After Trump signs misleading law raising local taxes, people prepay taxes. How d

[Texacon]

https://www.democraticunderground.com/100210028911

TheBlackAdder (7,857 posts)


After Trump signs misleading law raising local taxes, people prepay taxes. How does it work?

.

After Trump signs misleading law raising local taxes, town officials thank him for ‘solving cash flow problem’


Some local officials have found a silver lining in a Republican tax law that lavishes benefits on the wealthy while raising local and state taxes in some Democratic-leaning states.

The Wall Street Journal reported this week that residents are lining up in places like Cherry Hill, New Jersey to pre-pay 2018 taxes before the Republican tax law caps local deductions at $10,000.

Hundreds more stood in line Fairfax County, Virgnia and Montgomery County, Maryland, according to the paper.

Officials in Montgomery County even passed special legislation allowing residents to pay their taxes early.



https://www.rawstory.com/2017/12/after-trump-signs-misleading-law-raising-local-taxes-town-officials-thank-him-for-solving-cash-flow-problem/


How does this work?

They mention state & local taxes, but what kind are involved?

 

Trump raised all the local taxes on people.  LOL

Ms. Toad (15,988 posts)

5. You actually can

If you can't deduct them in 2018, you are effectvely pre-paying them at a lower rate if you pay them in 2017.

You are paying them with pre-tax money in 2017, rather than post-tax money if you pay them in 2018. That means that if you wait until next year, and you are in a 15% marginal tax bracket, you can pay $100 in taxes from your gross income this year (and owe no federal taxes on it this year), or pay it with $117.65 from your gross income next year. (The added $17.65 go to pay the additional federal taxes you will owe on the $100 next year.) As your marginal tax rate goes up, the cost of waiting until 2018 to pay them goes up more).

The stupid ... it burns.  No you're not 'effectively paying them at a lower rate', you're paying them at the same rate, you just don't get a federal government subsidy.  This points out just how irresponsible your state is in managing money.

no_hypocrisy (30,150 posts)

7. How it works:

Let's say your property taxes (municipal, school, county) are $16,000 annually. If you pay next year, you can only deduct $10,000, leaving you with $6,000 added onto your wages, etc. which is then used to calculate how much federal tax you'll have to pay.

So, instead of adding $6,000 that not only did you NOT earn, but paid for already, you pay today -- or at least before 4:00 p.m. this Friday. You can pay the $6,000 or the full $16,000 (if you have it on hand). This way, you have a win/win for 2017-2018. For 2017, you have $32,000 deduction for the property taxes for two years ($16,000 x 2) and you won't have to pay extra federal tax on the balance of your municipal tax after deducting the $10,000 in 2018. And assuming Congress (either party) doesn't change Taxscam after 2018, the true impact would be felt for the tax year of 2019.

Ok, am I misreading what DUmmie is saying?  This DUmmie thinks if you can't deduct it you didn't EARN it!  LOL  How they hell do you pay for stuff without earnin .... Oh, wait, never mind.   


KC

[USA4ME]

This isn't that hard to understand, primitives. They're paying this year so they can take the full deduction rather than wait and only be able to deduct up to $10K starting next year.

Of course, the stupid Dems running the counties will still find a way to bust the budget next year even with receiving money in advance.

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[SVPete]

Ummmmm ... the Federal government cannot raise or lower local taxes. False premise, stupid conclusion.

[Zathras]

Ummmmm ... the Federal government cannot raise or lower local taxes. False premise, stupid conclusion.

In other words SOP for DUmmys.

[Texacon]

If you keep reading leftist garbage that has a leftist spin on it, you're going to wake up and go to sleep just as ignorant as you were the day before. 

Just sayin'.

KC

[Carl]

This is what confuses me,if you are paying over 10g in property taxes then there is a bit of a defacto presumption that person is doing well.

I get that states without an income tax may mean higher property ones but still and I don`t begrudge them.

Also I wonder how many think it is dollar for dollar.
Those high local taxes paid do not create an equal offset in federal income taxes.

[Texacon]

Bengus81 (2,131 posts)

19. Even if you can do that it's just a band-aid to this Trump tax SCAM....

The same limit's will be there the next year and the one after that. Looks like many in the middle to upper middle class learned this was a Republican SHAFTING very early on.

It isn't a shafting.  It is setting things to right.  Those of us in conservative states who are living within our budget are tired of sending you money.  It was all hidden before, but this is bringing that fact to light.  If you don't like it, take it up with your STATE!

KC

[SVPete]

The citizens of Taxaholic-Spendaholic states like CA or NY benefit less or take a small hit. Well, a majority of voters in those states voted for the Taxaholic-Spendaholic pols are getting the consequences of what they voted for. The only ones in those states who have a right to be POed are those, like me, who have consistently voted against the Taxaholic-Spendaholic politicians. And my ire, to the extent I have any, is toward those idiot politicians and the people who were fools enough to vote for them.

[Texacon]

The citizens of Taxaholic-Spendaholic states like CA or NY benefit less or take a small hit. Well, a majority of voters in those states voted for the Taxaholic-Spendaholic pols are getting the consequences of what they voted for. The only ones in those states who have a right to be POed are those, like me, who have consistently voted against the Taxaholic-Spendaholic politicians. And my ire, to the extent I have any, is toward those idiot politicians and the people who were fools enough to vote for them.

Yes sir, and I'm sorry that a lot of good people in those places will have to suffer a little bit, but I'm hopeful that enough of you can get the word out that this is a STATE problem and not a FEDERAL problem that you can make a difference in your state(s).

KC

[Old n Grumpy]

Maybe this will wake up the dummies in high tax dem run states and vote them out. 

Just another thing for the dumb asses to worry about at election time.

[DLR Pyro]

Maybe this will wake up the dummies in high tax dem run states and vote them out. 

They won't.  The tax and spend politicians have been charging them high taxes for decades but the DUmmies didnt worry about it because they could claim it on their Fed taxes.  Now Trump is reducing what can be claimed and the DUmmies accuse him of raising local taxes when they should be upset at their state for screwing them for decades.