Me in November: Eliminate SALT Deductions
If you have low time preference though, you eliminate SALT completely without batting an eye. The net present value is highly positive. In the short-run, there could be pain at the ballot box for House and Senate Republicans in blue states. However, there is also immediate pain for Democrats at the state and local level because they'll have to reform or cut taxes if they want to ease the higher tax burden.
CA and NY today: Our view: Don't rush New York tax changes
The state Department of Taxation and Finance has come out with a preliminary report on potential options. The report itself, at 37 pages long, is a great illustration of just of how complicated such an undertaking will be. In the introduction, policymakers are cautioned that there needs to be "extensive analysis" conducted and that actions should come from "an intensive and measured process."Cuomo: Change way NY collects taxes to counter GOP tax law
That all makes sense, and we applaud the governor for putting forth the directive that this be examined.
At the same time, we're also terrified that the result could be changes that might alleviate a problem for some New Yorkers — those who have itemized deductions on their federal tax returns totaling more than the increased standard deduction — and create new state-oriented problems for a much larger portion of the taxpaying population.
Cuomo proposed as part of his 2018 state budget Tuesday to essentially do away with the state income tax on the wages earned by New Yorkers and replace it with an equivalent tax on employers. So instead of taxing wage earners, the state would tax employers on the wages they pay to their workers.Wealthy exodus to escape new tax rules worries California Democrats
Employers could then deduct the state tax on their federal income tax returns because the GOP tax law does not limit employer deductions.
"Instead of charging a tax rate on the income of employees, we charge it on wages paid by employers," he said during a conference call with reporters Wednesday.
The Republican-backed federal tax bill flipped the tables on a never-ending question for California politicians: Will high taxes lead the state’s wealthiest residents to flee the Golden State for the comparable tax havens of Florida, Nevada and Texas?
Republicans reliably raise that alarm when Democrats advocate for tax increases, like the 2012 and 2016 ballot initiatives that levied a new income tax on very high-earning residents.
But now, with the federal tax bill cutting off deductions that benefited well-off Californians, the state’s Democrats suddenly are singing the GOP song about a potential millionaire exodus.