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SALT and Me
The congressman in my district (NJ 11) is retiring, which means the election to replace him is wide open. Though Republicans have held this seat for a long time, it could flip to the Democrats. The Democrat candidate is running ads saying we should vote for her because the Republican will raise our taxes. What? In my book, when a Democrat says they want lower taxes, they are lying. Not to jump to conclusions, I pulled out my tax information, ran the numbers for myself, and it turns out, Mikie Sherrill (D) is lying.
The issue is the new caps on the State And Local Tax (SALT) deduction. The Democrat’s ad states that her Republican opponent, Jay Webber, supports the cap. He does not. Webber has said many times that there shouldn’t be a cap on this deduction. What he does believe is that as a whole, the tax reform package will benefit New Jersey families. The numbers seem to bear that out on average, but the important question is, what about me?
I pulled out my 2017 tax return to see what the difference would be if I ran last years numbers using the 2018 rates and rules. The first thing to note is that the standard deduction is almost double what it was previously, which means fewer people will be itemizing their taxes now. Looking at my numbers, I will still be using the Schedule A itemization. Since my State and Local taxes exceed $10,000, I will be subject to the cap. That means fewer deductions than I had in 2017. Sounds bad, but because of changes to the rates my overall tax amount still ends up about $800 less than under the 2017 rules. So while the SALT cap did cost me a deduction, overall I still came out on top.
Looking at this district, I am pretty average. I know what you’re thinking, “No Vance, you’re extraordinary!” Perhaps, but my household income is about average for NJ’s 11th district. That means average folk, like me, and lower income people will benefit from the tax cuts even with the SALT cap. Who will pay more? People like Mikie Sherrill.
If you live in a $2 million dollar home like Sherrill does, then you probably pay between $45,000-$55,000 a year in property taxes alone. The $10,000 cap will hurt those people. That is why both Sherrill and Webber oppose the cap. But if your party constantly says that the wealthy should, “pay their fair share” is losing a deduction for the “rich” really so bad? How is this for a new campaign slogan “Mikie Sherrill – Champion of the 1%.”
Published in General
Did you remember to take away the personal exemptions for your 2018 simulation? That cancels a pretty big chunk of the doubling of the standard deduction for families.
Yes, so my taxable income was higher but then the the Child tax credit doubled so I still end up several hundred dollars ahead.
Hearing a Democrat complaining about high taxes is just a bit much for me to take, especially when she is complaining about something her opponent never supported.
Personally, I would have settled for just the Corporate tax cut.
If Mikie Sherrill really wanted to help, she’d run for the state or local office and help cut the exorbitant NJ property taxes be spending less money!
But that’s just crazy talk.
Until recently I lived in New York State and watched the Democrats and their media arms exhibit impressive dexterity at focusing only on the SALT issue and not looking at the other aspects of the tax law and the fact that the vast majority of taxpayers even in a high tax state like New York would see an overall decrease in taxes. I also took amused irony from their arguments that it was wrong for the richest people to pay more in taxes. Democrats arguing that rich people should pay less in taxes?
Their real problem is that state tax revenue has become so dependent on a relatively few taxpayers (a couple of years ago something like 40% of New York income tax revenue came from a mere 25,000 taxpayers in a state of 19 million people). The state would be in serious financial trouble if even a small number of those few taxpayers leave the state.
Well Vance, at least Jay Webber can count on your vote and mine. I’m not too optimistic.
The Democrats are spending a lot of money on this race. Her ads are on all the time. GOP doesn’t seem to be giving the same support to Webber.
For most people, if your SALT deductions will be limited this year, they have effectively been limited in past years by the alternative minimum tax (which is now reduced). The resulting difference is much smaller than either side wants to admit.
I don’t have a lot of sympathy. As many of you know, Tennessee doesn’t have an income tax, and Congress did away with the deduction for sales taxes years ago.
This is correct. I can’t believe that Democrats are running on a platform to lower taxes on the rich. Ever since the ACA passed my family has never had enough to itemize because our medical Bills just never reach the new threshold even with substantial property taxes (10k)
Not itemizing is kind of nice. I do our taxes in about an hour and a half.