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no_hypocrisy

(46,130 posts)
Sun Apr 7, 2019, 09:04 AM Apr 2019

Federal tax sticker shock in "blue states".

I live in northern NJ which is one of those states where the $10,000 cap on SALT (deductions for state and municipal taxes) is problematic. The cap is the result of the Trump tax "cuts".

My local property taxes are more than $15,000 annually. The breakdown is 68% school taxes, 20% municipal services/taxes, 11% county taxes, and 1% library taxes.

Not only am I paying taxes TWICE for municipal/state taxes, but the blithe advice from DC is to cut municipal taxes for a remedy. Cut where? Lay off teachers? Cut benefits? Deny pensions? Larger class sizes? Close school buildings?

Meanwhile, the extra taxes I have to pay are applied to school systems in Arkansas, the Carolinas, North Dakota, Idaho, etc.

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Federal tax sticker shock in "blue states". (Original Post) no_hypocrisy Apr 2019 OP
Maryland, Washington State and NJ did sfwriter Apr 2019 #1
It's the same in Nebraska TheFarseer Apr 2019 #2
Another Californian who is angry that a chunk procon Apr 2019 #3
There should be NO transfer payments to states that aren't even trying to raise thei own revenue. BobTheSubgenius Apr 2019 #55
Should the same logic apply from states to cities ? MichMan Apr 2019 #63
I dunno. If the Red states are happy with less service fescuerescue Apr 2019 #56
So, Kick those states out! Let them sink or swim on their own. raccoon Apr 2019 #64
Interesting. JayhawkSD Apr 2019 #4
No, they are angry that certain states are a constant drain on federal coffers. roamer65 Apr 2019 #6
And they tell themselves that they are subsidizing the Blue States. NellieStarbuck Apr 2019 #25
Typical right wingers...all grab and no give. roamer65 Apr 2019 #26
Spot on NellieStarbuck!!!!!!!!!! NNYCDN51 Apr 2019 #35
+ 1,000 oasis Apr 2019 #37
Do you set them straight? Blue_true Apr 2019 #66
Depends on how crazy they are and whether or not they scare me. NellieStarbuck Apr 2019 #73
Reasonable criteria. No reason to have one's tombstone say "Killed by a nut". nt Blue_true Apr 2019 #74
There are some interesting charts & explanations here: CrispyQ Apr 2019 #8
Love the Eagle feeding the eaglets. Very interesting. nt UniteFightBack Apr 2019 #10
Yes. It was a very clever illustration. -nt CrispyQ Apr 2019 #18
I live in New Mexico PoindexterOglethorpe Apr 2019 #33
Really? Blue_true Apr 2019 #68
Not a show I watch. PoindexterOglethorpe Apr 2019 #71
I always viewed Richardson as a bit too slick. Blue_true Apr 2019 #72
So 13 or the 15 most dependent states are red states. Blue_true Apr 2019 #67
California is a "donor" state, we pay more procon Apr 2019 #11
Every state is different. Igel Apr 2019 #39
California also has a lot of government facilities doing high level research. Blue_true Apr 2019 #69
That's because blue states overall have always paid out more money to the Federal government pnwmom Apr 2019 #16
One thing we are overlooking TheFarseer Apr 2019 #20
They have much, much higher housing costs eating into their higher incomes. pnwmom Apr 2019 #22
Yes but that housing cost stays local fescuerescue Apr 2019 #40
Federal income taxes go to the Federal government, and the state and local taxes pnwmom Apr 2019 #45
of course . That's a given fescuerescue Apr 2019 #50
We didn't need another law before. The SALT deduction helped remedy the imbalance. pnwmom Apr 2019 #51
We didn't need it fescuerescue Apr 2019 #52
Not just the wealthy. Since people in states like NY pay half their incomes in combined taxes, pnwmom Apr 2019 #54
Sure it makes sense. plimsoll Apr 2019 #28
I agree completely. TheFarseer Apr 2019 #34
+1000. nt pnwmom Apr 2019 #46
Red states get money every year, disaster or not. Blue_true Apr 2019 #65
Educate me on NJ Property Tax... StillFeelingTheBern Apr 2019 #5
This message was self-deleted by its author lostnfound Apr 2019 #9
2 things StillFeelingTheBern Apr 2019 #12
This message was self-deleted by its author lostnfound Apr 2019 #30
A couple points from your post StillFeelingTheBern Apr 2019 #38
This message was self-deleted by its author lostnfound Apr 2019 #59
Does this apply in San Francisco and Seattle? ismnotwasm Apr 2019 #42
Many stocks pay no dividends in any year. I can see now why Elizabeth Warren's pnwmom Apr 2019 #47
Two points ramapo Apr 2019 #13
Think of it like this... StillFeelingTheBern Apr 2019 #15
I have no problem paying taxes ramapo Apr 2019 #21
I think we are talking to the willfully ignorant or super-inexperienced. lostnfound Apr 2019 #32
Blue states aren't objecting to funding progressive taxes. They're objecting to the fact that the pnwmom Apr 2019 #24
This tax goes after many median-income workers in BLUE states, while not touching AT ALL pnwmom Apr 2019 #48
If you paid $750K for a house in NJ, it cost you over a million DFW Apr 2019 #29
The blue states pay out more in federal taxes than they receive in federal taxes. pnwmom Apr 2019 #17
NJ property taxes NellieStarbuck Apr 2019 #27
People in the middle of the country know that in their area a 500K house is only owned by wealthy MichMan Apr 2019 #60
This message was self-deleted by its author lostnfound Apr 2019 #7
Here's the definite graph. roamer65 Apr 2019 #14
Weaponized tax code. Same with disaster funds. kairos12 Apr 2019 #19
Thank you. That is correct. Nt lostnfound Apr 2019 #31
yes, that was the plan. to use the federal gov to punish states that didn't vote tRump Demovictory9 Apr 2019 #36
Georgia is a red state, but plenty of Ilsa Apr 2019 #23
As long as the Legistlature can slice and dice Georgia, Blue_true Apr 2019 #70
Im in a red state and still hit the SALT cap fescuerescue Apr 2019 #41
The SALT limit hits only people who pay income and real estate taxes in BLUE STATES, while letting pnwmom Apr 2019 #49
I read where 25% of Texans don't have health insurance. watoos Apr 2019 #58
I used to live in NY customerserviceguy Apr 2019 #43
I paid $1126 in property taxes last year and am getting $681 of that back from the state Kaleva Apr 2019 #44
How large is your house? fescuerescue Apr 2019 #53
Don't know the square footage but it's on half an acre, maybe less. no_hypocrisy Apr 2019 #62
I thought Canadians were supposed to be so heavily taxed. BobTheSubgenius Apr 2019 #57
Then you must vote accordingly. allgood33 Apr 2019 #61

TheFarseer

(9,323 posts)
2. It's the same in Nebraska
Sun Apr 7, 2019, 09:35 AM
Apr 2019

Although certainly to a lesser extent. I used to do taxes and a lot of people here itemized that can’t anymore. States that are not blessed with oil(Texas), beaches(Florida) or minerals(Wyoming and SD) have to get money for schools etc from somewhere. It’s not a matter of spending too much money foolishly as idiot republicans would have you believe.

procon

(15,805 posts)
3. Another Californian who is angry that a chunk
Sun Apr 7, 2019, 09:44 AM
Apr 2019

of my taxes gets funneled into red states so they can boast about their low -- or NO! -- taxes. Not to mention that they also try to lure businesses to move into their state

Those red states provide a bare minimum of social programs, services, and assistance, and they do damn little to uplift and improve the lives of their own citizens. They don't do infrastructure, and squander what little revenue they have on providing perks to the wealthiest.

Yet these Republican controlled states sit back and expect my state and other thriving, responsible blue states, to pay for their state's operating costs.

That's just wrong.

BobTheSubgenius

(11,564 posts)
55. There should be NO transfer payments to states that aren't even trying to raise thei own revenue.
Sun Apr 7, 2019, 06:39 PM
Apr 2019

Fuck 'em.

MichMan

(11,939 posts)
63. Should the same logic apply from states to cities ?
Sun Apr 7, 2019, 08:57 PM
Apr 2019

I understand your frustration, but the same arguments could be made within a state

So no transfer payments within a state from the suburbs to inner cities like Detroit ? Would it be expected that Detroit residents raise their own taxes high enough to make them self sufficient ?

fescuerescue

(4,448 posts)
56. I dunno. If the Red states are happy with less service
Sun Apr 7, 2019, 06:51 PM
Apr 2019

Then so be it.

Let them live with pot holes, gang crime, unaffordable housing and crime.

raccoon

(31,111 posts)
64. So, Kick those states out! Let them sink or swim on their own.
Sun Apr 7, 2019, 09:32 PM
Apr 2019

I’m pretty sure my state (SC) is one of those...this wouldn’t benefit me.

 

JayhawkSD

(3,163 posts)
4. Interesting.
Sun Apr 7, 2019, 10:12 AM
Apr 2019

I do not hear any complaints about the federal money that is sent to your states for rebuilding highways. No complaints about FEMA funds sent to California to rebuild after fires. No complaint about FEMA money sent to New Jersey to rebuild after Sandy. Everyone is happy to receive money from the federal government, money which came from other states. They're just angry to see other states receive money from the federal government, some of which money came from their state.

roamer65

(36,745 posts)
6. No, they are angry that certain states are a constant drain on federal coffers.
Sun Apr 7, 2019, 10:40 AM
Apr 2019

The problem has been magnified 10 fold by the SALT deduction limitation.

States like CA and NY should not have to subsidize states like AL and MS.

NellieStarbuck

(266 posts)
25. And they tell themselves that they are subsidizing the Blue States.
Sun Apr 7, 2019, 12:01 PM
Apr 2019

Oh, yes. I am a Tennessee native who has lived in NY for the past 30 years. And I have heard so many times about how their hard-earned tax dollars are going to subsidize "the welfare state of New York". Yes, these states with no state income tax and nearly non-existent property taxes, who get much more from federal coffers than they could ever generate, they think they're propping us up. A similar plaint can be heard from the rural Upstate where they think NYC is being subsidized by their tax $. And they are allowed to continue in this benighted state, as it suits the right wing narrative.

PoindexterOglethorpe

(25,862 posts)
33. I live in New Mexico
Sun Apr 7, 2019, 01:31 PM
Apr 2019

which is #1 on the list as most dependent.

In our case it's mainly because we have 3 air force bases, plus White Sands Missile Range, plus Los Alamos Demolition range. And we have two national labs, Sandia and Los Alamos. A significant percentage of the workforce is employed at those facilities.

We have just over 2 million people here, so all that federal employment matters.

This is also a state with a significant Hispanic and Native American population.

It's also a blue state politically. Currently all three Representatives and both Senators are Republicans. As is our Governor.

Blue_true

(31,261 posts)
68. Really?
Sun Apr 7, 2019, 10:00 PM
Apr 2019

I thought your US Senators and Governor were Democrats. The Governor newly elected, so she needs time.

But very good points about all the government facilities in the state. But there are problem areas like Albuquerque, which shows up in a lot of COPs episodes.

PoindexterOglethorpe

(25,862 posts)
71. Not a show I watch.
Sun Apr 7, 2019, 11:55 PM
Apr 2019

Our previous Governor, Susanna Martinez, was a Republican. She only got elected in the first place because Bill Richardson, a Democrat, had become hugely unpopular. The Dem running in 2010 was his Lieutenant Governor, Diane Denish, and she suffered because of Richardson's unpopularity. In 2014, the Democrats of this state chose an utterly incompetent Democrat, Gary King, in a five way primary, who had name recognition because his father, Bruce King, had been Governor of the state in the 1970s. Gary King ran a terrible campaign, and so lost to Susanna Martinez, who won re-election far more easily than she should have. Sigh.

I doubt Albuquerque has any more crime than most cities of that size, but what do I know? I live in Santa Fe.

Blue_true

(31,261 posts)
72. I always viewed Richardson as a bit too slick.
Mon Apr 8, 2019, 05:49 PM
Apr 2019

We need to avoid nominating people like him. The current Governor is a former democratic Congresswoman who had a pretty sound reputation.

procon

(15,805 posts)
11. California is a "donor" state, we pay more
Sun Apr 7, 2019, 11:09 AM
Apr 2019

in Federal taxes than we get back, so we have a right to compain. California is one of several other so called "donor states", including Connecticut, Massachusetts, New Jersey, and New York that prop up other states.

Igel

(35,320 posts)
39. Every state is different.
Sun Apr 7, 2019, 02:45 PM
Apr 2019

Or nearly so.

Take Mississippi. It gets a lot of federal money. Because the government, mostly (D) from richer states, think it's important to help poor people, it's important to provide money to poorer, often minority-majority, schools. Whenever (R) want to reduce spending, it's the (D) who complain about subsidizing poorer states that complain that they're subsidizing poorer states. Because the wealthy should help the poor--but, you know, most people don't think they're really wealthy. (I know "middle class families" making $400k in 3k sq ft houses who spend weeks overseas each summer.)

I call it the Walmart effect. We want to have welfare programs for the working poor. Then when we have them for a decade, we forget that they were our idea and say that really, Walmart's relying on taxpayer subsidies of their workforce. Walmart was okay when their employees didn't have the subsidy; it wasn't really *their* idea.

Nebraska gets a lot of federal money. Because to keep food prices lower in cities we decided to subsidize farmers. And to keep food prices from falling too low, we decided to pay farmers not to grow so much of certain crops. This goes back to FDR's days. Not that there aren't specific programs to, say, keep dairy or sugar prices high.

Or take New Mexico. BLM lands, reservations, borders all get money. Even the VLBA. Delaware? Not so much of either. Because Delaware pretty much wiped out its indigenous population, has no real external border, and private land isn't what the US government decided to hand out to the citizenry but what was doled out prior to statehood.

Or consider rural versus urban infrastructure. If you want to rig tension lines in Delaware, Internet backbone, gasoline or NG distribution, put in a nice highway system linking Wilmington, Balto., DC, Philly, even North Jersey/NYC, great. It was 3 hours, 3 1/2 hours from DC to NYC and I'd lightly touch each of those metropolises. Now consider where I live. It's 3 1/2 hours from here to Austin, and along the way I go through little towns. It'll cost about the same for the main core route to service Houston/Austin as to service DC/Balto/Philly/Wilmington/the NJ-NY megalopolis.

The devil's in the details. No, the devils are in the details.

Blue_true

(31,261 posts)
69. California also has a lot of government facilities doing high level research.
Sun Apr 7, 2019, 10:03 PM
Apr 2019

It has Naval, Air Force, Army and Marine bases that are large. Plus a large amount of California is federal land, which counts in the donor calculation.

pnwmom

(108,980 posts)
16. That's because blue states overall have always paid out more money to the Federal government
Sun Apr 7, 2019, 11:38 AM
Apr 2019

than they receive in services -- despite the SALT deductions -- and the reverse has been true for red states. Now the situation is even worse.


By Robert Reich, who served under Ford, Carter, and Clinton, and was Secretary of Labor

https://www.chicagotribune.com/news/columnists/sns-201811121300--tms--amvoicesctnav-a20181112-20181112-column.html

It turns out residents of blue states send more tax money to Washington than they get back in federal help, while residents of red states send less money to Washington than they get back in federal help.

In 2015, for example, New Jersey got back only 74 cents in federal spending for every tax dollar its inhabitants sent to Washington, according to the Rockefeller Institute of Government. New York got back 81 cents on the dollar, Connecticut 82 cents and Massachusetts 83 cents.

But when you turn to the red states, it's the opposite. Mississippi received $2.13 for every tax dollar that its inhabitants sent to Washington. West Virginia received $2.07, Kentucky: $1.90 and South Carolina $1.71.

SNIP

Under the new tax law enacted by Trump and the Republicans, blue states will be giving even more "welfare" to red states.

That's because the law sets new limits for the amount of state and local taxes that people can deduct from their federal taxable incomes. And since people in blue states pay much more in state and local taxes than people in red states, blue-staters will be paying that much more in federal taxes.

TheFarseer

(9,323 posts)
20. One thing we are overlooking
Sun Apr 7, 2019, 11:49 AM
Apr 2019

People in CA and NY have ALOT more money than folks in Mississippi and WV, so it makes sense they would pay more taxes.

pnwmom

(108,980 posts)
22. They have much, much higher housing costs eating into their higher incomes.
Sun Apr 7, 2019, 11:56 AM
Apr 2019

And they have income taxes that many red states forgo.

fescuerescue

(4,448 posts)
40. Yes but that housing cost stays local
Sun Apr 7, 2019, 02:51 PM
Apr 2019

If a local resident pay $1 million for a tiny 2 bedroom house, that money doesn't go the Feds. Doesn't go to the county. Doesn't go to the state.

It goes to the local family that sold that house.

It's hardly the fault if some kansas resident that New Yorkers have decided to charge each other 10 times what kansas residents charge each other.

pnwmom

(108,980 posts)
45. Federal income taxes go to the Federal government, and the state and local taxes
Sun Apr 7, 2019, 05:21 PM
Apr 2019

stay within the state to help provide services that red states often don't provide. People in states like NY pay half those "big" salaries in Federal, state, and local taxes to do so.

Then those federal government taxes are returned to the states in Federal grants, but the blue states get back far less than they paid in and the red states get more. Because their population isn't as needy, in large part because of all those state and local taxes.

Why should the blue states pay an even higher fraction of the Federal funds because the red states stubbornly refuse to do important things for their citizens, even things like taking a Medicaid expansion that would have more than paid for itself, driving their other costs up?

fescuerescue

(4,448 posts)
50. of course . That's a given
Sun Apr 7, 2019, 05:53 PM
Apr 2019

Pretty sure everyone is on the same page there.

As for the Federal taxes, Federal tax rates are set on a national level. I suppose we could try for a law to tax blue states less, but I doubt that would get much support. Especially from red states.

In terms of Federal Spending. The Feds spend where the need is and political will is. I suppose Congress could choose to punish red states by holding back funds. Or the Feds could choose to not help the Red States. But given that the political will does exist, something would need to happen to reverse that.

If that happened, how would the Red states react? Do you think they would agree "oh gosh sorry about that, we'll quickly raise taxes"? or perhap do you think it might be a huge get out of the vote campaign to vote against such an idea and the people who tried it?

I dunno. In think this animosity of red and blue states and taxation plays right into the hands of red voters and the arguments of states rights.

me? In think we need to leave things alone.



pnwmom

(108,980 posts)
51. We didn't need another law before. The SALT deduction helped remedy the imbalance.
Sun Apr 7, 2019, 05:59 PM
Apr 2019

Now it's even worse.

I suppose we could try for a law to tax blue states less, but I doubt that would get much support. Especially from red states.

fescuerescue

(4,448 posts)
52. We didn't need it
Sun Apr 7, 2019, 06:02 PM
Apr 2019

But we got it.

It's essentially a minor tax increase on the moderately wealthy bundled inside a tax cut for the very wealthy.

It doesn't really affect the poor thank goodness. Since the Poor do not pay tens of thousands in state and local taxes.

Frankly, I think the SALT limit was just Trumps way of punishing the wealthy in blue states.

pnwmom

(108,980 posts)
54. Not just the wealthy. Since people in states like NY pay half their incomes in combined taxes,
Sun Apr 7, 2019, 06:28 PM
Apr 2019

that SALT limit has impacted many in the middle as well.

Meanwhile, the 1% in the red states aren't touched at all.

plimsoll

(1,670 posts)
28. Sure it makes sense.
Sun Apr 7, 2019, 12:15 PM
Apr 2019

If you think that: Income inequality is bad, As a society we should try to help those who need help, and a whole litany of other progressive and democratic platform ideals.

But many of the red-state recipients claim to be opposed to those things, and are either oblivious to or quite happy when it's to their benefit.

I think that's the problem, this tax bill was designed to reward low service red states and penalize higher service blue states.

From a political leverage perspective it's a thing of beauty. Blue state voters will say screw it I'm not getting as much from my taxes as I put in, while red state votes can continue to receive a taxing shelter. Blue state voters will have to choose to join the "screw the government" movement or continue to subsidize the states that are screwing them over electorally.

From the GOP perspective this is a no lose strategy.

TheFarseer

(9,323 posts)
34. I agree completely.
Sun Apr 7, 2019, 01:34 PM
Apr 2019

It’s always funny to meet guys working their ass of at a manual labor type job for $22k a year arguing for no inheritance tax, no cap gains tax and no public schools.

Blue_true

(31,261 posts)
65. Red states get money every year, disaster or not.
Sun Apr 7, 2019, 09:47 PM
Apr 2019

But overall, I agree with your point. Southern politicians should not complain about occasional storms in the North and fires in California, and as a result northern politicians should not (and they already DON'T complain) about helping Texas after devastating wildfires there, or the annual hurricanes in Texas, or in Florida, or in Mississippi/Alabama, or the devastating tornadoes in Alabama, Kansas, ect, or the devastating fires of a few years ago in Tennessee. We are one country, if we are to remain such, politicians should not pass abusive tax plans or complain that some part of the country that normally pays it's own bills need help.

 
5. Educate me on NJ Property Tax...
Sun Apr 7, 2019, 10:19 AM
Apr 2019

I would think $15,000 in property taxes means that your house is $750,000+. If that is true, I think it is right that you are giving your fair share. I don't like how people complain about needing to tax the rich, but then when they are taxed, and they are rich, they are up in arms.

Response to StillFeelingTheBern (Reply #5)

 
12. 2 things
Sun Apr 7, 2019, 11:11 AM
Apr 2019

$750,000 in stocks, you pay your income tax rate on dividends every single year. Also, the stock isn't occupying land and providing services to you (police, fire, schools, etc).

On house on the other hand, you have to provide the necessary evidence to the bank that you can afford it. Someone getting approved for a $500k+ mortgage is rich, no two ways about it. They are paying their fair share and can afford it.

Response to StillFeelingTheBern (Reply #12)

 
38. A couple points from your post
Sun Apr 7, 2019, 02:28 PM
Apr 2019

If I understood your post correctly, you paying $50,000 a year in taxes means that you are making $200K+ correct? I don't know which state you are in so I can't confirm but $50k in taxes means you make a sizable income. I would LOVE to be in a position where I am paying $50k in taxes, it means I'm making a boatload.

You stated I must like the GOP tax plan. I hate it. I'm just speaking from experience in my profession (CPA) and pointing out some inaccuracies so we can all be better educated to fight the Right.

Response to StillFeelingTheBern (Reply #38)

pnwmom

(108,980 posts)
47. Many stocks pay no dividends in any year. I can see now why Elizabeth Warren's
Sun Apr 7, 2019, 05:31 PM
Apr 2019

plan is making sense. Too many people sit on their wealth and watch it appreciate, while not paying their fair share of taxes.

A two earner couple each making $100K can get a $500K mortgage. That couple, living in a major city, is not rich. They're one salary-earner away from losing their home, like people in most places these days.

ramapo

(4,588 posts)
13. Two points
Sun Apr 7, 2019, 11:20 AM
Apr 2019

1. A $750k house in Northern New Jersey is nothing special. It is nice but this is the land of million dollar knockdowns.

A $15k or more property tax for that valuation is typical. A lot depends on the town.

There are some crazy things that contribute to the high costs here but that isn’t the point

2. We aren’t objecting to our local taxes. We have chosen to live here and pay them

But we’ve lost a deduction at our expense versus the rest of the country

My Trump tax cut has resulted in me paying a couple of thousand more in federal taxes. We were already supporting many of the the red states.

Believe me people are angry but the Republicans don’t care because NJ was lost to them anyway. BTW, the Republican congressional delegation was basically wiped out last November

 
15. Think of it like this...
Sun Apr 7, 2019, 11:34 AM
Apr 2019

Instead of getting that deduction and the money going back into your pockets (again, $750k house is rich), a good portion of your dollars are now going to fund medicare/medicaid, social security, and other social and welfare programs that need to continue to be funded. If a goal of progressivism is to help the lower class, then we shouldn't be against having to pay a little more.

Personally, I wish the Trump cuts went the other way and we saw a couple percentage points higher for the $100k/year on up crowd (myself included).

ETA- we cannot sit back and call for all of these great programs to be funded, adding new social programs, but then say "oh no I don't want to pay for that, take the money from someone else"

ramapo

(4,588 posts)
21. I have no problem paying taxes
Sun Apr 7, 2019, 11:53 AM
Apr 2019

Paying a lot of taxes is a happy problem. I have no issue with paying more. But this was a punitive increase that targeted a segment.

lostnfound

(16,184 posts)
32. I think we are talking to the willfully ignorant or super-inexperienced.
Sun Apr 7, 2019, 01:22 PM
Apr 2019

The joys of home ownership in a blue state.

People thinking that “owning” a $700K house means that you have $700K.

pnwmom

(108,980 posts)
24. Blue states aren't objecting to funding progressive taxes. They're objecting to the fact that the
Sun Apr 7, 2019, 11:59 AM
Apr 2019

Trump tax laws has just made the disparity between blue state and red state taxation even worse, sending even more Federal money out of blue states into red.

The red states could have their own progressive income taxes but instead would rather get more of their funding from the federal government. So the 1% in red states make out like bandits.

pnwmom

(108,980 posts)
48. This tax goes after many median-income workers in BLUE states, while not touching AT ALL
Sun Apr 7, 2019, 05:34 PM
Apr 2019

the 1%, much less the top 10%, in states like yours. The wealthy in your state make out like bandits.

And yet you claim to be a Bernie supporter. You don't sound like you understand his point of view at all.

DFW

(54,410 posts)
29. If you paid $750K for a house in NJ, it cost you over a million
Sun Apr 7, 2019, 12:40 PM
Apr 2019

That $750K you paid was paid for with money you were already taxed on (or will be, if you have a mortgage), and you only got to deduct the interest, not the principal. If you make $140K a year in NJ, you don't take that home. You take home two thirds of it if you're lucky. Some of the fayah shayah crowd defines "rich" with "I can't afford it," with the implied "nor should you." Being able to afford a $750K house in NJ doesn't mean you're rich. It just means you managed to budget for it with you current, past or prospective income. Making $140K a year, especially in a State like NJ, doesn't mean you have $140K in your pocket to spend. You're lucky if you have two thirds of it after Federal taxes. State, sales and property taxes come out of what's left. THEN you can start worrying about cost of living, not exactly cheap in northern NJ. My sister and brother-in-law live there--paycheck to paycheck, and, obviously, not a $750,000 house. They chose that area, and they choose to take the risk, but they budgeted for the situation as it was when they moved there twenty years ago. No one foresaw their being unable to deduct property taxes from their gross income.

My elder daughter makes what might be considered a respectable five figure salary, enough to live comfortably in Dallas. But she doesn't live in Dallas. She lives in New York City, and her salary forces her to watch every expenditure, considered subsistence level where she lives. I am tired of the finger-pointing at people who suddenly lose income they counted on to maintain a modest lifestyle. If you have busted your ass for thirty years and finally attain a level of tranquility that you strove for, only to have it cut because Trump and McConnell want more votes in Oklahoma, I say it is because of dirty politics, and not because you haven't paid your fayah shayah.

pnwmom

(108,980 posts)
17. The blue states pay out more in federal taxes than they receive in federal taxes.
Sun Apr 7, 2019, 11:40 AM
Apr 2019

With the red states, it's the opposite. And that was with the SALT deduction fully in effect. The new tax law has just made the disparity even worse, which was what Trump and his red state Congress wanted.


By Robert Reich, who served under Ford, Carter, and Clinton, and was Secretary of Labor:

https://www.chicagotribune.com/news/columnists/sns-201811121300--tms--amvoicesctnav-a20181112-20181112-column.html

It turns out residents of blue states send more tax money to Washington than they get back in federal help, while residents of red states send less money to Washington than they get back in federal help.

In 2015, for example, New Jersey got back only 74 cents in federal spending for every tax dollar its inhabitants sent to Washington, according to the Rockefeller Institute of Government. New York got back 81 cents on the dollar, Connecticut 82 cents and Massachusetts 83 cents.

But when you turn to the red states, it's the opposite. Mississippi received $2.13 for every tax dollar that its inhabitants sent to Washington. West Virginia received $2.07, Kentucky: $1.90 and South Carolina $1.71.

SNIP

Under the new tax law enacted by Trump and the Republicans, blue states will be giving even more "welfare" to red states.

That's because the law sets new limits for the amount of state and local taxes that people can deduct from their federal taxable incomes. And since people in blue states pay much more in state and local taxes than people in red states, blue-staters will be paying that much more in federal taxes.

NellieStarbuck

(266 posts)
27. NJ property taxes
Sun Apr 7, 2019, 12:08 PM
Apr 2019

I live on the NY side of the state line, where property taxes are in the same range as NJ. A $15,000 property tax bill would represent about a $500,000 home on a .3 acre lot. In other words, your average, modest suburban split level. We have good public schools here, though, and union jobs.

MichMan

(11,939 posts)
60. People in the middle of the country know that in their area a 500K house is only owned by wealthy
Sun Apr 7, 2019, 08:40 PM
Apr 2019

I know no one likes paying higher taxes, so I understand the replies

While it may be true that a 500K or a 750K home in some areas is "average" in many other parts of the country, it is only owned by the very rich. My average home in Michigan is worth approx. $150K at most. I don't know anyone with has a $500K home and when I hear of one, the first thing in my mind is that person is rich because those are the only people around here that own homes that expensive. Hell, our median household income is $54K.

My total house payment and taxes COMBINED are maybe 12K per year. I understand how people around here might have a hard time finding sympathy for someone complaining about not being able to deduct $15K in taxes alone on their 750K house in NJ because we see people like that round here as being rich.

The same argument in the OP could also be made within a state. The residents of wealthier Metro Detroit area suburbs complain about subsidizing places like the city of Detroit which has a high poverty rate. The difference is that while they complain about it, no one would make the case that Detroit needs to tax it's residents more to make it self sufficient.

Anecdotally, I found that in general many people favor tax increases and removal of "loopholes" as long as it is someone else having to pay them

Response to no_hypocrisy (Original post)

Ilsa

(61,695 posts)
23. Georgia is a red state, but plenty of
Sun Apr 7, 2019, 11:59 AM
Apr 2019

middle income families pay more than $10,000/year in SALT. I hope constituents burn the phone lines of their R congresscritters who proposed this crap.

Blue_true

(31,261 posts)
70. As long as the Legistlature can slice and dice Georgia,
Sun Apr 7, 2019, 10:16 PM
Apr 2019

the congress republicans will have no fear. People that are paying high SALT taxes live in or near metroplexes in the state or in college towns, those places on a micro level are either Blue or blue-purple, so the Legistlature is ok with screwing them, as long as they can neutralize the congressional vote of such places by cutting them up into several congressional district so that rural and far-outer suburb voters rule the vote.

fescuerescue

(4,448 posts)
41. Im in a red state and still hit the SALT cap
Sun Apr 7, 2019, 03:00 PM
Apr 2019

Doesn't take much really. Now I don't have insane property tax like NJ, but it definitely hurts to pay it and it definitely goes over $10k once you include state and city taxes.

It's just that ultra high tax localities see the impact much more so. The SALT limit is really a tax on the wealthy which I support.

It's hard to feel bad. If someone has the wealth to pay $15,000 or $20,000 in property tax alone, then it's unlikely that they will feel much paying about an extra $750 in Federal taxes (it's loss of a deduction, so (15000-10000=5000 deduction loss which equals $750). And given that it's FEDERAL taxes, at least those wealthy payers can feel good they are helping their entire nation and not just their wealthy neighborhood.

I'm not a fan of Trumps bill, but I do see it turning alot of liberal folks into anti-tax people who sound no different than Trump supporters.

Maybe that's what Trump wanted? To make Democrats anti-tax just as much as he is.

pnwmom

(108,980 posts)
49. The SALT limit hits only people who pay income and real estate taxes in BLUE STATES, while letting
Sun Apr 7, 2019, 05:42 PM
Apr 2019

the truly wealthy in the red states pay nothing more at all.

And it gives the red state voters more of a reason to keep voting for Trump, because they've seen him shift Federal tax money to their states, without any of them -- even the wealthiest -- having to pay more for it.

We know people in Texas. The husband is a professional, and they own two large houses. One of them is more than 6,000 square feet on a lake. It's a lot to take care of, but they have maids in both locations.

They don't have income taxes and they don't have inheritance taxes, and THEIR taxes aren't going up. Meanwhile, regular people in Texas don't even have the Medicaid expansion.

 

watoos

(7,142 posts)
58. I read where 25% of Texans don't have health insurance.
Sun Apr 7, 2019, 06:59 PM
Apr 2019

I also read a couple of years ago where Texas was grinding up paved roads and letting them go to gravel rather than repave them.

customerserviceguy

(25,183 posts)
43. I used to live in NY
Sun Apr 7, 2019, 04:05 PM
Apr 2019

and worked in northeastern NJ.

Taxes are high, and the average citizen doesn't get a lot for their money. I drove through NJ roads yesterday on the way to see friends in NY, and the potholes are as severe as ever.

Money gets pissed away in the Northeast, not so much in the Southeast. Maybe that's part of the problem.

And by what mechanism are your Federal taxes used to support school systems in the various states you mention? Is it that whole "donor state" versus "recipient state" calculation that is often cited? If you take out military base spending, you'll find that it's much more evenly distributed than you think.

fescuerescue

(4,448 posts)
53. How large is your house?
Sun Apr 7, 2019, 06:03 PM
Apr 2019

Im finding that many folks who are getting hit by the SALT limit live very very well.

I know that NJ has Ultra High Real Estate taxes, but $15k must be a damn nice place. (congrats!)

no_hypocrisy

(46,130 posts)
62. Don't know the square footage but it's on half an acre, maybe less.
Sun Apr 7, 2019, 08:52 PM
Apr 2019

The property is in an affluent community. When my parents moved there in 1955, it was a typical middle class community. We do have an enviable public school system. (My mother was the first female president of the BOE.)

I've looked at the taxes of neighbors and mine seem to be in line with theirs.

BobTheSubgenius

(11,564 posts)
57. I thought Canadians were supposed to be so heavily taxed.
Sun Apr 7, 2019, 06:54 PM
Apr 2019

My property taxes were a shade under $1800, although I do get a small grant for having an owner-occupied dwelling, and another small one for being over 65. This is on a house valued at just under $650K....but don't get excited. The median price in our muni is over $800K

Everything is expensive here - homes food,fuel, clothes, you name it. We call it The Island Tax.

 

allgood33

(1,584 posts)
61. Then you must vote accordingly.
Sun Apr 7, 2019, 08:48 PM
Apr 2019

I know lots of voters in NJ who voted for Trump. I'm waiting for a law suit.

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