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Response to Cryptoad (Original post)

pnwmom

(108,979 posts)
2. Not the working people in states with high real estate and income taxes
Sat Dec 16, 2017, 12:45 AM
Dec 2017

who will never be able to take full deductions for them.

 

Hoyt

(54,770 posts)
3. How many working people can afford property or pay state income tax
Sat Dec 16, 2017, 01:34 AM
Dec 2017

at such a level that they will be harmed from a $10,000 deduction cap and a few percentage points off their tax rate? Not many, but there might be a few. I would agree that’s a hardship, but it won’t be many.

pnwmom

(108,979 posts)
5. In major cities on the west and east coast, many working couples with homes
Sat Dec 16, 2017, 01:47 AM
Dec 2017

and income taxes could be hit by that cap.

Yes, their incomes would make them rich in a rural state. But they couldn't make those incomes in a rural state.

For example, Portland has a 9% income tax on incomes above $9,000.

Their median house price is about $350K. To qualify for that median house a couple would need a combined income of considerably more than $100K (if you were a new buyer.)

So a person purchasing a median priced home in Portland would owe more than $9K in income taxes alone -- not including any real estate taxes.

And prices are much, much higher in Seattle, San Francisco, California, the NY metropolitan area, and Boston.

 

Hoyt

(54,770 posts)
6. So lets just say they pay $5000 in property taxes, so could only deduct $4000 of that
Sat Dec 16, 2017, 03:24 AM
Dec 2017

$9000. With an $100K income, they’ll pay a little less than $1000 in federal tax on that taxable $5000, but they’ll gain on the 3% reduction in rates. So they still come out ahead. The loss of exemptions will hurt though. And that’s assuming they don’t take standard deduction.

pnwmom

(108,979 posts)
7. They're not going to come out ahead.
Sat Dec 16, 2017, 03:56 AM
Dec 2017

It's the highest earners that got a significant reduction in tax rate, not people at the hundred thousand level.

And millions of people work in cities that are far more expensive than Portland -- because that's where their jobs are. All these people can't move out to the country where the houses are cheaper. There are also few jobs there, compared to urban areas.

https://www.consumerreports.org/money/new-tax-bills-winners-and-losers/

Interest on up to $750,000 in mortgage debt on a newly-purchased primary home could be deducted; that's a drop from the $1 million allowed now. That change, coupled with the changes to deduction of state and local taxes, could slow or stall real-estate markets in some high-tax, high-priced areas, predicts Lawrence Yun, chief economist at the National Association of Realtors.

"In places like Connecticut, New York and New Jersey, you’ll begin to see home buyers hesitate or scale down which properties they purchase," he says. "If prices fall, it will mean less in local property taxes, which could have an effect on services."

marlakay

(11,470 posts)
4. The way they do their bills
Sat Dec 16, 2017, 01:37 AM
Dec 2017

Is they get bad for people after they are out of office and let a democrat take the fall.

I am so tired of our presidents cleaning up their messes!

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