1 - Goose
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SALT Talks
Budget vote uncertain as Congress tries to move on to tax reform
The House of Representatives votes Thursday on a budget resolution that would allow Congress to fast-track a tax reform bill, a major legislative effort that Republicans are desperate to launch.But frustration over a proposal to eliminate a popular tax deduction has some Republicans threatening to rally together and vote with Democrats in opposition to the budget.
The current tax reform framework calls for nixing the State and Local Tax deduction (SALT), a tax break used by nearly one-third of filers. Cutting the deduction would help Republicans raise more than a trillion dollars to help pay for tax cuts over 10 years, making it a huge source of revenue for their overall plan to reform the tax code.
But Republicans from states like New York, New Jersey, Illinois and California argue that their constituents rely on the deduction. While some are open to making changes to SALT -- such as capping the income level at which taxpayers could use it -- others don't favor any kind of compromise and want tax writers to leave SALT completely alone."My solution is to take it off the table," said Republican Rep. Leonard Lance of New Jersey. :
Negotiations were set to continue Thursday morning in a closed door meeting, as Republican leaders seek to get more members on board for the budget. The GOP can only afford to lose 22 of its own members and still pass the bill.
While more than 30 Republicans represent districts in high-tax states, it was unclear late Wednesday just how many of them would oppose the budget.
The House passed a budget earlier this month, but the Senate made some changes when it approved it last week and then kicked it back over to the House.
One of those changes was language that targets deductions like SALT, which is why some lawmakers -- like Lance -- say they'll oppose the budget even if a deal is worked out.
"The preference is to keep the state and local tax as is," said Republican Rep. Tom Reed of New York. "Clearly, in my opinion, that is not going to be the case, so then the question becomes, is there a compromise position that we can live with?"
The state and local tax deduction was one of the earliest deductions that Republicans announced would be eliminated, and the uproar was swift. The House GOP is expected to unveil text of its bill next week, and members warn that there will be a dozen more changes to the tax code that will upset members and various constituencies.
Last edited by Goose (10/26/2017 6:20 am)
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists.
- tennyson
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Re: SALT Talks
The budget just narrowly squeaked by the House. The vote was 216-212, with 20 Republicans joining Democrats in opposing the measure. It is interesting to see just how the GOP can now justify further deficits while previously being the party of deficit reduction.
The coming battle, however, over tax reform will be the ones that most Americans are keeping their eye on. It will be a doozie.
Whether staunch Conservatives balk at the spending remains to be seen as deficits seem NOW some how magically not to matter.
Last edited by tennyson (10/26/2017 11:18 am)
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- Goose
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Re: SALT Talks
SALT and the 401k issue bear close watching.
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists.
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Thread Starter- TheLagerLad
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Re: SALT Talks
My local rep, a Republican named Brian Fitzpatrick was one of the twenty who voted against the bill.
From a purely selfish perspective, losing the state and local deduction would be painful for me and those in our district because we have some pretty significant property taxes. Credit to our rep for recognizing this and not towing the party line.
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- Just Fred
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Re: SALT Talks
So basically we're looking at a shell game here. We lower your taxes and eliminate your deductions? In the end the sum benefit of a lower tax rate could be zero. Is that about right?
- Goose
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Re: SALT Talks
Just Fred wrote:
So basically we're looking at a shell game here. We lower your taxes and eliminate your deductions? In the end the sum benefit of a lower tax rate could be zero. Is that about right?
Pretty much, yes.
If they cap 401k contributions at some ridiculous level, and limit the deduction for SALT I will have a lower rate but pay more in the end.
Last edited by Goose (10/26/2017 12:41 pm)
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists.
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Thread Starter- TheLagerLad
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Re: SALT Talks
So basically we're looking at a shell game here. We lower your taxes and eliminate your deductions? In the end the sum benefit of a lower tax rate could be zero. Is that about right?
The may not lower taxes and take your deductions.
What nobody knows at this point, outside of a few in Congress, is what the tax bill looks like? Will it end SALT? Will it end the home mortgage or charitable deductions? How much of the tax cuts go to the wealthy vs the working class? How much to rates change?
Nobody knows.
The only thing this vote did was set the rules for the debate, which will allow the Senate to pass whatever comes out of the house with 50 votes plus Pence.
Serious question: Where is the Democrats tax plan to use as a counterpoint to whatever Paul Ryan whips up?
I think you're going to see a lot of different United States of America over the next three, four, or eight years. - President Donald J. Trump
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Re: SALT Talks
So basically we're looking at a shell game here. We lower your taxes and eliminate your deductions? In the end the sum benefit of a lower tax rate could be zero. Is that about right?
The may not lower taxes and take your deductions.
What nobody knows at this point, outside of a few in Congress, is what the tax bill looks like? Will it end SALT? Will it end the home mortgage or charitable deductions? How much of the tax cuts go to the wealthy vs the working class? How much to rates change?
Nobody knows.
The only thing this vote did was set the rules for the debate, which will allow the Senate to pass whatever comes out of the house with 50 votes plus Pence.
Serious question: Where is the Democrats tax plan to use as a counterpoint to whatever Paul Ryan whips up?
Good question. Of course, depending on how this bill goes, the Dems might not need to run in 2018 with a tax plan any more detailed than "We are going to save your 401K and reinstate your SALT deduction.
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists.
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Thread Starter- TheLagerLad
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Re: SALT Talks
So basically we're looking at a shell game here. We lower your taxes and eliminate your deductions? In the end the sum benefit of a lower tax rate could be zero. Is that about right?
The may not lower taxes and take your deductions.
What nobody knows at this point, outside of a few in Congress, is what the tax bill looks like? Will it end SALT? Will it end the home mortgage or charitable deductions? How much of the tax cuts go to the wealthy vs the working class? How much to rates change?
Nobody knows.
The only thing this vote did was set the rules for the debate, which will allow the Senate to pass whatever comes out of the house with 50 votes plus Pence.
Serious question: Where is the Democrats tax plan to use as a counterpoint to whatever Paul Ryan whips up?
Good question. Of course, depending on how this bill goes, the Dems might not need to run in 2018 with a tax plan any more detailed than "We are going to save your 401K and reinstate your SALT deduction.
That's very true, but I've always looked at a budget as a set of priorities and a set of values.
It wouldn't kill the Dems to declare their set of priorities and values as we are about a year out from the midterms.
Yes, it will require the Bernie Bros and the Dem establishment to get along, but if Trump is the threat we all know he is, and the Republican party is on the road the nationalism, nativism, and racism, along with it's traditional economic message of boosting the wealthy at the expense of everyone else, it would be wise for the Democrats to build a strong game plan for economic growth, increased wages, a sane foreign policy, and a return to political normalcy.
I haven't seen that yet.
I think you're going to see a lot of different United States of America over the next three, four, or eight years. - President Donald J. Trump
- Tarnation
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Re: SALT Talks
So basically we're looking at a shell game here. We lower your taxes and eliminate your deductions? In the end the sum benefit of a lower tax rate could be zero. Is that about right?
The may not lower taxes and take your deductions.
What nobody knows at this point, outside of a few in Congress, is what the tax bill looks like? Will it end SALT? Will it end the home mortgage or charitable deductions? How much of the tax cuts go to the wealthy vs the working class? How much to rates change?
Nobody knows.
Frankly, this is taking on an aroma like that surrounding the telephone-directory thick Affordable Care Act bill of 2009--"we'll need to pass it before we can read it".
Most troubling is that NO ONE is disclosing what the new tax brackets and rates would be.
Therefore, it is impossible to estimate how one would fare under any version of the bill. Have you seen a "tax calculator" app on any of the major news sites?
Seems like we are about to write a blank check to Uncle Sam.
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