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Bush Plan Could Imperil Tax Write-Off for New York

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Rose Siding Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:08 AM
Original message
Bush Plan Could Imperil Tax Write-Off for New York
As the Bush administration looks to revamp the tax code, New York officials say they are particularly worried about one idea being considered: eliminating the federal deduction for state and local taxes.

If the president pursues this plan, New York State would lose about $37 billion per year in federal tax deductions, more than almost any other state, according to Internal Revenue Service data. The change would affect about 3.2 million households in New York, three-quarters of which are middle- and low-income, tax records indicate.

"This change would be one of the worst things for New York to came out of Washington in a long time," said Senator Charles E. Schumer. "But if they take this route they can expect a serious fight."

With a 7.7 percent maximum state income tax rate, the second-highest in the country behind California's 9.3 percent, New York would be especially affected because its residents use those taxes to take large federal deductions. About 38 percent of households in New York file for some sort of federal deduction of state and local taxes.

New York City residents, who also pay city income taxes, would be especially hard hit as they could expect an 11 percent increase in the amount they pay the I.R.S., or an increase of about $3.4 billion, said Ronnie Lowenstein, director of the city's Independent Budget Office.

http://nytimes.com/2004/12/27/nyregion/27taxes.html
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wolfgirl Donating Member (950 posts) Send PM | Profile | Ignore Mon Dec-27-04 11:10 AM
Response to Original message
1. Of course, Bush will do this and then it will
be blamed on Hillary Clinton. Since NY elected her as the Senator, NY will have to be punished.


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rfranklin Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:16 AM
Response to Reply #1
3. Well, she keeps voting with Bush...
why shouldn't she share the responsibility?
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Inland Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:15 AM
Response to Original message
2. Yep. The blue states take another shot of Bushonomics
Reward your friends, punish your enemies.
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POAS Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:16 AM
Response to Original message
4. Sounds like a
"Backdoor" tax increase.

Let's see, a backdoor draft and a backdoor tax increase, is Bush trying to tell us something? Oh yea, "Put it where the sun don't shine Amerika!"
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Danmel Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:25 AM
Response to Original message
5. I tried to warn people
I knew that this wing nuts wouldn't care about the war )they love Bush the cowboy), civil or human rights (those are for Commies), Choice (unless it was their daughter), the environment (tree huggers)

I did think they'd care about their own pocketbooks and in a hight ax area like Long island, middle class homeowner would be crushed by the elimination of mortgage and local property tax dedications.

They didn't believe me- guess they'll be sorry when it hits them in the wallet., but I don't want to lose my home to this.
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bklyncowgirl Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:26 AM
Response to Original message
6. Proposed tax changes hurt working people
The administration's tax changes particularly, elimination of state income tax deduction will seriously impact the middle class. The Republicans believe in taxing work not wealth. This is class warfare pure and simple and the Democrats need to shout this to the rafters.
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Bush_Eats_Beef Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 11:31 AM
Response to Original message
7. I hope they get "a serious fight" no matter WHAT avenue they pursue
I haven't read a SINGLE proposal, from DECIMATING the middle class with the "National Sales Tax" to all of the deductions being swept away, that will do ANYTHING except boost Bush's "base" of the "haves and have mores."

I hope that everyone that's PROMISED to fight this garbage KEEPS that promise when Junior returns from his holiday vaction on the Crawford Pig Farm.

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bain_sidhe Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 02:51 PM
Response to Original message
8. will they also repeal the new deduction that benefits TX and FL?
If you recall, the tax bill signed in October included a provision to allow residents of states that don't have income taxes to deduct sales taxes instead. (The poor things whined that it was so unfair that they don't get a deduction for taxes that they don't pay when people who DO pay income taxes get to deduct them from their federal income taxes.) This deduction would only benefit taxpayers who itemize, so most lower and lower-middle income taxpayers don't benefit (unless they have a big mortgage). And of course, as we all know, sales taxes are the most regressive form of taxation as it is, since lower-income people spend a higher proportion of their income on goods and services subject to the sales tax. The states that use high sales taxes instead of a combination of low sales taxes and income taxes to fund state needs are ALREADY giving a big break to high-income earners. Now upper income people not only will pay a lower percentage of their income in sales taxes, they'll get to deduct the percentage they DO pay.

So, whaddya think? Are they going to repeal that deduction when they eliminate the federal deduction for state income taxes?

Yeah. Right. That's gonna happen.

Some background on the sales-tax break can be found here:
http://www.cppp.org/products/PP215.html
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proud_Kucitizen Donating Member (191 posts) Send PM | Profile | Ignore Mon Dec-27-04 03:00 PM
Response to Original message
9. Should we be encouraging our states
who have an income tax to change from that system to a sales tax only system instead. I live in Ohio and it seems like it could hurt the Republicans in power here if this happens.

Oops, I forgot they can just fix the election so guess it's of no consequence.
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cascadiance Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-27-04 03:36 PM
Response to Reply #9
10. Perhaps states like California and New York should get more creative...
Edited on Mon Dec-27-04 03:40 PM by calipendence
If the Repukes were to get rid of state income tax deduction, and replace it with a state sales tax deduction, then these various states could then get rid of "income" tax, and replace the sales tax with something that's progressive and sensitive to income levels somehow. Perhaps have an "income ID" card, and those of higher income are taxed more heavily with sales tax on stuff than those with lesser income tax.

I know this system might be fraught with fraud, and perhaps really hard to manage, but if done right, perhaps it would help us in "blue states" with large state income tax using states rights to fight right back at their attempts to steal tax money from our states.

If they try to then qualify which state sales taxes qualify for deductions to remove the effects of these creative sales tax modifications, then you make it public the resulting more bvious agenda these repukes are trying to take money away the "blue states", with the statistical data that shows that they've already been doing this in past years already to a lesser extent, and campaign heavily on building citizen "revolt" in the affected states. Perhaps even go so far as build a case for something like a California secession proposition, if things go too far.

The Republicans control the executive, legistlative, and judicial branches in Washington. It's hard to contend with them there, especially if they take away fillibusters. But we can get them back with the added power that has been added to states on the blue states in state offices this last election.

If Arny here in California tries to stop this sort of thing, if the measures that are being done are supported by most of California, and require him to sign off on a special election to put them in place outside of the normal election year cycle, you could tell him that he can either be a part of the solution for California, or fight against these efforts, and risk us to call another out of cycle recall election so that we can both get rid of him *and* add these measures to the recall election (much like other measures were added to the earlier special recall election).
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