Friday, January 26, 2018

citizens of States like New York, New Jersey, Connecticut and west coast states like California got screwed by Tax Bill

 Limiting a state tax write off in these states to $10,000 is going to cost millions of tax payers who own homes $10,000 to $30,000 more in taxes every year because of the tax bill. So, basically who the tax bill really screws bad is any one who owns a home where the value of the home is high by square foot. Usually, homes are taxed by the square foot value of their homes. $20,000 dollars per home per year is not unusual in California for example. So, if you can only write off $10,000 in state taxes you already would be paying $10,000 more in taxes per year to own a home in California. (This doesn't even include your mortgage payments.) which I believe you can no longer write off the interest either (unless it is a business expense).

People who are retired on a fixed income will be either forced to sell their homes or to rent out rooms thereby potentially (talk to your tax lawyers)  making all or a big part of your state home taxes completely or partially a total business tax write off.

Many people who own homes across the U.S. will be blindsided by this and likely lose their homes in the next year who don't understand this about the new Tax Code passed by Congress.  And who will these poor homeowners be forced to sell their homes to? The 1% who benefit the most from this new tax law!

 
Cuomo says East Coast states will sue feds, looking to thwart key piece of tax overhaul

begin quote from:
tax deductionCuomo says East Coast states will sue feds, looking to thwart key piece of tax overhaul

Cuomo says East Coast states will sue feds, looking to thwart key piece of tax overhaul

New York Democratic Gov. Andrew Cuomo announced Friday that a coalition of East Coast states will sue the federal government over the Trump-signed tax overhaul, in the latest bid to undermine the law that Republicans have cheered. 
The states -- New York, New Jersey and Connecticut -- appear to be taking aim at a provision that limits residents' state and local tax deduction (SALT) to $10,000. While the law contains sweeping tax rate cuts for businesses and individuals, taxpayers in high-tax states like those in the Northeast are expected to take a hit from the SALT change. 
Cuomo called it an "economic missile."
"The elimination of full state and local deductibility is a blatantly partisan and unlawful attack on New York that uses our hardworking families and tax dollars as a piggy bank to pay for tax cuts for corporations and other states,” Cuomo said in a statement. “This coalition will take the federal government to court to protect our residents from this assault."

A press release from Cuomo’s office claimed that the elimination of full SALT deductibility will cost New York $14.3 billion.

The move has picked up support from Connecticut Gov. Dannel Malloy and New Jersey Gov. Phil Murphy, who just replaced  Chris Christie.
"Capping the State and Local Tax deduction had nothing to do with sound policy," Murphy said. "It is a clear and politically motivated punishment of blue states — like New Jersey and our neighbors —who already pay far more to the federal government than we receive.”
Connecticut Governor Dannel Malloy speaks at the Democratic National Convention in Philadelphia, Pennsylvania, U.S. July 25, 2016.  REUTERS/Lucy Nicholson - RC15BBA82180
Connecticut Gov. Dannel Malloy is also joining the lawsuit.  (Reuters)
The lawsuit is just the latest attempt by Democratic governors and other high-profile lawmakers to thwart the tax bill. While a number of major companies have announced bonuses tied to the bill, and firms across America are preparing to revise their income tax withholding for workers, Democrats also have downplayed gains for average Americans as "crumbs."
Cuomo has separately floated the possibility of largely ending the personal income tax in his state, instead imposing an employer-side payroll tax that's deductible on federal taxes. This would ease the impact of the SALT cap for employees, though companies would likely adjust wages – which could be offset with a credit.
California officials have also raised the possibility of letting residents donate to the state budget, and in return get a dollar-for-dollar tax credit on the full amount of the contribution. Taxpayers would then be able to deduct that ‘charitable’ contribution from their federal taxes, making up for any loss from the SALT cap.
Cuomo's lawsuit announcement did not specify a particular legal avenue of attack, though such a suit could claim the law violates the 14th Amendment by targeting certain classes of people -- namely those living in high-tax states.
Cornell University Professor Michael Dorf, in an article for Verdict in December, argued that the law could be deemed unconstitutional if a court found that it targeted Democratic states deliberately -- but concluded that such a finding was unlikely.

While he claimed Trump acted in a “crassly partisan manner” by shifting tax burdens to blue states, he noted many laws affect states differently, such as solar panel subsidies affecting states with more or less sunshine.

“The question, therefore, is not whether the new cap on SALT deductibility disfavors taxpayers in blue states relative to the prior provision. It clearly does that. The question is whether that differential impact resulted from an invidious congressional motive,” he wrote, before concluding that the courts “probably won’t” rule that way.
Such attempts to dodge the new law are unlikely to be greeted favorably by Republicans or the Trump administration. Treasury Secretary Steven Mnuchin recently told reporters at the White House: “I hope that the states are more focused on cutting their budgets and giving tax cuts to their people in their states than they are on trying to evade the law.”
Fred Lucas contributed to this report.

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