STUMP » Articles » Taxing Tuesday: Those Evil Billionaires...Who Blue States Depend On » 5 March 2019, 12:18

Where Stu & MP spout off about everything.

Taxing Tuesday: Those Evil Billionaires...Who Blue States Depend On  

by

5 March 2019, 12:18

News from 1917: Opinion: Everyone Who Makes More Money Than I Do Isn’t Paying Their Fair Share

Equality in America is a huge problem. I’m not talking about equality of opportunity: I’m talking about the kind of equality that comes when everyone who makes more money than I do pays their fair share, being brought down to my level by the blind justice of the government.

Politicians want to distract you from who the real enemy is: everyone who makes more than I do. If we can just force them to give the government hundreds of millions of dollars, all our problems will be solved. What will they do with it? Who cares! As long as everyone who dares earn more money than me is cut down to size, I’ll be much happier.

Now, I know that I make a lot more money than 99% of the world and the majority of the nation. But I’m not the problem. I already pay too much. People who make more than I do—-they’re the problem. Take all your hate toward the government and taxes and redirect it toward people who make more money than you.

Not me, of course—-everyone who pulls in even a dollar more than I do annually is the real villain here.

Oh right, that’s a satire site.

THE SALT CAP BITES CALIFORNIA AND NEW YORK

And of course, not only California and New York.

On the Cusp of Catastrophe, California Has No Margin for Error

California’s 40 million residents depend on less than 1 percent of the state’s taxpayers to pay nearly half of the state income tax, which for California’s highest tier of earners tops out at the nation’s highest rate of 13.3 percent.

In other words, California cannot afford to lose even a few thousand of its wealthiest individual taxpayers. But a new federal tax law now caps deductions for state and local taxes at $10,000—a radical change that promises to cost many high-earning taxpayers tens of thousands of dollars.

If even a few thousand of the state’s 1 percent flee to nearby no-tax states such as Nevada or Texas, California could face a devastating shortfall in annual income.

And California has a bunch of holes to fill: consider this article from 2018, talking about sales taxes rising across California to try to fill the pension holes of Calpers and Calstrs.

Note these numbers from 2016 fiscal year:

Revenue sources for California:
Income tax: $90.7 billion
Sales tax: 53.4 billion
Licenses: 8.6
Property tax: 2.5 billion

Income taxes are the highest source. And it’s so dependent on those less-than-1%.

That isn’t sound public finance.

NEW YORK REALITY

So, Gov. Cuomo has an op-ed:

The most significant economic threat to New York is the cap on state and local tax deductions. While President Donald Trump promised a tax cut for the middle class, the capping of SALT deductions goes in the opposite direction — hurting about 530,000 taxpayers on Long Island, or more than a third of its taxpayers. It is an egregious act of partisanship that targets Democratic states to pay for tax cuts in Republican states, and it is particularly shameful that Republican representatives from Long Island failed to stand up for their constituents.

Oh really? Are they really paying more in taxes? Or just didn’t really get a cut?

The administration’s policies make the state’s 2 percent cap on local property taxes even more critical for New York, where the property tax burden is more than two-and-a-half times the typical state income tax burden.

In 2011, after years of trying to rein in out-of-control property taxes — Govs. George Pataki, Eliot Spitzer and David A. Paterson all tried — we passed the first local property tax cap. The 2 percent property tax cap changed long-term trends, and saved New Yorkers nearly $25 billion. On Long Island, it has saved taxpayers $8.7 billion, with the typical Nassau taxpayer saving $7,611 and the typical Suffolk taxpayer saving $6,284.

By every measure the tax cap has been a success, but that success is not guaranteed if it does not remain in place.

That’s why in this year’s budget I call on the State Legislature to make the 2 percent property tax cap permanent. I will not sign a budget that does not include a permanent tax cap.

Very interesting to me.

Let’s cut the income tax rate once again for middle-class New Yorkers. And let’s fight SALT until the federal government rolls back this devastating assault on our state and its taxpayers.

SALT cap zero! SALT cap zero!

Anyway, note you do realize that the folks in Nassau County, like in Westchester County, are “middle class” in the way I’m middle class. We are earned income-dependent… and our income is in the 6 digits. We’re pretty far from median household income… especially given how many of us pay over $10K in property taxes alone.

Indeed, the mother of AOC, the most famous House blabbermouth made this comment:

Blanca [Ocasio-Cortez] said it was a no-brainer [moving from NY to Florida], adding: ‘I was paying $10,000 a year in real estate taxes up north. I’m paying $600 a year in Florida. It’s stress-free down here.’

The mother-of-two said she picked Eustis because a relative already lived here, and right before Christmas 2016, Blanca paid $87,000 for an 860-square-foot home on a quiet street that dead-ends into a cemetery.

Florida is affordable… NY is not. That’s not Florida’s fault. (Some stupid aftermath on this.)

A lot of people leave NY once they’re no longer earning income here… because this is a really pricey place to be. It’s much more expensive to warm stuff up than to cool things down.

REFUNDS BEING SMALLER MAY BE A PREMATURE CONCLUSION

I still say comparing the refund sizes is definitely premature, but I didn’t realize the IRS was reporting on stats. I will return to updates as they come, but that was as of February 22.

Things to note in the stats:

  • 3.5% fewer tax returns have been filed in 2019 compared to 2018 (as of February 22)
  • 6.7% fewer tax pro-filed returns versus 0.9% more in self-prepared returns so far… it can be there are fewer returns thus far because the tax pros are catching up with all the changes (or people haven’t decided to yet)
  • 9.1% increase in use of the IRS.gov site (may be related to the tax preparer issue)
  • 4.8% fewer refunds — should be interesting to see if the professionals are taking longer, again.

There’s really little difference in the average refund given all this. Somebody wrote an op-ed at USA Today on the strength of this, but it wasn’t really the point, and I will go back and check it out later.

They’ve got stats going back to 2010, and I think I’ll grab those later.

PRAY FOR THE TAX PREPARERS

Speaking of tax pros — from the Wall Street Journal: How Accountants Break the Bad News About Tax Refunds: With Chocolate and Tissues

These are difficult times for tax preparers. Changes in Treasury Department rules have made it an especially tricky tax season, with lower refunds taking many Americans by surprise. That’s led preparers to stock up on chocolate, tissues and painkillers — both for unhappy clients and for themselves.

John Dundon, a preparer in the Denver area, says he bought tissues by the box last year for emotional clients. This year, he bought a carton of 24 boxes that clients are going through rapidly.

He recently advised a couple in their 70s that although their overall tax rate dropped from 21% to 18% for 2018, they owe the IRS $2,000 this year. They had been expecting a refund of the same amount. When Mr. Dundon delivered the bad news, the wife pulled her hair, waved her arms and yelled, “This is unacceptable!” — “like it was my fault,” he says.

Mr. Dundon’s wife brews beer as a hobby, and he’s grateful for a glass of it at the end of his workdays, which now stretch to 9 p.m.

In December 2017, Congress passed a tax overhaul that lowered income taxes for an estimated 65% of taxpayers and raised them for 6%, according to the Tax Policy Center, a Washington research group. The remaining 29% saw their taxes unchanged.

The reductions haven’t proved to be much comfort to those who were expecting a generous check from the IRS but now face lower refunds or even a surprise tax bill.
….
Treasury officials urged people to fine-tune their withholding using an IRS calculator, but an IRS spokesman says not many did.

Kathy Brown, a tax preparer in Warsaw, Ky., says that 90% of her clients have gotten a tax cut. Still, most have smaller refunds or owe taxes. A California wildfire firefighter burst into tears on the phone with her when he found out his expected refund of about $1,500 had turned into a $2,000 bill due to withholding changes.

Ms. Brown says chocolate is her “stress go-to.” Her husband recently dumped a bag of candy bars on her desk, telling her, “Eat these. You need them.”

Nicholas Epley, a behavioral science professor at the University of Chicago’s Booth School of Business, says people tend to think of their money in different categories — such as tax refunds and paychecks — even if a gain in one balances a loss in the other. Based on his own experiments showing that consumers treat rebates differently from bonuses, he believes that people notice an absent refund more than small amounts of additional money in their paychecks.

….
Surprise bills due to withholding changes are causing his clients more pain than the new $10,000 cap on state and local tax deductions, says Mr. Clark, who was once the drummer in punk-rock band the Circle Jerks.

“My job used to be one of joy,” he says of his tax work. “People used to be happy when they walked out of the office because they were getting a refund. Now they are walking away with their heads bowed down.”

Come April 15, he says, “I plan on erecting a pup tent with a whiskey drip.”

Here’s to y’all. I don’t think I could do that job at all because I would end up yelling at people. PAY ATTENTION TO YOUR MONEY!!!

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TAX STORIES

Oh, by all means, go after those tax returns. It keeps you from doing other crap.

TAX TWEETS





Sounds like a really popular platform.


Put a beat to it, maybe it will shoot to the top!

(Nobody actually gives a shit about what taxes Trump paid.)



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