Tax Bill is a loser

[bluehenbillk]

There are more economical hazards to this plan.
Two come to mind very easily.

1- Less Spending negates any job impact. When people pay more $ in taxes that's less $ they're going to spend elsewhere. That means less revenue coming into companies which means they need to cut costs (jobs).

2- Housing bubble risk - there is less incentive to buy a house moving forward, so less new homes will be built & the supply of houses on the market (you'll really see this next spring) will start to far exceed the demand. What this means is it's a buyer's market - back to the days of low-balling existing homeowners and watching your home value drop. As long as you're not selling in the near future you won't really get hurt, but if you just bought you'll kick yourself & if you're selling next in the next year or two you just learned you'll get less.

[Chizzang]

[Baldy]

[89Hen]

Well first like I said there is nothing you can do about it but it isn't a matter of higher compensation to do the same work. The tax code is based on an absolute dollar value. So Let's say I make $100,000 in South Carolina and it cost me $35,000 to live and I pay $25,000 in taxes. I'm $40,000 ahead. I live in NYC make $100,000 and it cost me $60,000 to live and I pay $30,000 in taxes. I'm $10,000 ahead.

Like I said there is no way around this because if we attempted to adjust federal income taxes based on cost of living there would certainly be a revolt of the highest magnitude. But still a dollar ain't worth the same in every geographical location.

A dollar isn't. But compensation for similar work/services isn't the same either.
A person making $100k in SC is not necessarily doing the same job as a person making $100k in NYC.

I get what you're saying about same job for different pay because you're in a high cost area, but IMO that's really irrelevant. The tax code views somebody who makes $X as rich or poor regardless of where they live. The mortgage interest deduction is an easy rallying point for the tax the rich crowd. Surely anyone living in a house that requires more than a $500,000 mortgage is rich.

$750,000 here...



$450,000 in Wichita...

[OL FU]

A dollar isn't. But compensation for similar work/services isn't the same either.
A person making $100k in SC is not necessarily doing the same job as a person making $100k in NYC.

I get what you're saying about same job for different pay because you're in a high cost area, but IMO that's really irrelevant. The tax code views somebody who makes $X as rich or poor regardless of where they live. The mortgage interest deduction is an easy rallying point for the tax the rich crowd. Surely anyone living in a house that requires more than a $500,000 mortgage is rich.

$750,000 here...



$450,000 in Wichita...

Exactly the tax code looks at a dollar as a dollar no matter where you live

[89Hen]

And anyone who says the change wouldn't tank the housing market is a fool. I have a buyer under contract that called the agent this morning because they are having second thoughts due to the proposed tax bill. Not kidding.

[CAA Flagship]

Exactly the tax code looks at a dollar as a dollar no matter where you live

One line of it does.
But combine that line with the rest of it and it doesn't. For simple example:

Make 100k in NYC. Pay 5k in state and local taxes and use deduction. Taxable income now 95k. Pay fed taxes.

Make 100k in FL. Pay no state and local taxes. Taxable income is 100k. Pay fed taxes.

[89Hen]

Exactly the tax code looks at a dollar as a dollar no matter where you live

One line of it does.
But combine that line with the rest of it and it doesn't. For simple example:

Make 100k in NYC. Pay 5k in state and local taxes and use deduction. Taxable income now 95k. Pay fed taxes.

Make 100k in FL. Pay no state and local taxes. Taxable income is 100k. Pay fed taxes.

[OL FU]

Exactly the tax code looks at a dollar as a dollar no matter where you live

One line of it does.
But combine that line with the rest of it and it doesn't. For simple example:

Make 100k in NYC. Pay 5k in state and local taxes and use deduction. Taxable income now 95k. Pay fed taxes.

Make 100k in FL. Pay no state and local taxes. Taxable income is 100k. Pay fed taxes.

t

Which doesn’t come close to offsetting the cost of living

[OL FU]

And that was my point. That and other deductions helps with the cost of living issue

[Chizzang]

And anyone who says the change wouldn't tank the housing market is a fool. I have a buyer under contract that called the agent this morning because they are having second thoughts due to the proposed tax bill. Not kidding.

I did mention Trump would tank the housing market...

[∞∞∞]

And anyone who says the change wouldn't tank the housing market is a fool. I have a buyer under contract that called the agent this morning because they are having second thoughts due to the proposed tax bill. Not kidding.

I did mention Trump would tank the housing market...

He'll probably tank the deficit too with this plan, but not tank it in a good way.

[CAA Flagship]

One line of it does.
But combine that line with the rest of it and it doesn't. For simple example:

Make 100k in NYC. Pay 5k in state and local taxes and use deduction. Taxable income now 95k. Pay fed taxes.

Make 100k in FL. Pay no state and local taxes. Taxable income is 100k. Pay fed taxes.

t

Which doesn’t come close to offsetting the cost of living

Why does this matter re: fed taxes?
In reality, that 100k job in FL pays 120k in NYC. The increased salary takes into account the cost of living which includes taxes. Let the market figure this out. The fed govt shouldn't be concerned with the differences between states. Let the states figure this out.

[89Hen]

t

Which doesn’t come close to offsetting the cost of living

Why does this matter re: fed taxes?
In reality, that 100k job in FL pays 120k in NYC. The increased salary takes into account the cost of living which includes taxes. Let the market figure this out. The fed govt shouldn't be concerned with the differences between states. Let the states figure this out.

You obviously don't get it. The increased salary takes care of the increased cost of living. I have to earn more to live here and I pay taxes on what I earn. You are saying it's OK for the government to tax me at a higher rate because I earn more, even though my "extra money" you seem to think I have sitting around is going towards more expensive housing, more expensive groceries, more expensive tuition, etc...

[CAA Flagship]

Why does this matter re: fed taxes?
In reality, that 100k job in FL pays 120k in NYC. The increased salary takes into account the cost of living which includes taxes. Let the market figure this out. The fed govt shouldn't be concerned with the differences between states. Let the states figure this out.

You obviously don't get it. The increased salary takes care of the increased cost of living. I have to earn more to live here and I pay taxes on what I earn. You are saying it's OK for the government to tax me at a higher rate because I earn more, even though my "extra money" you seem to think I have sitting around is going towards more expensive housing, more expensive groceries, more expensive tuition, etc...

But the increased cost of living INCLUDES the tax implications. You just got used to it and forgot about it.

[93henfan]

t

Which doesn’t come close to offsetting the cost of living

Why does this matter re: fed taxes?
In reality, that 100k job in FL pays 120k in NYC. The increased salary takes into account the cost of living which includes taxes. Let the market figure this out. The fed govt shouldn't be concerned with the differences between states. Let the states figure this out.

You do realize the federal government pays people at the same grade different wages depending on where they work, no?

I get a 27.1% kicker for working in DC.

[CAA Flagship]

Why does this matter re: fed taxes?
In reality, that 100k job in FL pays 120k in NYC. The increased salary takes into account the cost of living which includes taxes. Let the market figure this out. The fed govt shouldn't be concerned with the differences between states. Let the states figure this out.

You do realize the federal government pays people at the same grade different wages depending on where they work, no?

I get a 27.1% kicker for working in DC.

Yes. What does that have to do with this?

[93henfan]

You do realize the federal government pays people at the same grade different wages depending on where they work, no?

I get a 27.1% kicker for working in DC.

Yes. What does that have to do with this?

You said "let the market figure it out". In the case of wages, the federal government disagrees. They believe geography matters in that instance. The point others are making is that the tax code hasn't caught up to that concept.

[CAA Flagship]

Yes. What does that have to do with this?

You said "let the market figure it out". In the case of wages, the federal government disagrees. They believe geography matters in that instance. The point others are making is that the tax code hasn't caught up to that concept.

No. The market is the wage market. The govt figured it out just like most mult-state corps.

Now where is it that the tax code hasn't figured it out?

[89Hen]

You obviously don't get it. The increased salary takes care of the increased cost of living. I have to earn more to live here and I pay taxes on what I earn. You are saying it's OK for the government to tax me at a higher rate because I earn more, even though my "extra money" you seem to think I have sitting around is going towards more expensive housing, more expensive groceries, more expensive tuition, etc...

But the increased cost of living INCLUDES the tax implications. You just got used to it and forgot about it.

NO IT DOES NOT. If you were right, I would get another pay increase because of the federal tax plan about to go into effect.

[CAA Flagship]

But the increased cost of living INCLUDES the tax implications. You just got used to it and forgot about it.

NO IT DOES NOT. If you were right, I would get another pay increase because of the federal tax plan about to go into effect.

Cost of living is something the wage market should concern itself with. The tax code should have nothing to do with cost of living adjustments.
And yes, if you get dinged on a tax law change, your employer would have to consider making an adjustment to your compensation as a cost of living increase, just like they do with inflation.

[89Hen]

NO IT DOES NOT. If you were right, I would get another pay increase because of the federal tax plan about to go into effect.

Cost of living is something the wage market should concern itself with. The tax code should have nothing to do with cost of living adjustments.
And yes, if you get dinged on a tax law change, your employer would have to consider making an adjustment to your compensation as a cost of living increase, just like they do with inflation.

[89Hen]

Flaggy, let me ask you this... why does Fannie/Freddie, FHA and VA all have different loan limits for different counties? Why not just one limit for everywhere? The housing market will figure it out.

[CAA Flagship]

Cost of living is something the wage market should concern itself with. The tax code should have nothing to do with cost of living adjustments.
And yes, if you get dinged on a tax law change, your employer would have to consider making an adjustment to your compensation as a cost of living increase, just like they do with inflation.

Give up?

[OL FU]

You obviously don't get it. The increased salary takes care of the increased cost of living. I have to earn more to live here and I pay taxes on what I earn. You are saying it's OK for the government to tax me at a higher rate because I earn more, even though my "extra money" you seem to think I have sitting around is going towards more expensive housing, more expensive groceries, more expensive tuition, etc...

But the increased cost of living INCLUDES the tax implications. You just got used to it and forgot about it.

So when is the next music poll