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Old 01-04-2018, 08:11 AM   #41
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Yes, I meant why should anyone anywhere get a SALT deduction. What's in that for the Fed Gov?
Exactly, but I feel the same way towards a child care tax credit. I get tired of subsidizing other peoples kids.

If the kids actually eventually get a job, and pay plenty of SS, I may be OK with it. Unfortunately, I suspect that I will be subsidizing most of the kids for their entire life...
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Old 01-04-2018, 08:14 AM   #42
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Originally Posted by FIRE'd@51 View Post
It's only a deductible charitable contribution if it is made to an organization designated as a 501(c)(3) entity. I can't imagine the IRS approving this designation for a state or local government.
I'd guess that the IRS already approves deductions for contributions to public schools.

Let's suppose I made my wealth in computer software and want to donate computers to local (or distant) public schools. I think they would allow that.
Or, consider someone who donates money for playground equipment, or sports teams. I think people in my community have done that.

Certainly, contributions to state owned universities are deductible.

I think that under current law (or precedent) the IRS would have to allow this contributions to public schools.
The state law could specifically provide a credit contributions to public schools. That's the bulk of local taxes.


(That's my guess on the legality, not on the public policy wisdom.)
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Old 01-04-2018, 08:21 AM   #43
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I'd guess that the IRS already approves deductions for contributions to public schools.
Our local school district has a companion charitable foundation that allows for tax deductible contributions to benefit the schools. It's been a significant factor for funding "over and above" local needs. The foundation is separate from the schools, however, and there is no tax credit received if you contribute.
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Old 01-04-2018, 09:43 AM   #44
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I'm all for my state finding creative ways to reduce my federal taxes while maintaining the level of services I want.

I have to believe everyone feels the same?
Not only is is not compulsory that you believe that, but it is absolutely impossible that you believe that.

In fact I think the majority would be opposed to special interests enriching themselves at the expense of the national interest, but I certainly would never imagine that "everyone feels the same".
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Old 01-04-2018, 10:51 AM   #45
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Originally Posted by Independent View Post
I'd guess that the IRS already approves deductions for contributions to public schools.

Let's suppose I made my wealth in computer software and want to donate computers to local (or distant) public schools. I think they would allow that.
Or, consider someone who donates money for playground equipment, or sports teams. I think people in my community have done that.

Certainly, contributions to state owned universities are deductible.

I think that under current law (or precedent) the IRS would have to allow this contributions to public schools.
The state law could specifically provide a credit contributions to public schools. That's the bulk of local taxes.


(That's my guess on the legality, not on the public policy wisdom.)
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Our local school district has a companion charitable foundation that allows for tax deductible contributions to benefit the schools. It's been a significant factor for funding "over and above" local needs. The foundation is separate from the schools, however, and there is no tax credit received if you contribute.

Not sure what the public school district has, but I know each local school has a PTA or similar group that will buy the equipment for the school...
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Old 01-04-2018, 11:58 AM   #46
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Not only is is not compulsory that you believe that, but it is absolutely impossible that you believe that.
Good point! I never say never! And if I've said it once, I've said it a million times - don't exaggerate!

Clearly instead of "everyone" I should have said "many people". I'll go back and edit my post now.

Thanks for the heads up!

Quote:
In fact I think the majority would be opposed to special interests enriching themselves at the expense of the national interest, but I certainly would never imagine that "everyone feels the same".
We'll have to agree to disagree on the "enriching themselves at the expense of the national interest" part. Based on recent elections and the resulting "enrichments" my sense is exactly the opposite.
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Old 01-04-2018, 12:50 PM   #47
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Most of the states that have high taxes have both income taxes and sales taxes. These are the states that people are worried about.

All the states have to do is raise their sales tax and lower the income and property tax to a net of $0 revenue loss/gain. Easy peasy. Problem solved.
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Old 01-04-2018, 12:52 PM   #48
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Originally Posted by Senator View Post
Most of the states that have high taxes have both income taxes and sales taxes. These are the states that people are worried about.

All the states have to do is raise their sales tax and lower the income and property tax to a net of $0 revenue loss/gain. Easy peasy. Problem solved.

Sales tax is considered SALT also....
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Old 01-04-2018, 01:04 PM   #49
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Most of the states that have high taxes have both income taxes and sales taxes. These are the states that people are worried about.

All the states have to do is raise their sales tax and lower the income and property tax to a net of $0 revenue loss/gain. Easy peasy. Problem solved.
I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.
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Old 01-04-2018, 01:11 PM   #50
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Sales tax is considered SALT also....
In the old law you could deduct sales tax or income tax, never both. I don't think that changed under the $10K limit. Rebalancing income taxes to sales taxes might help a little with Federal income taxes - by shifting the state tax burden from the "rich" to others...
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Old 01-04-2018, 01:35 PM   #51
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I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.
Agreed. A multi-tax system is more balanced and fair than simply relying on one type of tax. The caveat is that often having multiple tax sources often means multiple sources of HIGH taxation.
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Old 01-04-2018, 01:48 PM   #52
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I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.
I am guessing that most people paying more than $10K in property taxes pay less in sales taxes.

I am also guessing the people on a fixed income do not pay in taxes what the state spends on them...

It would pick up the cash economy, which I would say is pretty large.
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Old 01-04-2018, 03:36 PM   #53
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When I was a salary slave, we paid a 1% local income tax on EARNED INCOME that was federally tax deductible, so I considered that Local. Now then, PA has a 6% sales tax in some counties and a few counties have a 7 or 8% sales tax, the extra 1 or 2% going to the stadiums that the voters said they shouldn't have to pay for.
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Old 01-04-2018, 03:45 PM   #54
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When I was a salary slave, we paid a 1% local income tax on EARNED INCOME that was federally tax deductible, so I considered that Local. Now then, PA has a 6% sales tax in some counties and a few counties have a 7 or 8% sales tax, the extra 1 or 2% going to the stadiums that the voters said they shouldn't have to pay for.
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Old 01-04-2018, 03:58 PM   #55
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I live in a state with an income tax, no sales tax. When my parents were alive, and well before the computer era, I asked them why that is the case. My Father said that a sales tax is expensive to administer and audit, for that reason he felt that the economic burden of a sales tax was more than an income tax. His other issue was that a sales tax is regressive, the poor spent a higher % of their income on taxed goods (even when food and medicines were exempted) than the upper and middle income residents.

Oregon does benefit from the spending of our sales tax neighbors but when we moved to WA I was surprised to learn that the base price same item (construction materials, specifically) in WA was higher than in OR. I wonder if my Father's theory of the increased cost of sales tax collection may have been the reason.

Back to the original subject.. Until we have the opportunity to grind the numbers it may be that the lower % on taxable income will offset the SALT limitation.
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Old 01-04-2018, 04:22 PM   #56
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I am guessing that most people paying more than $10K in property taxes pay less in sales taxes.

I am also guessing the people on a fixed income do not pay in taxes what the state spends on them...
I'm not sure what either of those have to do with anything.

The idea of reducing the progressive tax system and making up for it with a regressive tax system seems rather cruel to me. And unlikely to actually happen.
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Old 01-04-2018, 04:36 PM   #57
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I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.
Two things:

1. Sales tax gets income from those that are in the cash economy to avoid income taxes.

2. Said states could pay those on fixed income to offset the increased sales tax.
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Old 01-04-2018, 04:37 PM   #58
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Exactly, but I feel the same way towards a child care tax credit. I get tired of subsidizing other peoples kids.

If the kids actually eventually get a job, and pay plenty of SS, I may be OK with it. Unfortunately, I suspect that I will be subsidizing most of the kids for their entire life...
The difference is that creating kids is an asset to the country for the future and our government checks' payments.
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Old 01-04-2018, 05:02 PM   #59
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Those "wealthy" states have had all kinds of advantages over the other states, and need to pay more as it is their "fair share"....
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Old 01-04-2018, 05:23 PM   #60
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The difference is that creating kids is an asset to the country for the future and our government checks' payments.
That is exactly what I am afraid of, our government checks' payments are going to the families with the most children. I do not see them becoming the highly paid workers.

I see a lot as a landlord. Very few people in apartments with kids pay their own rent. Most are on some sort of subsidy. I do not take subsidized renters, so they have to move on. I regularly see families with 4+ children.

These renters are not paying anything in income taxes, state or federal. Many do work on the side doing some service work for cash. Of course, I take cash for rent.
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