate because taxes go up EVERY year in those states.

      In the past I have gone into detail as to why blue staters simply will not be moving to red states over this issue. There are many obvious reasons, such as willingness and ability to pay the exorbitant SALT taxes themselves. To quote the title of one of my favorite Bob Zimmerman songs written in upstate NY: "you ain't going' nowhere."

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  3. So much hate by the socialists....

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  4. Cuomo is a cynical douche with this move. Instead of acknowledging what a high tax unliveable poop hole he presides over, he blames Trump and Republicans for something he helped create.

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  5. Cuomo is up for re-election this upcoming year so no doubt he's only doing this in order to help him in that regard. He potentially may also face a primary challenge because he's "not liberal enough". Would be nice if he actually gets some real opposition to his tax and spend BS. Granted Larry Sharpe looks good but he's got no chance.

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  6. Surprisingly Chicago pols have been quite muted on it

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  7. It seems to me that Cuomo has this entirely backwards. The SALT deduction for all these years had put the burden of non-Federal taxes on those who lived in states that did not burden their citizens with high taxes. Where was the equity then? This new tax law has restored it.

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