All 14 California Republicans in House Hold the Line on Tax Reform
They did so even though one of President Donald Trump’s proposed reforms is an end to the state and local tax deduction (SALT), a $1.8 trillion boost that would hit high-tax, Democratic-dominated states like California, whose high earners benefit disproportionately from the deduction.
On Wednesday, House Minority Leader Nancy Pelosi (D-CA) had warned California’s Republican delegation that they would be hurting their own state if they voted for the budget. According to the Sacramento Bee, she called them potential “accomplices” in hurting California taxpayers, describing tax reform as “really an urgent time for the state of California.” She advised them they would have more leverage over the final legislation if they voted no.
But House Majority Leader Kevin McCarthy (R-CA) disagreed, telling the California Republican Party convention in a speech over the weekend: “I don’t think it’s fair that somebody else subsidize poor management of California or New York policies…No longer can Sacramento say, I’m gonna raise the rates, just cause I’ll have the federal government subsidize it. They will have to be held accountable for when they want to raise taxes higher.”
Some representatives, like vulnerable Mimi Walters (R-CA) of Orange County, seemed undecided. Capital Public Radio quoted her spokesperson as saying: “The Congresswoman’s top priority is putting more money back into the pockets of middle class Californians … She will carefully review any change to the SALT deduction to determine the impact on hard working taxpayers in need of tax relief.” In the end, however, Walters, too, held the line. http://www.breitbart.com/california/2017/10/27/14-california-republicans-house-hold-line-tax-reform/
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" an updated study released this week finds that millions in the middle class also could be affected by the repeal of the tax break.
The study, conducted by the Government Finance Officers Association using IRS data, found that nearly 40% of tax filers making between $50,000 and $75,000 in 2015 claimed the deduction. That is nearly 7.6 million households. Of those making between $75,000 and $100,000 (6.9 million households), 53% claimed it, as did 76% of those making between $100,000 and $200,000 (13.9 million households)."
The low income no growth mid west and rust belt just want their lives subsidized at the expense of those who live in big cities and near economic growth centers.
There are upsides and downsides to any tax bill, but the current proposal cuts out a lot of exemptions and loopholes, while greatly simplifying the overall process. You can always find something to complain about in these things, but the overall package seems like a positive change.
This is exactly the scenario we went through with TEFRA in 1986. The way it worked was it sharply reduced rates for top income earners, lowered them slightly for the upper middle class, and in theory simplified the tax code by getting rid of deductions and exemptions that apply mostly to the upper middle class.
The net result of that in 1986 and I see the same here is that it's a scam to extract money from small and medium sized business owners and technical professionals to benefit the top 1/10th of 1%. And when I did taxes back in 1986, we actually had to hire more people. The tax code not only wasn't simplified, but it became exponentially more complex. In our case, most of our clients were upper middle class who were extremely unhappy with their results.
This tax "cut" was actually a tax increase to cover for ERTA in 1981 which was a tax cut across the board which in theory was going to raise more money than the cuts due to extra incentive. Common sense says that was never going to work out very well - they had to try something like TEFRA to cover their ass. And here we go again.
Personally, I might retire if this goes through. I'm way beyond tired of being used to give money to people who already have way too much.
The theory behind tax "cuts" like this and what I think the GOP leadership fostering this actually believes is that the top 1/10th of 1% generate all our wealth and the rest of us should be on our knees grateful to them for what they do for us - so the least we can do is lower their taxes. That's total crap of course. I don't owe them a damn thing. And this time out they can find someone else to scam money off of I'm done.
Well first, the 4th tax rate is optional right now I'm not holding my breath. Second, the increased deductions for child, personal and standard deductions is great for low income earners, but not very helpful if you're in the upper middle class. The fact is that if this tax "cut" goes through, taxes on those earning 100K-300K will increase significantly while taxes for those earning a million or more will decrease anywhere from 7-10 percent.
In other words, a tax "cut" that will throw the upper middle class to the wolves to benefit the super rich. Again. There is a small drop in rates for the upper middle class, but getting rid of their deductions and exemptions will clearly result in significant tax increases for them. As I've said I've been through this scam before and I see a clear pattern here.
Strangely, I do agree that cutting the corporate tax rate from 35% to 20% will benefit. That in particular has nothing to do with the class warfare the GOP seems determined to carry out against small business owners and technical professionals like me.
And gee - isn't that generous to raise the minimum wage from 7.25 to 9.10 if the top 1/10th of 1% get all the goodies they want and a bigger share of the whole economic pie than they already have? I don't even know where to start with that.
And - on top of all that - there's this pesky thing called the deficit. It will cost us all dearly if we don't get our spending under control. I'm all in favor of tax cuts distributed fairly with big spending cuts attached to it to get our deficit spending under control. So on top of everything else, this tax cut is monstrously irresponsible.
As luck would have it, I'm in California and the SALT adjustments will definitely have a large negative impact on me. The principle for years was that taxes themselves aren't taxed, but apparently if the tax is mostly paid by the upper middle class, that doesn't count.
If you're a small business owner, chances are very little of your income is exposed to 39.6%. Last year I netted about 22% of my total income as FIT. This year, I'll probably be "lucky" enough to actually hit that 25% cap. Lucky me....
The mentioned deductions don't have that much effect on those making 100K-300K a year. It's always a source of some irritation that deductions stop just short of what I'd need to get under to actually take the deduction.
And personally I'm way over the fairy tales that cutting taxes raises revenue or increased spending makes a multiplier that generates more tax than what got spent. We need the adults in the room that say that cutting spending and raising taxes gradually but definitely is the only way there is to decrease the deficit and run our government responsibly. There's no doubt in my mind that if this tax "cut" goes into effect, our annual deficits are going to expand big time and we're at a point where we may not be able to sustain it.
I've heard the "experts" say cutting taxes raises revenues for years. Besides that the concept defies common sense, I've yet to see it happen.