IRS closes SALT loophole

From Accounting Today:

It’s over: States lose fight against SALT deduction cap

New York, New Jersey and Connecticut have been fighting a new cap on state and local tax deductions ever since it was included in the 2017 Republican tax overhaul.

They are losing.

The tax law capped the federal deduction for state and local taxes, or SALT, at $10,000. That set off campaigns to eliminate the provision by politicians in states with high income taxes and high property taxes, which tend to be Democratic states. It also set off an effort to find legal workarounds that would ease the sting of the SALT cap out of fear that high-earning residents would move out of state.

Now, most of those laws have been invalidated and those that remain are on shaky legal ground or taxpayers have decided they aren’t worth the hassle.

Four northeastern states, including New York and New Jersey, will argue in a court hearing later this month that the cap infringed upon their constitutional right to tax. Legal experts, including those who would like to see the states win, have said the case is a long shot.

Members of Congress have introduced several bills to repeal or raise the cap. Such legislation might pass the Democratic-controlled House, but would die a quick death in the Republican-led Senate that has no interest in unwinding parts of their signature tax law.

The Treasury Department late Tuesday dealt the final blow. It issued regulations that prohibit programs in high-tax states that would allow filers to circumvent the law. Treasury said those programs allowed taxpayers to claim too many tax breaks.

States including Connecticut and New York have passed laws allowing residents to donate to a state-created charitable fund instead of paying property taxes. That person would then get to write off the donation as a charitable gift on his or her federal taxes and get a state tax credit for some of that. The regulations killed these programs.

This entry was posted in Economics, New Jersey Real Estate, Politics, Property Taxes. Bookmark the permalink.

33 Responses to IRS closes SALT loophole

  1. leftwing says:

    Frist, with a relevant post below even!

  2. leftwing says:

    From last week’s conversation, this popped up in my CNBC news feed this morning.

    The article is all about the west Coast. I didn’t pop into levels.fyi but if anyone is inclined I would do it soon. My gut tells me the companies are going to work hard to get it down lol.

    https://www.cnbc.com/2019/06/14/how-much-google-facebook-other-tech-giants-pay-software-engineers.html

  3. leftwing says:

    And, grim, never knew you were a regular reader of “Accounting Today”…;)

    And, to all the dads, Happy Fathers Day.

    As someone moving rather slowly from a graduation party last night for his last one in HS if your children are young enjoy them. The years go by quickly. You always have the time to recapture earnings, possessions, personal experiences…you can never recapture their early years with you. Your kids should be hugging you today, make sure you are hugging them back at least as hard.

  4. The Great Pumpkin says:

    Well said, lefty.

    Happy father’s day all!

  5. Bruiser says:

    Leftwing, very eye-opening that article. Companies are usually very tight lipped about salaries, and the workers can be even tighter lipped. We’re also talking about Clownifornia, where median house values are stratospheric. So while $150,000 for an entry level software engineer sounds tempting (even made me say “WTF am I doing with my life?”) until you realize the cost of living is probably more than double what I’m currently experiencing.

    Also with respect to the differences between Cali and NJ, California has laws in place that allow an engineer to easily move to another company. A software engineer can be working at FB on Monday, and then jump on at GOOG the next Monday. That would never fly here in NJ or NY, as the legal protections for workers are not in place. Companies make their employees sign Non-Disclosure agreements – or even worse – Non-Compete Agreements on their 1st day on the job. I can’t jump to a competitor that offers me a job because I signed an NCA 15 years ago; not unless there is a 2 year gap between the end of my employment here and starting date for the competitor. That is so far down the priority list of NJ politicians, it is safe to say it will never be fixed.

  6. 3b says:

    Glad the IRS but a stop to that!

  7. GdBlsU45 says:

    Trump – 14,050,399
    Resistance – 0

  8. GdBlsU45 says:

    Hopefully we get Comey and Brennan in jail next. Two commies who Oblama loved and tasked with politically weaponizing our intelligence agencies. Epitome of Oblama presidency(fail).

  9. The Great Pumpkin says:

    Now combine two incomes and you realize why median price of home there is 1 million.
    Lots of high paying jobs leads to lots of high paying consumers driving up the cost of everything.

    Sad part, there’s no point in the companies moving to avoid these costs. No matter where they set up shop, they will drive up the price in a small amount of time. Look at Seattle for example. Lesson here, if you see any of these companies move to a low cost location…buy up all the real estate you can afford in said location before they drive the price up of everything. You will make a killing.

    Bruiser says:
    June 16, 2019 at 9:47 am
    Leftwing, very eye-opening that article. Companies are usually very tight lipped about salaries, and the workers can be even tighter lipped. We’re also talking about Clownifornia, where median house values are stratospheric. So while $150,000 for an entry level software engineer sounds tempting (even made me say “WTF am I doing with my life?”) until you realize the cost of living is probably more than double what I’m currently experiencing.

  10. The Great Pumpkin says:

    You will lose this war just like the Soviet Union did.

    “The United States has underestimated the Chinese people’s will to fight a trade war and Beijing is prepared for a long economic battle, an influential Chinese Communist Party journal said on Sunday.”

    https://apple.news/AV1ntqbGwTOO8f6bHkbG3pA

  11. Sunday GodBlessU45 says:

    You might be very right that he’ll win again.

    Great article from Atlantic Magazine about the Boomer gerontocracy constipating any movement in the Dem side to what people truly wanthttps:

    http://www.theatlantic.com/ideas/archive/2019/06/there-should-be-age-limit-presidents/591724/

    Why have national Democrats and not national Republicans fallen under the tyranny of the 70-somethings? It seems so contrary to common expectation. Democrats are, as they often remind us, the party of progress and the future. The question seems to rival those enduring, unanswerable mysteries such as “What happens when you die?” and “Why did Mick Taylor quit the Rolling Stones?”

    People in their mid-to-late 70s are thick on the ground nowadays, while in an earlier era, of course, you’d have been more likely to find them under it. This is especially true in the urban centers of the Northeast and mid-Atlantic, according to a recent survey of census data by the Associated Press–NORC Center for Public Affairs Research. In particular, the Washington, D.C., area is a leader in “senior labor force participation,” by which the researchers mean the region is loaded with people who have passed the age of retirement yet somehow neglected to retire.

    Look no further than the Democratic caucus on Capitol Hill. For whatever reason—perhaps they’re more easily bored by government work, or perhaps they’re more eager to cash in on government work—Republicans have less of a 70-something problem. House Republicans are relatively youthful, in chronology if not in disposition: They are led by a trio ages 54, 53, and 52. Indeed, the only 70-something among the GOP leadership on the Hill is the 77-year-old Mitch McConnell (I’m omitting the constitutional office of president pro tempore of the Senate, now occupied by the Republican Chuck Grassley, who is 85 but doesn’t look a day over 86.)

    Going down the ranks, the public-affairs software firm Quorum reckoned that the average age of the Democratic House leadership is 72, fully 24 years more than the average of the Republican House leadership. Infamously, the three leading Democrats in the House are 79, 78, and 79, for a staggering combined age of 236, making the Democratic leadership team older, in aggregate, than the Constitution itself.

    The party’s congressional gerontocracy has now inevitably bled into the field of presidential candidates. The front-runner, Joe Biden, is 76. Second place, according to most polls, belongs to Bernie Sanders, who’s a year older than Biden. They hope to replace the oldest man ever to be elected president. He’s younger than both of them. If either Biden or Sanders gets to the White House and then wins a second term, we will be governed by a man in his early 80s, nearly two decades older than Franklin D. Roosevelt was when, having won his fourth term, he pegged out from overwork. Needless to say, Sanders and Biden are each much spryer than FDR. Imagine Dick Van Dyke from Mary Poppins Returns clicking his heels in the Oval Office.

    To be sure, anyone who criticizes our gerontocracy must insert a “to be sure” paragraph right about now, praising the gumption and resilience of our oldsters, marveling at their energy and their bottomless reservoirs of wisdom. Stipulated! Nancy Pelosi, Steny Hoyer, Biden, and Sanders—and especially the McDonald’s-loving 72-year-old incumbent—are walking testaments to the advances made by geriatric medicine since the 1950s, when they were teenagers. The idea that with length of days comes wisdom is a commonplace of our patrimony, from Aristotle and Job to Shakespeare and Austen. And all the flattering things we are required to say about old age and the people caught up in it do serve as a much-needed counterbalance to our culture’s childish obsession with youth.

    But this traditional picture of old age as the repository of wisdom comes with certain complications. Gerontocracy is rule by people who insist on turning the peak of their career into a plateau. Aristotle and the others acknowledged that it carries hidden and insidious effects, and reveals unflattering qualities in the gerontocrats themselves. We can see this most obviously in the effect it has had on the Democratic Party generationally. There is a huge gap between where the energy and creativity of the party lie, with a group of dynamic activists and House members in their 30s and even their 20s (thank you, Alexandria Ocasio-Cortez), and the ruling class of 70-somethings layered far above like a crumbling porte cochere.

    In the farm system that trains and seasons the leaders of tomorrow—assuming tomorrow ever comes—that gap signifies a lost generation. One day, presumably, power within the party will pass, and when it does, if present trends continue, it will leapfrog from seniors born around the time of V-J Day to people who can barely remember 9/11. More likely than not, members of Generation X will never get their turn—an entire cohort condemned to the fate of Prince Charles. After the indignities that Boomers inflicted on Generation X, from disco to postmodern literary theory, this scarcely seems fair.

  12. Sunday GodBlessU45 but take your Meds and stay off C0k3 says:

    The situation pushes some Gen Xers to take extreme measures. The far-fetched presidential campaigns of backbenchers such as Tim Ryan and Seth Moulton are best understood as cries for help, as ambitious young politicians try to free themselves from the professional bottleneck created by unbudgeable leadership.

    Some 70-somethings are easier to forgive than others. Pelosi and her team are simply aging in place, clinging to a version of the jobs they’ve held for a decade or more; inertia could be as much to blame for their refusal to move along as an unslakable thirst for power and attention. There’s less to forgive in the actions of Biden and Sanders. Three years ago, both were given the chance to leave the field gracefully. But they. Will. Not. Go. Away.

    Sanders, holding political positions virtually identical to those of his rivals, offered a less plausible case for his candidacy than Biden did. Biden’s case, which you could strain to make if you were willing to risk a herniated disk, was ideological: He filled a slot that no one else would fill. He was carrying the pragmatic liberalism of an earlier time into a scrum of leftish contenders who believe that pragmatism is for chumps.

    That case was dashed last week with Biden’s head-snapping reversal of his 40-year support of the Hyde Amendment, which bars the use of federal funds to pay for abortion. Far from serving as an alternative to the radicalism of one segment of his party, Biden showed that he is willing to be its slave—if that’s what it takes to win approval for his dream of apotheosis. Such groveling is unlovely enough in people in the robust prime of life; it is doubly so in old people, who, by virtue of their age and experience, are supposed to know their own mind.

    The only cure for the desire to be president, a wise politician once said, is embalming fluid. Let’s stipulate to that, too. We all need purpose and meaning in life. The trick for old folks is to adjust their search for purpose and meaning as they follow nature’s course and give way to their juniors. The avenues to self-fulfillment that were open to them as younger men and women are now the rightful territory of a newer generation, and dignity requires them to find other paths of service and satisfaction.

    I can easily imagine a host of dignified futures for our 70-something presidential candidates, far from New Hampshire and Iowa. Sanders could work as a tour guide in Nicaragua or a docent on fundraising cruises for The New York Review of Books. Biden, for his part, could take on the once-popular, now-neglected role of “elder statesman,” happy to serve when called to a blue-ribbon panel or as a special envoy to trouble spots here and there, to offer advice when his advice is sought, and otherwise to lead a life of recreation, reading, and contemplation. No one will think less of either of them.

    Instead, they have chosen the way of vanity and self-indulgence, to the detriment of the political cause they say they want to advance. Sanders and Biden have made themselves the equivalent of the old dude cruising the pool at Club Med in his sagging Speedo, capped teeth gleaming, knobby shoulders and fallen pecs bronzed and shiny with tanning oil, gold chains twinkling through the chest hair. I’m not saying one of them won’t succeed in his quest—though I have my doubts about both—but in a saner world, it would be obvious that the quest itself is unseemly. They do no credit to their peers with their refusal to acknowledge their natural and inevitable station in life. And they do no favors to the younger people—from Pete Buttigieg, age 37; to Kamala Harris, age 54; and even to Elizabeth Warren, age 69—who are eager, as they are entitled to be, to take their shot.

  13. Mächïne says:

    12:23 perhaps it is “You” who will capture the title of most retarded poster….?

  14. I all the time emailed this webpage post page to all my associates, since if like to
    read it after that my friends will too.

  15. D-FENS says:

    Phil who? 1 in 3 New Jerseyans can’t name the governor
    https://www.politico.com/states/new-jersey/story/2019/06/17/phil-who-1-in-3-new-jerseyans-cant-name-the-governor-1062987

    One out of every three New Jersey residents can’t name the state’s governor — or think Chris Christie is still at the helm — a new poll from Fairleigh Dickinson University has found.

    According to the survey, 67 percent of all respondents were able to correctly identify Democrat Phil Murphy as the governor. That includes some whom FDU deemed to be close enough, like those who said “Bill Murphy,” or could only answer “Phil” or “Murphy.” There were 33 percent who could not name the governor — including 21 percent who thought Republican Christie was still in charge.

  16. chicagofinance says:

    Ping pong. Ding dong. Bing bong….

  17. The Great Pumpkin says:

    “THE MONOPOLIES OF THE FUTURE WILL BE CHINESE — AND STATE-OWNED”

    “In 2010, there were 49 Chinese companies on the Fortune 500 list, compared to 139 from America. Now, they’re neck and neck. In 2018, China had 120 representatives on the iconic roll call of the world’s highest revenue-earning firms, against 126 from the U.S. Both countries today have three firms among the top 10 — two decades ago, the U.S. had five, China none. Unlike the top American companies — Walmart (ranked No. 1), Exxon Mobil (No. 9) and Berkshire Hathaway (No. 10) — their Chinese peers at the top of the global pecking order aren’t household names in the West: utilities giant State Grid (No. 2) and energy majors Sinopec Group (No. 3) and China National Petroleum (No. 4). But their rapid rise — none of them figured in the world’s top 45 companies just 15 years ago — suggests you’ll likely be hearing a lot more about these firms, all state-owned, in years to come.”

    https://www.ozy.com/fast-forward/the-monopolies-of-the-future-will-be-chinese-and-state-owned/94781

  18. The Great Pumpkin says:

    “Stop Treating Government With Respect
    It’s become nothing but a weapon fought over by people who want to smash each other—and you.”

    https://reason.com/2019/06/15/stop-treating-government-with-respect/

  19. Bystander says:

    Left,

    Salaries starting over $150k? Not at my IB. We just had H1b Software Engineer posting in our kitchen. Pay was about 90k. Company abuse and fraud is not something that want highlighted.

  20. Anthonydok says:

    Hi! We are working with businesses like yours to support them in the creation of excellent websites and mobile apps of any complexity and specification.
    If your CEO / CTO / CIO has plans to launch new digital resources or update existing ones (to iOS 13 for example), Aplana can be a valuable partner and assist in achieving those goals.
    Aplana was featured on the Clutch Rating List of the Top-200 Best Custom Software Developers 2018 in the world (you may google this information).
    Since 1999 we have launched over 1500 small and large IT projects worldwide. We deliver digital projects to US customers through our highly skilled software teams in Eastern Europe.
    This structure allows us to keep the cost for our services reasonable and justified while maintaining a quality of work that is exceptionally high.
    Please contact us if you have any technical RFP ( request@aplana.us ) or visit us at http://aplana.us
    to get more info.
    Please, accept our apology if it currently doesn’t apply to you.

  21. No One says:

    China is very grateful that the US and EU uses antitrust to beat down all of the biggest and best firms of the western world. In contrast, they don’t, because they think bigger firms are better able to compete on the global stage.
    I’m pretty sure they were gleeful when Qualcomm got hit with antritrust accusations, the same company other agencies have been trying to protect from Chinese IP theft. The antitrust agency would be happier if Qualcomm had many strong Chinese competitors, apparently.

  22. chicagofinance says:

    No One….. you ping ping ding dong? bing bong

    No One says:
    June 17, 2019 at 10:39 am

  23. The Great Pumpkin says:

    No one,

    You bring up some good points. Economics on a globalized scale is getting so complicated, we will not find the answer EVER to what really works.

    Just look at this issue. Monopolies are horrible for maintaining competition, hence innovation, on the domestic front, but with competitors on the global front creating state-run monopolies, it seems you have no choice but to support it.

    This stuff makes my head spin trying to find the right path. The more you study it, the more you come upon hyprocritical position after hypocritical position. It really can make you crazy.

  24. The Great Pumpkin says:

    “To everyone who is relieved that he won’t be able to tax millionaires, read where it says “They would raise a single tax — paid by HMOs “. That tax is on us, kids, the HMOs will raise our premiums”. Thanks Guv.”

    “You have to thanks Sweeney for that. Sweeney protects himself and his millionaires’ friends while pushing the HMO premiums to the top. After all, Norcross is his friend.”

    “I agree but if he really had any stones, he’d lower the health care premiums the state pays. Norcross is ripping us off and not one of our representatives question it.”

    https://www.nj.com/politics/2019/06/nj-dems-axe-murphys-taxes-on-millionaires-gun-owners-bear-hunters-opioid-makers-and-more.html

  25. The Great Pumpkin says:

    Norcross and sweeney trying their hardest to put Murphy in the corner. Good job, murphy, these guys are getting desperate. I wonder why?

    “Sweeney said he had not yet spoken with Coughlin but planned to discuss their options with him and legislative leaders to determine what specific course of action to take.

    But Coughlin was not ready to go as far as Sweeney on Friday.

    “The claims made in today’s article are very disturbing. We already know enough to say changes must be made at the Schools Development Authority. I am reserving judgment until I see the results of the authority’s internal investigation,” Coughlin, D-Middlesex, said in a statement.”

  26. 3b says:

    Can anyone recommend a good north Jersey nursery for beach grass?

  27. The Great Pumpkin says:

    D,

    If they can pull this off, while still increasing the nj transit budget, I’m a happy guy. I just want what’s best for the state. They need to focus on infrastructure, especially fixing njtransit. Maybe put in a 5 year millionaire tax to help fix it. Wealthy should kill it under this model in the long term and are the biggest beneficiaries of the investment, so it’s only fitting that they should help pay for the investment.

    “We think we’re giving the governor a good budget,” Senate President Stephen Sweeney, D-Gloucester, said Monday. “The best thing about the budget is that we’re not really adding to the tax burden to the state. Taxpayers of New Jersey are overtaxed, businesses are overtaxed, and we’re sending a balanced budget that hopefully the governor will support.”

  28. GdBlsU45 says:

    Sweeney and co know that Murphy hired alvarez. He’s hiding that which weakens him. It’s the same way the bridge gate weakened Christie. Bridge gate effectively ended Christie as politician.

    Sweeney and co have gone from negotiating aggressively With Murphy to challenging and repudiating him openly. Murphy is finished.

    And is there a more a more intentionally clueless person than Loretta Weinberg? She’s eatched the state go down the shltter right in front of her eyes and appears baffled every time corruption is laid bare. She can effectively pass transgender indocrination legislation for 9 year olds however. That apparently makes her believe in some circles.

  29. Mächïne says:

    3:12 people who work with the homeless freely admit that drugs play a huge role in the “drop out culture” of the homeless. LA has them everywhere except the tony towns.

  30. Mächïne says:

    My new ID is derived from:

    https://en.m.wikipedia.org/wiki/8mm_(film)

Comments are closed.