I anticipate that aroma wafting ahead. Every time you want to count on Congress doing something, inevitably it seems to end in disappointment. Why is that?
The trick in cooking some foods is the seasoning. Now we find key in cooking up a tax reform plan is the use of SALT. (state and local taxes) It is also what causes the most argument among chefs. Some prefer salt free and others don’t want to change habits.
How this plays out across America is the largest debate we’ve seen so far. Yes, there are always class warfare warriors. They’ll use anything they can to make the rich vs poor paradigm the whole issue. And they’ll be those who only look at it from the corporate or wealthy side — not particularly concerned about lower or middle income. (as if government is not doing plenty already) The fair people’s minds look at the whole reality.
Taking away something, we see, creates a reality unto itself. The same applies on taxes. Take away and someone surely complains. It is someone’s bread ticket. And we are taught to think and act out of our own self-interest, whether that is on voting or on policy. We are supposed to stay in our lanes, which mostly is how we got into this predicament.
The fight and debate goes on.
You heard much of the debate about taking away SALT deductions; or keeping them in place to protect people in high-taxed states. There doesn’t seem to be any middle ground. Now I’m no moderate, but there is no position to please both sides. Or so we are told.
There are creative things they can do like capping that deduction. Maybe halve the amount one can claim? Or how about cut it off by income so the wealthy do not get the deduction? No, do away with it all at once is a tough pill for some to swallow. But why, at last report, will corporations still get to claim SALT deductions?
Except for one thing: if these states are exorbitantly high taxed, then they have been that way for some years and didn’t suddenly become high. That means those people have been reaping the rewards of high-tax deductions for years and years. While low tax states, or no tax states, have not had that big deduction — meaning they kept more of their income out of state coffers. This is the difference in the states, they say. Right, on one hand many people make more in those states while more is taken in taxes, then deduct it on their federal income taxes.
If you look at the whole picture it is a dramatic difference in policy. We have catered to the high taxed states. I think Ron Paul says what government subsidizes it gets more of.
The good news is that taking away the SALT deductions from high-taxed states puts incredible pressure on those states. What we need. Already they are moaning about it. It could be the biggest lever against higher taxes.Their raising taxes gig would be up.
So the point to remember is that the high-tax states have been benefiting on that paradigm for years. They get government to reimburse or subsidize their tax policy. Taking that away sends shutters up their liberal elitist spines. Yet they have benefited for years on that spending, by offloading their costs to the federal government.
Now the truth has hit the fan
But to start with it is a pill to swallow, doing away with that deduction. It does take something away from some people, who are already paying a lot of taxes. Obviously, I never liked what legislators and liberals used to call targeted taxes. Why don’t they call it ‘targeted-voter tax cuts?’ Those were canards meant to apply to a narrow populace. Little bang for the buck. And the I got mine’s cheered it. No one ever cared to address the mass imbalance on taxpayers. So if you are making a lot of money, why shouldn’t you get relief? Sure people at the bottom need some help as well. Loosening the chains on the economy also helps that.
I suppose it is still up for debate and people can have different positions, based on their factors. If we are honest conservatives, we should not want those deductions — or the high taxes for that matter. Both are real. Pull out the rug and the panic begins in state capitols. Good you say. But some people do get hurt. Leave then im place and the game never changes, does it? The elitists and establishment crooks continue on their road, unabated. No, change needs an appropriate force or resistance. Could this be it?
Now if the object was to strike some balance, there could be ways of doing that. So far, it appears there is no list of options.
Also missing in all the highlights of both tax plans is the issue of carried interest loophole, or the infamous hedge fund loophole. When it was such a prominent part of the debate and campaign, even on the left, its absence speaks volumes. People want to see that and loopholes closed. Now that is popular. Why make it all about SALT when they aren’t yanking hedge fund loopholes? Seems money talks and so do interests of donors. Republicans have barely mentioned it. They still need better P/R to cut the clutter.
Its a smorgasbord of interests.
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