Federal Income Tax Reform Proposal - Effect on Californians (Berkeley: university, subsidized)

[brb going fishing]

Congress has yet to flesh out where the new income brackets will fall. Taxes could surely increase for upper middle class Californians depending on where the income brackets are set. The elimination of the state tax deduction will be a blow regardless.

[expatCA]

Originally Posted by brb going fishing

Congress has yet to flesh out where the new income brackets will fall. Taxes could surely increase for upper middle class Californians depending on where the income brackets are set. The elimination of the state tax deduction will be a blow regardless.

Why shouldn't the State income tax deduction be eliminated? Why should people in one State pay more to the Feds than in another? Each State decides on an income tax not the Feds, so if your State does, pay it. If it doesn't be happy.

[payutenyodagimas]

[payutenyodagimas]

we are not 1 percenters but the effect is huge on my family

[expatCA]

Meaningless as the actual brackets have not been defined.

[payutenyodagimas]

the highest fifth is 150-300k income

most posters here insinuate that they are in that bracket

[CA4Now]

Edward Kleinbard, a USC professor and former chief of staff to Congress' Joint Committee on Taxation, said setting different rates for corporations and varying kinds of pass-through businesses raises questions about the policy objective the government wants to achieve.

“There is no logic here,” Kleinbard said. “I don’t know why a corner Thai restaurant is inherently better than a … law firm.

“This will be a gold mine for tax lawyers for decades to come,” he said.

Tax breaks aimed at small businesses may favor a sliver of wealthy owners - LA Times

[expatCA]

Originally Posted by CA4Now

Edward Kleinbard, a USC professor and former chief of staff to Congress' Joint Committee on Taxation, said setting different rates for corporations and varying kinds of pass-through businesses raises questions about the policy objective the government wants to achieve.

“There is no logic here,” Kleinbard said. “I don’t know why a corner Thai restaurant is inherently better than a … law firm.

“This will be a gold mine for tax lawyers for decades to come,” he said.

Tax breaks aimed at small businesses may favor a sliver of wealthy owners - LA Times

Who cares? Breaks to businesses allow them to spend the money on additional employees, equipment (Which helps others) , advertising which helps others and the list is quite long. If the money went just to the owners then they would pay a larger percentage in taxes. Better to spend on others than on personal taxes. Then as the business grows the owners can now take a larger salary/profit as it would exist. Taking the largest amount of tax in the Industrial world from business does not help the businesses or employees.

[KC6ZLV]

Originally Posted by Logic87

I am in favor of limiting deductions and lowering rates for all and limiting deductions. I don't believe high tax states should be subsidized by the federal government by allowing individuals to deduct state and property taxes, and this should force states to improve their budgets . Limiting deductions for interest and property taxes should help in lowering housing prices since home prices are artificially inflated by tax breaks which should help Californians.

What I am against is the following:

- Removing personal deductions (this hurts the lower and middle class)
- Removing estate tax
- Removing AMT but not replacing it with a "Buffet Rule" which would help in the discrepancy in capital vs ordinary income tax rates
- Lowering corporate income taxes is fine but not deductions and credits should be limited as well

The high tax states aren't being subsidized by the Federal government. As it is now, Californian's have been paying more than their share of subsidies to the Federal government. If this tax plan goes through it will be the high tax states subsidizing the tax cuts for the rest of the nation. Many of these places already receive more Federal subsidies than they pay in taxes.

[expatCA]

Originally Posted by KC6ZLV

The high tax states aren't being subsidized by the Federal government. As it is now, Californian's have been paying more than their share of subsidies to the Federal government. If this tax plan goes through it will be the high tax states subsidizing the tax cuts for the rest of the nation. Many of these places already receive more Federal subsidies than they pay in taxes.

CA has not been paying a higher share. American Citizens living in CA have paid at the same rates as everyone else. The State has nothing to do with it.

Right now the Feds are subsidizing CA by giving CA residents a tax break for the State Tax they pay. Why do that, as it does not help the Fed's income?