Home › Forums › Financial Markets/Economics › $30K in Standard Deduction
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asitl.
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April 26, 2017 at 6:29 AM #22331April 26, 2017 at 7:17 AM #806349
Anonymous
GuestIt would depend on what other deductions are eliminated or reduced: mortgage interest, property taxes, state taxes?
If the plan was simply to raise standard deduction and eliminate mortgage deduction, I don’t think your specific numbers wouldn’t impact most SD homeowners enough to influence prices.
If other itemized deductions are eliminated as well, that would mean raising taxes on much of the upper middle-class and effectively eliminating federal taxes for most of the lower middle class…remember the disdain for the the 47% that “don’t pay any taxes”? It will never get through congress.
The “simplify taxes” agenda is just another part of the schtick that will accomplish nothing. The basic 1040 stuff like W2 income and typical the deductions I listed above aren’t what makes taxes complicated. Taxes become complicated when one has business income. And that will not change.
So enjoy the show, but don’t let concerns about the possible outcomes influence your real estate investment decisions. It’s all just theatre.
April 26, 2017 at 1:44 PM #806359andymajumder
ParticipantI think one area which would alarm at least some homeowners paying a lot of property taxes as well as Mello roos-
“At the same time, the plan would eliminate the federal income-tax deduction allowed for state and local taxes — a provision that would hit high earners in high-tax states, including New York and New Jersey. The only itemized deductions that would be preserved under the plan would be for home mortgage interest and charitable contributions.”
I would definitely add CA to the list of states impacted by this. Not sure what are the chances something like this would pass, but if it does, it could hurt property prices.
April 26, 2017 at 2:05 PM #806361gzz
ParticipantThis has 0 chance of passing. Cal House Republicans will never let their party pass something that limits the mortgage and state income tax deductions.
April 26, 2017 at 2:49 PM #806363FlyerInHi
GuestThe coastal states with high property prices will be negativey affected because our mortgage deductions will be relatively less valuable. People in podunk area with low property prices will suddbenly have standard deduction greater than itemized.
April 26, 2017 at 3:14 PM #806365GuestSo a few more details are out today but nothing that resembles a comprehensive plan. It does look like the mortgage deduction is safe.
He is trying to eliminate state and local taxes as a deduction, likely as a “fuck you” to the blue states.
The best part is the emphasis on fewer brackets: three instead of seven. Because all those brackets were just so overwhelming to Turbo Tax.
It’s all gimmicks that fail basic tests of arithmetic.
April 26, 2017 at 3:41 PM #806366ParticipantTrue, this seems like a big tax cut for folks in midwest or south with low property prices, who would have a pretty large standard deduction. But, could hit the middle & upper middle class folks in the coastal areas who rely on the itemized deduction of state & local taxes including rather high property taxes due to valuation of their homes. Don’t think it will pass in its current form, from Nytimes —“That proposal is likely to engender strong resistance from home builders and real estate agents, who fear it would diminish the importance of the mortgage interest deduction, as well as other sectors that could see the tax benefits associated with their businesses curbed or eliminated.”
April 26, 2017 at 7:03 PM #806367
CoronitaParticipantPeople who upper income wage earners don’t get to fully enjoy the itemized deduction from state taxes, property taxes, and vehicle registration taxes as people think they enjoy anyway…
It’s called AMT.
The tax upper income wage earners get hit with every year, well below what the taxes you normally would pay if you were able to fully deduct state/property/vehicle registration taxes. In fact, for most upper income wage earners, there’s no point in even itemizing things such as vehicle registration taxes because it makes absolutely no difference after AMT.
AMT tax rate is calculated such that state/property/vehicle registration taxes cannot be deducted.
April 26, 2017 at 7:56 PM #806368GuestWhat about the middle middle? Real estate values are created at the margins by people entering the market and creating demand.
April 26, 2017 at 8:31 PM #806370SK in CV
Participant[quote=flu]People who upper income wage earners don’t get to fully enjoy the itemized deduction from state taxes, property taxes, and vehicle registration taxes as people think they enjoy anyway…
It’s called AMT.
The tax upper income wage earners get hit with every year, well below what the taxes you normally would pay if you were able to fully deduct state/property/vehicle registration taxes. In fact, for most upper income wage earners, there’s no point in even itemizing things such as vehicle registration taxes because it makes absolutely no difference after AMT.
AMT tax rate is calculated such that state/property/vehicle registration taxes cannot be deducted.[/quote]
That’s a California thing. And a few other states with high top marginal rates. States with top marginal rates of 5% or less, AMT doesn’t hit very often. Irony is, the so-called plan does away with AMT, and the cause of the AMT for most high wage earners. Lose before, lose again. The big benefit is for those with humungous income that have preference items that drop their overall rate below the AMT rate.
April 26, 2017 at 8:34 PM #806369CoronitaParticipant[quote=FlyerInHi]What about the middle middle? Real estate values are created at the margins by people entering the market and creating demand.[/quote]
Well, that does suck for them, doesn’t it?
Not my problem, not my concern.
Now all that’s left to be done is this administration needs relax lending standards again, so we have irresponsible borrowing again, and irrational home buying again, to drive real estate prices even higher to even more irrational levels, again…So that folks can make the same exact mistakes they did a few years ago…..This time it will be different. I have a lot more homes that I could sell and milk it for all it’s worth. I don’t know why many of you still think home prices are going to crash. We haven’t even entered the irresponsible borrowing phase (yet). But it will come, probably.
Again, not my problem, not my concern.
April 26, 2017 at 8:45 PM #806372CoronitaParticipant[quote=SK in CV][quote=flu]People who upper income wage earners don’t get to fully enjoy the itemized deduction from state taxes, property taxes, and vehicle registration taxes as people think they enjoy anyway…
It’s called AMT.
The tax upper income wage earners get hit with every year, well below what the taxes you normally would pay if you were able to fully deduct state/property/vehicle registration taxes. In fact, for most upper income wage earners, there’s no point in even itemizing things such as vehicle registration taxes because it makes absolutely no difference after AMT.
AMT tax rate is calculated such that state/property/vehicle registration taxes cannot be deducted.[/quote]
That’s a California thing. And a few other states with high top marginal rates. States with top marginal rates of 5% or less, AMT doesn’t hit very often. Irony is, the so-called plan does away with AMT, and the cause of the AMT for most high wage earners. Lose before, lose again. The big benefit is for those with humungous income that have preference items that drop their overall rate below the AMT rate.[/quote]
Yup….lol….Buy a land and make it a “farm”….
But in all seriousness, come on people, you know this has no shot at passing right? You know Trump’s mo… Throw something out there that seems to appeal to the lowest common denominator of understanding, knowing realistically it has no chance of succeeding. Then playing CYA and saying “See, I tried to do something” and then assess blame on “Congress/Judges/The Establishment” for why it didn’t go through.
How many times have we seen this playbook now?
Trump won’t challenge the ACA, won’t challenge any of the court rulings. He’s just buying time and distractions on the next item to “fix”….I mean, if he actually did challenge and win, it would be considerably more work for his administration, and we all know he’s not really trying to do anything that requires more work…
You guys worry too much. I’m having a great time. It feels like everyone is drunk, and no one cares. lol.
April 26, 2017 at 9:00 PM #806373Participant[quote=flu]But in all seriousness, come on people, you know this has no shot at passing right? You know Trump’s mo… Throw something out there that seems to appeal to the lowest common denominator of understanding, knowing realistically it has no chance of succeeding. Then playing CYA and saying “See, I tried to do something” and then assess blame on “Congress/Judges/The Establishment” for why it didn’t go through.
How many times have we seen this playbook now?
Trump won’t challenge the ACA, won’t challenge any of the court rulings. He’s just buying time and distractions on the next item to “fix”….I mean, if he actually did challenge and win, it would be considerably more work for his administration, and we all know he’s not really trying to do anything that requires more work…
You guys worry too much. I’m having a great time. It feels like everyone is drunk, and no one cares. lol.[/quote]
I think your take on this is pretty good. He craves good press about himself. He can’t get it on anything that requires hard work. History shows, he picked the wrong party for hard work when it comes to government policy.
I’ll give you something to worry about. There’s only one thing he really has control over that he doesn’t have to worry about congress or the courts, that’s his position as CIC. He doesn’t want to get mired into more muck in the ME. That’s already failed. Even he isn’t stupid enough to get into a war with that crazy fuck in NK. But I’m pretty sure he’s gonna start a war. My guess is Venezuela. Take out Maduro, quick like, and still leave the oligarchs in place. I’m hope I’m wrong. But he’s gonna drop more bombs and more people are gonna die. Because he wants approval.
April 26, 2017 at 10:00 PM #806374ltsddd
ParticipantGood info on what this tax plan means:
April 26, 2017 at 10:04 PM #806375GuestYeah, he’ll probably try a Grenada and/or a Panama. Venezuela is a good guess. Funny thing is his knowledge of history is so lacking that he likely doesn’t even know about those little “wars.”
Sure he’s CIC but he’s not going to contradict his generals – they’ll push back and he doesn’t have the courage or the commitment to override them. America has nothing to gain from military conflict in the year 2017, and our military leadership knows that.
I was apprehensive about Trump initially as it seemed that he is capable of something really reckless. But now it seems he’s giving up on actually doing anything, especially since he’s lost so much influence already.
Sorry abut the threadjack – the point is that Trump won’t change taxes much at all. He’ll probably lower them a bit in general, but not in any way that would specifically affect SD real estate trends.
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