Mr. Oman's piece ridiculously assumes that the only wealthy taxpayers who
live California are liberal ones. Just because I live in California does not
automatically put me in the liberal category with Speilberg and other
Nate - This proposed "tax hike" already exists. It's called the
alternative minimum tax (AMT), and it disproportionately affects those taxpayers
with high state income tax deductions, since state and local income taxes
aren't deductible in computing AMT. In addition, the existing
tax system fails to consider differences in cost of living among different
states. Thus, a middle class family in San Francisco would earn much more than
a comparably situated middle class family in Utah, yet they would pay a much
higher percentage of their income in U.S. federal income taxes (even
disregarding the AMT). You can't reasonably compare a family earning
$75,000 in San Francisco to a family earning $75,000 in Provo; the family in
Provo has buying power far in excess of the San Francisco family, yet from a
U.S. federal income tax standpoint (ignoring higher state taxes in California),
they would be situated similarly. The deductibility of the higher state taxes
in California, if anything, helps mitigate this distortion.Your
proposal disregards both of these points, by attempting to simplify problems
with a very complex tax system into a simple "solution" based on a
theory that may not even pan out empirically.
"Right now, for example, Steven Spielberg and other Hollywood moguls that
funded the Obama campaign can deduct the full amount of the their high
California taxes."-----------Surely, all the
tax-happy "Hollywood moguls", who presumably believe the government can
do better with our money than we can, would refrain from taking these deductions
out of sheer principle.Surely, they would not be so hypocritical as
to complain about others not paying enough in taxes and then turn around and
avoid paying their own full "fair" share!?
@San Diego Chargers Fan: TIL Conservatives are California's silent
majority. Good to know.
Taxman is 100% correct. I would add that itemized deductions are phased out for
high income earners under the new law (taxpayers can lose up to 80 percent of
their deductions for mortgage interest, property taxes, state income taxes and
charitable deductions), further making this column unnecessary. Mr. Oman's lack of tax/economics background are painfully displayed in
his piece. I suggest he stick to politics, law and other areas he may know
something about.On a constructive note, a good (and fair) spending
curb might be to limit the amount a state can receive from the federal
government each year to the amount their residents pay in federal taxes.
It's time Alaska and other "taker" states carry their own weight.
Taxed Enough Already. Reduce spending.
Just cut spending so much that no one's taxes have to increase, and cap it
there. Heck, let's cut government spending so that everyone's taxes
go way down and they have more to spend, save, and invest. Think of the
tremendous economy that would stimulate!What to cut? Everything.
What we need are leaders who have the guts to make sacrifices that affect
everyone. Liberals often say that raising taxes on the rich is the solution
while Conservatives say lowering spending on social welfare programs is the
solution. Back when Paul Ryan released his budget I was hopeful he
had a good solution, that is until I read it. He would cut spending just about
everywhere with one big exception, the defense budget. About 20% of the total US
budget goes to defense spending. The US spends 6-7 times more on defense than
the #2 on the list, China. The US spends more than the next 20 countries
combined and nearly all of them are our allies. So why is defense
spending a sacred cow? Because it creates a lot of jobs in our economy. Utah has
Hill AFB and the new NSA data center as examples. What if balancing the budget
means closing Hill AFB, would Utahns be willing to make that sacrifice?It's easy to say that we can fix this budget crisis by just cutting the
budget, but ask yourself what you are willing to sacrifice to meet this goal.
How unfortunate that mr Omar decides to use such childish comments to try to
make his point. I have to wonder if he would allow his students to use such
shallow logic in his classroom.
Deductions get phased out for some very high earners -- Steven Spielberg no
doubt -- and the AMT hits them. Still, there are a lot of people who make a lot
of money -- more than I do! -- who still get the full benefit of the state
income tax deductions. A couple of google searches suggests that the deduction
costs the federal treasury about $50-$60 billion annually. Oman is hardly
unmoored from reality. Folks in NY DO have a lower federal tax rate than I do
in Virginia. As for the higher cost of living, I am at a loss as to why people
in reasonably priced states ought to be subsidizing the lifestyle of people in
expensive states. The people who live in San Francisco do so for a reason. The
cost comes from the fact that it's "cool" to live in San Francisco.
There are lots of cultural and economic opportunities to say nothing of the fun
of looking down on the rubes in Utah. That's their choice. Why tax Utahns
a higher rate for not making the same choice?
To "matt4226" tell me where in the constitution anything that the Ryan
plan cut funding on is specifically mentioned.The big question you
should ask is how did we allow all of the non-constitutional mandated spending
@Some Random GuyIf you (and Oman) want to make a legitimate
"fairness" argument, then the only rational argument is to eliminate the
deduction entirely (rather than capping it). You, as a Virginian, are crying
about New Yorkers' deductions, but somebody from Alaska, Nevada, etc., is
equally justified to cry about yours. It comes across as disingenuous at
best to argue that a tax expenditure is unfair and then want to scale it back
only to the point at which it stops benefiting you.