Tax Plan Could Hit 1,780 Homeowners Hardest

The problem with this bill is that the lower corporate rates are forever and the personal rates sunset in a few years. So essentially Joe Hayseed will think the GOP has given him a wonderful gift until the $#!& hits the fan in a couple of years. Then the GOP will cry "emergency!" and instead of putting taxes back where they should have been, will try to cut Social Security and Medicare. Its stealing a bit from blue states in terms of property taxes but mostly stealing from future generations all over America. How cruel of the GOP and how stupid of those Americans who support this.

Actually a good portion of them are probably rental properties so the tax will be deductible.

While those who itemize are limited to $10K in combined deduction for state and local taxes, the standard deduction is doubled to $24K. Before jumping to the conclusion that all these folks are going to be hurt, we need to ask if their TOTAL itemized deductions (taxes, charitable contributions, etc.) exceeded $24K. If yes, then yes, they may pay more, although the lower rates may still mean they come out ahead. Only 30% of American taxpayers, and 41% of Connecticut taxpayers, itemize their deductions, so most will come out ahead. As for low income folks, the EITC is untouched, the child credit raised, in addition to the standard deduction, so they will likely pay substantially less. CTMirror ran an article by a CPA saying that pretty much everyone with an income below seven figures will pay the same or less. (The lower limit on mortgage loan interest ($750K) will hit high income/high debt folks, too) So, yes, Rosa and Bloomie may pay more, but most New Haven residents, even those with high property taxes, will come out okay.

1644,

Until 7 years from now when tax cuts expire (for individuals but not corporations) and 2 trillion more debt has accrued serving up a basket case economy that other people have to fix..not unlike 1992 for Clinton and 2008 for Obama.

"Those properties have market values of $369,330 or more". In other words, these belong to our wealthier residents. So you can't have it both ways, Rosa. Keep telling us we need to spare the Middle Class and tax the 1%--but because the "other Party" has done so, it's now a "massive assault of the social safety net". If we had a REAL "representative" instead of a partisan hack, DeLauro would call for a simple, graduated tax with NO deductions. Every deduction that IS in the tax code is there because of special-interest lobbyists. The mortgage interest deduction and property tax deduction were put there because of lobbying by lenders, builders and real estate brokers who benefit from home sales; these deductions make home buying more enticing. But how is THAT "fair" to people who rent? Rep. Esty: "There is going to be huge pressure on Connecticut to cut taxes". Where has SHE been? "A middle-income family in Connecticut would see an $835 boost annually as a result of the Republican tax bill, according to a new study, with the plan contributing to nearly 4,000 new jobs in the state": http://www.thehour.com/business/article/GOP-tax-boon-for-Connecticut-families-4K-jobs-12441026.php

there's a simple solution for Rosa, Dicky B, and those that 'run' New Haven - get gov't spending here under control. At some point, they need to realize that their taxing is the root of the problem.

The point of this tax bill is to benefit the rich, funded by deficits and tax increases on blue state professionals.

The value of highly taxed properties in New Haven will decline because they are worth less now that the property tax is not fully deductible. That will shift the city tax burden onto everyone else in town. New Haven at large will suffer, which was Paul Ryan's goal: to punish us living in a blue state.

Further, the tax cuts are "financed" by a trillion dollar increase in the deficit. Paul Ryan has announced his intention to offset this with brutal cuts to Medicare and Medicaid, further harming us. Finally, the small middle class tax decreases are scheduled to decline and then expire, while the corporate tax cut and loophole expansions are permanent.

The only good news for New Haven is that the insane expansion of tax loopholes for real estate construction may extend the rental housing boom in New Haven even as home owners are soaked to pay for those real estate profits.

robn: Well, this article is about the impact on individuals, not the long-term deficits effects. Time will tell, and I expect Congress won't be able to resist tinkering with this for 7 years anyway. The fact is that these deductions favor the wealthy, so their loss should be applauded by Democrats. Except, of course, the haute bourgeoisie constitutes much of the Democrat donor class. I did like the surpluses we were running in the Clinton years, although that wasn't Clinton's plan. The Clinton-Gore platform was to raise taxes to finance new spending, Republican deficit hawks joined with Democrats to pass tax increases, but opposed massive industrial policy spending so Clinton wound up with surpluses accidentally. Obama increased taxes, but also spending, particularly health care and education, so we continued to run massive deficits. For now, DeLauro and Blumenthal are not talking about the deficit, but individual impacts, unduly scaring and misleading folks. There will be winners and losers, but most New Haveners will come out ahead.

Lookout: Yes, Harp and the Alders could eliminate unnecessary spending, such as a Mayor;s liaison to a board of which she is a member, a driver for the mayor, and other positions and subsidies to favored groups. They could also do what other towns do, which is work to increase their Grand List. Unlike Hartford, Waterbury, and Bridgeport, New Haven actually has developers wanting to build here. Instead of welcoming them, however, the Mayor and Alders regularly harass them, extorting concessions for politically favored groups, or even, as in the case of Strong School, choosing to keep an asset bleeding the public fisc when it could be adding to it.

as in the case of Strong School

The strong school was, as is often the case, neighbors throwing a fit. And this city already has an impressive amount of development going on.

As for the subject of the article, limiting SALT deductions in a vacuum is not inherently bad. These caps aren't being used to fund a progressive program or close the deficit though. They're being used to chop corporate and high income rates followed by taking a knife to social programs to deal with the resulting deficit increases

Besides the inevitable budgetary fallout leading to slashing SS and Medicare, my problem with the SALT deduction limitation is twofold...one problem is that it breaks a very long standing promise made to homebuyers affecting their decision about how to purchase a house....the other problem is that its a blatant potshot at states that mostly voted against Trump, redistributing their tax dollars to red states. Its bad enough already that CT is a long standing donor state ....while most red state beneficiaries use that money to build highways while underfunding their schools, making America dumber. For god sake's, Alabama came within a percent of voting a child molester into the Senate!

1644, I suspect that almost everyone who pays property taxes of $10,000 or more currently itemizes. You also forgot to mention the elimination of the personal exemption, which largely offsets the increased standard deduction for families. With regard to lower-income folks, the bill will increase their health insurance premiums.

The bill will slightly reduce my taxes on net (at least for the next seven years). It is an awful piece of legislation nonetheless.

The Dems and the leftist media present such a biased view of the tax bill. In every income category, the average tax payment goes down and most people will pay less. The increase in the standard deduction to $24,000 is a huge reduction and simplification for most families And, our corporate tax rate was way too high. Europe is at 19% on average, Germany at 15%. The US was at 35%. Reducing to 21% was a good move.
The tax bill is good for our Country.

Kevin: Yes, if one has $10K in property taxes, one is almost certain to have over $12K in deductions. However, I suspect quite a few folks fall between that $12 and $24K range. I expect my brother, whose Westville house is taxed at about $10K, has about $15K-$17K on his schedule "A". Further, while the exemptions are going away, the child tax credit is going up. I expect most folks will be like you, and come out slightly ahead, as the $835 average figure implies. Some, such as those with high incomes, high taxes, and adult dependents, will pay considerably more.
Michael: Add, Canada, 15%, UK 20%, Ireland 12.5%. Our high corporate tax rate is driving inversion mergers, where a slightly smaller overseas company merges with a US one and the headquarters is moved overseas, especially to Ireland. Malloy recently mentioned a reduction in the corporate rate as something
everyone" agrees is needed. (He wasn't so sanguine about limits on SALT deductions.)

A lot of the "rich" are left state professionals. And yes, it is a blatant shift of tax burden from wealthier Democratic states to poorer Republican ones. I have been amused reading folks like Ned Lamont bemoan the redistribution of wealth as unfair, not just in this tax bill, but the basic fact that Connecticut is a donor state. As for our higher tax rates, when we tax ourselves more, the benefit of those taxes stays largely in Connecticut. Our poor get better medical care, higher welfare payments, a state EITC on top of the federal one, all are kids have access to better schools, a "public Ivy", etc. When we are allowed to deduct our higher taxes, it means states with lower taxes are left with more of the federal burden than they would otherwise have, if only in debt, just as "homeowner" deductions shift burdens from "homeowners" to renters. It's telling that CT does not allow any deductions in its own income tax scheme, not for local taxes, not for charitable contributions. I often owe more in state income tax than in federal as a result.

Good run down

https://www.theatlantic.com/politics/archive/2017/12/gop-tax-bill/549017/?google_editors_picks=true

From 'The Atlantic' article cited above': "…If the idea behind tax reform is to eliminate favoritism from the tax code, then the tax law of 2017 is anti-reform…Economically, the system invites gaming…"
So basically—it's more of the same.
"…America's already bitterly polarized two-party system may soon be evolving further and faster into two single-party systems, each bent upon pillaging the other."
We're already there! (which likely explains why the largest voting bloc today consists of "unaffiliated" voters).
The REAL way to fix this? >>Term Limits<< When voting on a bill, members of Congress give FIRST priority to how their vote will affect his/her re-election chances and their continued support by "The Party". With Term Limits, there's a better chance that members of Congress actually will focus on…Serving Their Country!: seemingly a rather unique concept, but I still think it's worth giving it a try.

If it was 20,000 instead of 10,000 then Rosa would say this benefits the wealthy. Rosa needs to retire. As I been saying if all these rich democrats that are complaining about this plain benefiting the rich. Guess what you don't have to pay the taxes under the new plan. Pay the tax under the old rules and don't use all the loopholes either. Pay the full tax, once you do that then you can complain. The fact that the corporate rate is down is great, but of course Trump is doing something with the companies because they are giving bonus, increasing wages and creating more jobs. Most likely Russia is involved somehow right Rosa, Chris, and Richard. Why don't you all start doing something up there instead of making up lies and wasting Americas money. She lost already, Get OVER IT and support the country.

RD is worth 27 million dollars and she's not helping you.

Wendy, you and others here might enjoy the Beverley Hillbillies episode entitled "Jed, Inc." It's available on Youtube. Mr. Drysdale creates ClampCo as a tax avoidance structure. Drysdale tells Jed that it is the American way to give as little money as possible to the government, a concept Jed has trouble understanding, since as he says, "The government needs money and I have lots of it." After Drysdale tries to explain trickle down economic to the Clampetts, they implement their version by throwing boxes of cash off of an office tower. A my wife said, it was a good thing Drysdale was honest, as he could have robbed them of everything. He'd never make it in the industry today!

This says it all.

Tax Plan Will Drain NY and CT, Boost FL

With the proposed Republican tax reform bill comes a $10,000 limit on state and local tax deductions for individuals. Some of the impact has been offset by lower marginal tax rates, but the net effect makes low-tax states more attractive: The difference between living in New Jersey and living in Florida could amount to tens of thousands of dollars for high-income households. But capping the deductibility of state and local taxes (SALT, as it is known) has the potential to result in profound economic and social changes. For starters, the South could become home to some of the nation's largest cities.Many businesses will flee high-tax states in favor of low-tax states. This has been happening for years, but SALT will accelerate the trend.It goes further. People are starting to figure out that an inability to fully deduct property taxes results in lower real estate valuations. If there is more tax on your house, your house is worth less. This is just math. Real estate values will drop in high-tax jurisdictions, and the drop will accelerate as people leave and bids evaporate. My prediction: Over time, New York City will lose its status as the intellectual and cultural capital of America. The real estate market in California, at stretched valuations, will suffer. Minnesota, Oregon, Iowa, Maine and others will also feel the pain. Florida and Texas will become the new centers of finance and innovation, with real estate values in Austin and Miami — and even Nashville — reaching valuations once reserved for California and New York over a few decade

http://www.courant.com/opinion/op-ed/hc-op-taxes-south-will-replace-new-york-20171223-story.html

posted by: Michael X on December 21, 2017 1:28pm
The Dems and the leftist media present such a biased view of the tax bill.

This is from Bloomberg news.

How the Tax Bill Will Affect Eight American Families
From multimillionaires to struggling renters, most everyone will get more money initially. But there is bad news on the horizon.

The bottom line, though, is that next year a majority of Americans will get a tax cut. Four out of every five taxpayers can expect a reduction, according to the Tax Policy Center. Overall, the average taxpayer should see their after-tax income rise by 2.2 percent.But we should note these statistics can be misleading. Many lower- and middle- income taxpayers will get a tax cut, sure, but it will be so small they might not notice it, and middle-income taxpayers earning $48,600 to $86,100 will get just a 1.6 percent bump, on average.Now, if you're closer to the top of the heap, earning from $307,900 to $732,800, you'll get a 4.1 percent boost—an average drop in tax bills of $13,480. But even if your taxes do fall in 2018, there's bad news on the horizon. GOP lawmakers set individual tax cuts to expire over time. By 2027, a majority of Americans will see a tax increase compared with current law. (Corporations need not worry—their cuts are permanent under the bill.)How exactly would these changes affect you? It depends on where you live, what you do and how big your family is. You're more likely to get a tax increase if you live in a high-tax state or lean heavily on deductions—such as unreimbursed employee expenses—that will be eliminated under the bill.

Part one.

Part Two.

His eight scenarios examine only 2018 wage and pass-through income (from a business you own), and how taxes owed on those earnings would change when tax time comes around in 2019. We don't examine any larger economic changes that might result under certain portions of the legislation—such as the potential for some low- and middle-income people to see higher health-insurance premiums, or for investors to receive better returns based on a planned corporate tax cut.

The Multimillionaires in New York

These Manhattan residents have a jumbo mortgage (at an assumed 4 percent interest rate) and take a $40,000 deduction on mortgage interest; pay property taxes of $96,250 and state income tax of $135,360; and make annual charitable contributions totaling $100,000.They will pay a bit more next year because they would lose key deductions, especially the ability to put down more than $10,000 in state and local taxes.

The Second-Home Scenario in California

A married couple has a primary residence in Malibu, California, and a second home in Lake Tahoe. The property tax on the Malibu home is $15,860, and they pay $4,896 on their second home; they deduct a total of $40,000 in mortgage interest for the two homes; and they give $50,000 to charity.

This couple would lose almost $86,000 in deductions under the tax bill.

Feel free to read the rest.

https://www.bloomberg.com/news/articles/2017-12-22/cohn-mnuchin-split-helped-break-trump-s-carried-interest-pledge

Bottom line.Bend Over you got one coming.

It is time to require Yale to pay its fair share. Once the exemption for educational institutions was wise policy. Now we have obscenely wealthy Yale enjoying tax exempt status while the city of New Haven is poor. We need to require Yale to pay its fair share. If its circumstances change later and Yale becomes impoverished, we can rethink. Now is now, and fair is fair.

Let's face it Rosa is out for Rosa and husband; Rosa is not looking out for New Haven. She is one of the longest standing Congressperson. She could help the people of New Haven and CT as a whole and just looks out for number one - herself. Her wealth is massive - why? Is it because she has worked hard for her money all of her life like us, the average American worker. No, it's because she is a career politician and has enabled her husband as well to make millions of our taxpaying money. So enough with Rosa looking our for her constituents - she looks out for herself, and that is about it. America has spoken and wanted a change, so let's try to be positive and see how this plays out. It doesn't seem to me that Obama and the Clinton cliques did much to cut spending. Quite frankly, I think that they have overloaded in expenditures. So I guess now we let the new regime take a whack at it and try to make sense of the mess in Washington. Whether we like or dislike, agree or disagree with our newly elected president, he is there, and we should respect the office and who fills the seat. Over the years there have been presidents that I didn't like to get elected, and I still support the position and look for the best. So again let's try to be positive for New Haven and our surroundings.

obsrvr: If you think Yale should pay taxes, you should love this tax bill. For the first time ever, universities will pay taxes on their endowment earnings. Lemar and Harp advocated for an endowment tax, and Trump has delivered it to them!

1644,

NHV doesn't have an income tax problem with Yale. What problem it has is Yales property tax exemption which is wholly a creature of the state (which should pick up the bill.)

As I understand it the endowment tax is federal and will be used as the federal government determines. My suggestion is that Yale is a major property owner in the city of New Haven and should pay its fair share of New Haven real estate taxes to augment the basic revenues of the city and benefit its residents. I see a gross inequity in exempting Yale from the financial contribution that we ordinary homeowners make to the city's revenues by paying our taxes. While Yale is a great asset to New Haven and makes valuable voluntary contributions, it will not bear its fair share of the tax burden unless required by law to do so.

OSRVR,

Non profit tax exemption is one of the earliest creatures of our state (meaning states, plural, not the federal government.) it well predates the United States. When the federal government began fashioning tax law in the late 1800s, one of the first thing they included was exemption for non profits. I suspect there will be an well organized legal challenge to this particular tax code change.
And back to New Haven, forget about Yale paying taxes because their status has been baked into our system from the beginning. Focus your energy on the state legislature where it belongs. They owe New Haven money and they know it.

rob & ob: Yes, it is, of course, a federal tax bill, so the provision deals with federal taxes. Yes, New Haven only direct tax income is from the property tax. Nonetheless, Harp supported a tax on Yale's endowment. As to the state paying in lieu of Yale, PILOT is all about the state paying in lieu of non-profits like Yale. Ob, at least, seems to recognize that Yale's presence does not hurt New Haven, and that Yale is an asset to New Haven. So, I would ask, given that Yale doesn't displace taxable property or lessen the value of New Haven's Grand List, what is Yale's "fair share"? As I have said before, Yale's presence is what gives the rest of New Haven's Grand List value. It's not 1950, so, it's not as if massive, taxable gun and ammunition factories, and clothing factories, would be built on the land Yale occupies if it were not here. As it is, New Haven has a history of fighting to keep high value development out of the city. If New Haven taxpayers want lower taxes, they should welcome high value development.

Yale's tax exemption is, also, in its charter, which, under the US Supreme Court's Dartmouth opinion, cannot be changed without Yale's consent. So, levying non-voluntary taxes on Yale would mean either (a) persuading the US Supreme Court to overrule one of its earliest, and revered opinions, or (b) amending the US Constitution.

Yale's non-profit status is a fiction encoded into law. Our system of government provides for changing the law when it is inequitable. Yale's fair share of the property tax can be ascertained by the same process as my fair share: appraise Yale's properties, give them an assessed value, and apply the mill rate to determine the amount of the tax. As for "baked into the system," what's baked into the system is the idea that the very rich are untouchable. An idea whose time has passed. I suspect that politicians who don't understand this, rather than leading, may soon find themselves running behind their constituents, trying to catch up.

Well, 1644, if the provisions in Yale's Charter would exempt Yale from any non-voluntary taxation, it's hard to see how Yale would be affected by the endowments tax as you earlier suggested . I am no tax policy expert, I leave the nuts and bolts to the pros. I would like to see the school with the multi billion dollar endowment pay its property taxes to the city of New Haven on its real estate holdings, just as I do.

ob: Under the Dartmouth opinion, the charter is a contract between the colony, later state, and the institution. As such, like any contract, neither party can unilaterally change it. (Yale's charter has been changed by legislation, but that legislation was only effective after the Corporation also passed it: in essence, the Corporation and Assembly were tow, equal parties to a contract modification. The United States was not a party to Yale's charter, having not existed when the Charter was granted. One could argue that the United States is a successor to the colony of Connecticut, and therefore bound by prior acts of the colonies, but that theory have never been promoted. E.g., when the United States assumed the war debt of the colonies after the US Constitution's adoption, it did so by specific legislation, the Funding Act of 1790. (If Esbey doesn't like policies that benefit the rich, she would really object to that act, which paid vulture investors 100% on the dollar for debt they had bought heavily discounted from the soldiers and small merchants it had originally been given to in lieu of payment.)