From Bloomberg:
Trump Tax Reform Hits Home in Wealthy New York Suburbs
Nick Boniakowski’s clients bought a home in Northern New Jersey in 2016. Now they want to move again.
They found a house they liked. It wasn’t the charm of new construction, an upgrade in location, better schools or a swimming pool that attracted them.
It was the lower property taxes.
Like many of Boniakowski’s clients at Redfin Corp.’s Hoboken office, these two are looking at their returns for the first time since President Donald Trump’s tax changes took effect and, despite more than a year of lead time, experienced a mild freakout. Maybe buying a new house –- the rare financial ordeal that’s more maddening than the annual April 15 ritual –- could be the solution.
….
The Tax Cut and Jobs Act promised to, well, cut taxes. For many, it does. But a new limit on the amount of state and local levies that can be deducted has costly and confounding implications for some, especially in high-income-tax, high-property-tax places like the New York City area.
Nearly 11 million taxpayers will be affected by the new cap on so-called SALT deductions on the taxes they file this year, and could lose out on a cumulative $323 billion, according to a February estimate from the U.S. Treasury Inspector General for Tax Administration.
For those people, the April 15 deadline carries a greater sense of dread than usual. New rules include a higher standard deduction and changes to the Alternate Minimum Tax, and it can be hard to say, even for experts, how they’ll affect individuals until they file.
The situation wasn’t made any simpler by state lawmakers, who argued that the cap on the SALT deduction was intended to hurt states that tend to elect Democrats, and concocted a series of elaborate workarounds that were shot down by the Internal Revenue Service.
People with more money and thus more complicated tax returns tend to file later in the season, meaning that the triggering has just begun.
“A lot of my clients are very surprised by what’s happening,” said Ann Callari, tax partner at RotenbergMeril, an accounting firm in Saddle Brook, New Jersey. “That’s the nature of taxes. People hope for the best and don’t pay attention. They don’t notice until it affects them.”
In the meantime, plenty of taxpayers are expecting the worst.
Good morning new jerse
first ….!
Twiddling my thumbs waiting for mine. Just going through the numbers, my guy’s position was on the refund was, “Less, it’s going to be a lot, lot less.”
Will compare the reduction in withholding (lower taxes) versus what I lose in the deductions, which was high.
Need to buy a big as* truck this year, section 179.
I do think you are going to see a massive push towards property tax appeals this year – the article nailed it.
I’m glad I procrastinated moving into a larger house.
“the Palm Beach of Route 17”. Funniest statement I’ve read in a long time.
Will be interesting to see if a tax revolt movement happens in NJ. Timing is perfect.
I’ve been mulling the student debt problem. Here are two “outside the box” ideas:
1. Obama phone plus community college. If we’re giving away free stuff, how about this? Free government supplied smartphone plus two years of community college for 18 year olds who hold a part time job and have graduated high school.
2. Limit the extent of federally guaranteed student loans to the prevailing cost of two years of “all in” state school with books, fees, dorm, and meal plan. After two years of satisfactory course completion, a student can apply for two more years of loans, and that’s it. Wanna go to Skidmore? Great. Let Skidmore or your parents pay the difference or line up financing that can be bankrupted away.
define academic essay http://paperwritingservice.gdn/essay/journal-essay-topics.html essay vato
Maybe since Brigadoon on the Hackensack?
“the Palm Beach of Route 17”. Funniest statement I’ve read in a long time.
Being rich has its advantages, huh? Many ways to avoid taxes in comparison to the middle and poor class. You too can have the same thing, as long as you can afford entrance into the club. Don’t hate the player, hate the game. lol
“Real estate pros, nobody’s first call for tax planning, are stepping into the void. South Florida developers have set up sales offices in Manhattan, angling to lure tax-weary finance workers with the promise of sunshine and no state income tax. Local realtors are highlighting small changes in tax rates that can benefit home buyers who cross town lines.”
“Saddle River, a New Jersey Republican stronghold where Richard Nixon once owned a home, went so far as to hire a public relations firm to pitch the town as the Palm Beach of Route 17 — a local tax haven that keeps levies lower than neighboring municipalities because of a lack of sidewalks, professional firefighters and a public high school.
“You don’t need all of that stuff,” said Mayor Al Kurpis, whose day job is dentist.”
Or… students only pay if they find gainful employment of at least a certain minimum salary.
Then, a portion of their new paycheck goes towards their student debt.
Otherwise, they do not pay.
The Original NJ ExPat says:
March 21, 2019 at 8:12 am
I’ve been mulling the student debt problem. Here are two “outside the box” ideas:
1. Obama phone plus community college. If we’re giving away free stuff, how about this? Free government supplied smartphone plus two years of community college for 18 year olds who hold a part time job and have graduated high school.
2. Limit the extent of federally guaranteed student loans to the prevailing cost of two years of “all in” state school with books, fees, dorm, and meal plan. After two years of satisfactory course completion, a student can apply for two more years of loans, and that’s it. Wanna go to Skidmore? Great. Let Skidmore or your parents pay the difference or line up financing that can be bankrupted away.
Purdue has introduced income sharing
https://www.cnbc.com/2019/02/08/purdue-university-introduces-first-income-sharing-agreement-for-students-.html
Purdue University says it is the first four-year institution in the country to offer an income-sharing agreement, or ISA.
Under Purdue’s Back a Boiler program, graduates make payments for 10 years after graduation.
The percentage graduates pay depends on their major and the amount of funding they receive. The less they make, the less they are required to pay.
ISAs are also attracting attention in vocational schools.
I think that’s the ideal arrangement. It’s good for the school and it’s good for the student.
The school is incentivized to offer majors that result in gainful employment.
hdhqpb Northwood Asset Management Group
http://main.acsevents.org/site/TR/Events/MosaicofHope?pg=fund&fr_id=9910&pxfid=2442372
The Purdue ISA is a step in the right direction, but it still lets the University set prices that our perhaps out of whack with the value of the education. Also, there is nothing restricting the students from having “conventional” college loan debt in addition to the ISA. Back in the mid 1980’s starting salaries exceeded the four year cumulative cost of living, eating, and studying at Rutgers. Kids failed out regularly too. Now no kids fail out. Why would you kick a good customer to the curb whose signature on some papers gets you paid $60K per year?
All of the college bloat is built into the salaries of non-teaching administrators in jobs that never existed 40 years ago. Those people need to learn to code.
this is not good…
NJ Society of CPAs: 70 Percent of New Jersey CPAs Polled Say Governor Murphy’s Proposed Budget Will Make NJ’s Economy Worse
https://www.insidernj.com/press-release/nj-society-cpas-70-percent-new-jersey-cpas-polled-say-governor-murphys-proposed-budget-will-make-njs-economy-worse/
ROSELAND, N.J. – Governor Murphy’s proposed budget will make the state’s economy worse over the long term, according to 70 percent of nearly 500 New Jersey CPAs polled by the New Jersey Society of Certified Public Accountants (NJCPA) earlier this month. More than 38 percent of respondents said the state’s economy would become “significantly worse” and 32 percent said it would become “marginally worse.” Only 12 percent said it would be better and 17 percent said it would “stay the same.”
Of those who responded negatively, most cited Governor Murphy not focusing enough on the amount of spending on public pension benefits in New Jersey in his budget proposal; high property taxes for both residents and businesses in the state; and implementation of the millionaire’s tax.
Meanwhile, those who felt more favorable about the impact of the Governor’s plan pointed to having increased revenues from the highest-income taxpayers as a means to raise necessary state funds; the need to reduce health care costs; and the prospect of tax revenue from the sale of legalized, adult-use marijuana.
The results are similar to a survey the NJCPA conducted last May when nearly 75 percent of the 786 CPAs who responded said that New Jersey’s economy would either get “significantly worse” (44 percent) or “marginally worse” (31 percent) over the long term under Governor Murphy’s proposed budget plan for the state’s 2018/19 fiscal year.
Nearly half of the respondents (47 percent) in the recent poll rated the state’s economy as “fair,” compared with 29 percent who described it as “poor” and 23 percent as “good.”
“Surveys like these show the true mindset of the business community in New Jersey. CPAs, as trusted advisors, are at the forefront of helping businesses grow, innovate and operate more efficiently,” said Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director at NJCPA.
I posted this a few weeks back.
The majority is usually wrong, just saying.
D-FENS says:
March 21, 2019 at 12:17 pm
this is not good…
NJ Society of CPAs: 70 Percent of New Jersey CPAs Polled Say Governor Murphy’s Proposed Budget Will Make NJ’s Economy Worse
You have an answer for everything!!
If there ever was proof of the bias in the press, it’s in the treatment that Murphy continues to receive. If Christie tried to pull 1/10th of the crap Murphy did, he would have been impeached by now.
Pat,
My town is unique in that we have two universities, Fairfield U and Sacred Heart, both D1 basketball. SHU is building like no tomorrow, seriously..it would take too much time to list but they started new upper quad which that looks extravagant. New radio station, student center, rec center, health center..it is endless. They got old GE HQ too which is tech center. All I can think is “who has ever heard of Sacred Heart? And who is paying for all of it”. My guess is that working class minoritites will be passed right through admissions process and sent directly to bursar to sign for 70k year bill. There is no other way here. Anyone with a bit of financial sense would reject this enormous debt from a little known, regional university. Scary..it really feels like Rome before fall in higher ed.
SALT is shaking out weak hands.
A cohort of people across the high tax states was willing to stay in what may have been marginal positions for them as long as the true cost of living there was subsidized on their fed tax return.
Remove the subsidy, and they are out.
No different than any other similar situation…solar panels, electric cars, youth sports, university selection, etc…the committed stick without a subsidy, the others don’t.
Left,
Nope . The weak players are the red states who take our Federal dollars, expect a further tax break funded by producer blue states. All pushed by Orange moron in Chief to hurt his non supporters. What a sad pathetic creep. Mr. Bonespurs won’t leave a heroic dead man alone, I see.
“Mississippi received $2.13 for every tax dollar the state sent to Washington in 2015, according to the Rockefeller study. West Virginia received $2.07, Kentucky got $1.90 and South Carolina got $1.71.
Meanwhile, New Jersey received 74 cents in federal spending for tax every dollar the state sent to Washington. New York received 81 cents, Connecticut received 82 cents and Massachusetts received 83 cents”
Classic NJ Transit:
Commuters were baffled Thursday morning when they found out NJ Transit relies on Dunkin’ employees to open a Mercer County train station. Maybe it’s time for Wawa to be in charge?
https://www.nj.com/traffic/2019/03/doors-wouldnt-open-at-train-station-and-nj-transit-threw-dunkin-under-the-bus.html
Bystander.
Montclair State has more than doubled in size since I attended and I wouldn’t be surprised if the residence hall capacity tripled. There’s gold up in those hills.
I just noticed, wikipedia lists average tuition after financial aid. That’s interesting.
When I was in school, we protested every tuition increase and even took over the administration building. Well, when I say we. It was mostly the poor students who were paying their own way.
Tuition was $40 a credit ($1.5K) with like $3 in fees. Room/board was about 5K. I see today, tuition is 12K and housing 13K. Now I can understand housing costs increasing that much because real estate prices moved at least that much since the 90s in our area. But what the heck is the school doing differently today that it costs eight times more to educate an undergraduate? Obviously, the current students are paying for the massive growth of the colleges. What else could it be?
And people thought the for private DeVrys and Apex Techs were corrupt?
On the bright side, I’ve heard from a number of families that tuition is completely negotiable. Can’t wait for that argument. 4 years to go.
There is only one way nj becomes affordable, and that is by people leaving. Especially the rich.
Seriously, the population is so dense it’s impossible to lower costs. Economics 101. Requires so much money to take care of a larger population.
Look at upper saddle river. How do they keep costs down… by having no services. No sidewalks, no high school, no fire department…
Good luck doing that in dense cities.
Florida is mentally slow. They should not be lowering taxes right now. They are lucky they are able to attract all these wealthy individuals at the moment. That train won’t last. Costs are going to come due for this expansion of their population in 10 years. They better have the money to maintain and expand infrastructure/schools, or they will end up like every other state that was in their position before. Good times don’t last forever, and they better plan for it…..or end up like every other high performing economy that fell into debt. History tell the story over and over again.
Here is your State Debt list
https://www.usgovernmentdebt.us/state_debt_rank
The rabbit hole goes so deep on higher ed corruption. Do you realize that a kid could take a break for one year after HS and get into Columbia via back door, School of General Studies? It for for “non-traditional” students. Same classes, same profs etc. Difference? The giant endowment money is kept separate from GS students. They pay full tuition rate, no aid. They get no priority housing either. 30% of Columbia are GS students. Unreal. Apply at 17 and better have perfect SAT to have a slim shot. Apply at 19 with little academic credentials, pay full cost and welcome aboard.
Bystander,
Those numbers include, for example, Social Security taxes paid and benefits received. If one works in NY/NJ/CT and pays fica and then retires elsewhere, what does this have to do with the states?
Lib, I think I borrowed a total of $5,500 to go to Montclair back then, the rest was paid by working nights a Chile’s.
Commuting of course
Joyce hits upon the secret math. States that are home for retirees or the poor will receive a disproportionate amount of federal funding, especially since 70% of federal outlays are for such programs.
Since folks are free to receive social security and Medicare in whatever state they retire to, and we should probably continue to fund Medicaid for the poor, these return on dollars sent to the Feds statistics are a bit of a red herring.
Does that move the needle on argument significantly? You must think it does. Not trying to be lazy, just I have not read those stats which push facts other way
Bystander, please get the facts and logic correct before drawing conclusions….
STATES do not receive nor send the money quoted in these statistics. INDIVIDUALS do.
Show me the check that the State of NJ wrote to support that analysis and I’ll agree wholeheartedly with you. You can’t, because the checks were written individually by millions of NJ taxpayers.
Point being, any analysis of “which States send/receive more” to the Feds is totally flawed since the States are neither the remitter nor the recipient.
The accurate analysis is of the money flows for each State’s individual residents. And to my point, in most likely a pretty standard distribution, these individuals all have a threshold.
When they can no longer get a tax break for the high cost of housing and taxes imposed by their State’s specific distribution, they peel off according to their own individual criteria and go elsewhere.
As I said same for economic decisions regarding solar panels (sales likely screech to a halt unless subsidized), university scholarships, etc.
Domicile is no different. SALT subsidized high tax state residents’ primary costs of living close enough to par with lower tax states. Remove the subsidy and the cost increases to a level where residents peel off until a new equilibrium is hit.
Yell foolishness all you want, but it is happening in front of eyes.
The reason our taxes are so high here is due to wasteful state government spending. Every which way you look, the corruption is obvious. From the local level right up to the state house. The dense population only serves to make it easier to hide it. It doesn’t help that we duplicate half of these unnecessary positions at the county level and in too many towns. This also makes it easier to double dip, which is way more common than you would expect. Worst of all, our government is so dependent on the union vote that they over pay and over benefit all of these workers too. And the populace supports it. Can’t wait to get the fcuk out.
I don’t buy it. It’s common sense that the high performing economies are going to support the low performing economies.
Medicaid is Medicaid. If they were attracted to a low-cost state for retirement and moved there, they are now supporting that economy with our money. I don’t care that they worked here and then moved. That doesn’t change the fact that a huge amount of federal dollars are now going to those red states. Hence, it’s artificially holding down their costs with fed tax dollars being taken from blue state workers and businesses. That’s a transfer of capital. That’s an investment in those red states at the expense of the blue.
Enough with this nonsense that they are not takers. Just stop spreading this nonsense.
Bystander was correct with his original assessment.
Bystander says:
March 21, 2019 at 2:47 pm
Does that move the needle on argument significantly? You must think it does. Not trying to be lazy, just I have not read those stats which push facts other way
Bs!! They only move to save money AFTER THEY HAVE MADE THEIR MONEY aka retire. Salt has nothing to do with it.
“When they can no longer get a tax break for the high cost of housing and taxes imposed by their State’s specific distribution, they peel off according to their own individual criteria and go elsewhere.”
Lib,
The corruption is almost at the same level. It just becomes easier to find in highly populated area because you have that many more people able to get in on it. Don’t think florida is any less or more corrupt than nj. It’s not. It’s same damn mindset driven by the same human nature.
In smaller populations, it’s so much easier to hide the corruption. You have significantly fewer people getting caught and highlighting the corruption.
“The dense population only serves to make it easier to hide it. It doesn’t help that we duplicate half of these unnecessary positions at the county level and in too many towns”
Lib,
Look at Alaska on this list. They have all that oil and they are still in more debt than nj. Yet, nj is considered the state filled with corruption.
Look at this list, every single state is in almost the exact same debt. Nj is only slightly above the avg. Any questions?
1987 Condo says:
March 21, 2019 at 2:06 pm
Here is your State Debt list
https://www.usgovernmentdebt.us/state_debt_rank
I know mob guys who were in charge of school purchasing.
I’d say more, but I’d be shot down like a long island mob boss.
And based on that list, nj local government is run pretty efficiently. Looks like one of the best. It’s our state debt, created from not paying pensions and instead taking from it, that created our mess. That simple factor. If they only would have contributed to it, it would be solvent. Maybe not 100%, but def over 80%. The pension payments are only in the billions because you are now PAYING BACK ALL THE MONEY WE TOOK from them.
It’s like not paying for your mortgage for 20 years, and then making up for all those missed payments in a 10 year period.
BMY/CELG spread now above $40….
Ex, going to have to figure out whether I want to hold newco LT, or if I just take my gains and cash out when the spread nears the $50 offer, likely on the back of the shareholder votes next month….Any view on the CVR? Hate to hinge my decision on that but….
Just like Trump worked with the mob to get Trump Tower built in 1982. He was the only guy getting cement in nyc during that project. So tell me what’s the difference between public and private. Both corrupt. I only learned of that with Trump by watching that 6-hour biography of him on A&E. Yes, our sitting president worked with the mob while in the private sector. So what the hell is the difference?
grim says:
March 21, 2019 at 3:28 pm
I know mob guys who were in charge of school purchasing.
I’d say more, but I’d be shot down like a long island mob boss.
https://www.pewtrusts.org/en/research-and-analysis/data-visualizations/2017/where-states-get-their-money
https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/03/federal-spending-in-the-states-2005-to-2014
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Left,
Your point seems to be that high cost blue states are being rightly punished for their spending by Trumps ‘fair for all Americans’ SALT cap. I am not defending NY, NJ or CT as they are bloated and corrupt. Why did he choose 10k as limit? He had to know that was hitting middle class blue hard. Most upper class, rich have over 20k in taxes on big homes. He went down to hurt people, period. Don’t give me caring about deficits. That barge sailed away long ago. Also, we have a system of lending at Federal level that allows certain ‘high cost areas’ to borrow more tax payer money to buy a home in that area. Did that change with SALT deduction? If not, why? You can’t have a Federal system accommodating the high cost areas (even pushing it further) then say, sorry your area is expensive to live in compared to rest of America so kiss subsidy goodbye. It is BS politics at work. Housing can’t get grossly expensive while taxes stay low especially in large dense states.
I think Lib is on to something. If you gave NJ or NY more federal aid, I do not think it would change our taxes much, it would be “absorbed” into the mire. Left is also onto something as much of the payments are to individuals.
In 1976 the state of NJ enacted an income tax to solve the heavy burden of property tax on the suburbs.
Yes, before “no child left behind” mandates. The biggest factor, nj was a farm state in 1976. Nowhere near as densely populated as it has become.
Density = high costs. You serving a massive population per sq mile in that market. The cost of everything goes up.
“In 1976 the state of NJ enacted an income tax to solve the heavy burden of property tax on the suburbs.”
Payments to individuals…exactly. It’s going in one pocket, taking it out, and putting it another. A redistribution from blue states that produce, to red states that take. Retirees don’t produce, they take..
Why is this obligation put on the backs of blue states? We don’t get the benefit of the money spent. It’s spent in red states. Is it our fault that retirement communities are cheaper to live than places where you can actualky make money?
So agains why was the cost of his tax plan put on us? Give me one got damn good reason?
Joyce, good data on the second link.
The first link was not useful to me, could not find methodology. Glancing at the chart it appears to lump in federal transfer payments to individuals (SSN, Medicare, Medicaid).
Again, that is an invalid measure of what ‘States’ receive as those benefits go to individuals and would follow those individuals regardless of domicile. With some state by state difference (enacted by the state) for medicaid.
The second link is more useful as it breaks down federal transfer payments. My point is that the first two bars are not ‘State’ revenue (Medicare, etc). The last three bars may be construed to be so, discretionary transfer payments from the feds to the States.
Absent a couple anomalies those range from about 5%-10% of GDP for each State. Hardly the rape and pillaging the data distorters are bemoaning.
Seriously, I don’t understand how you ignore this. Where is the money being taken from and where is it being spent? How can you ignore this and write it off as nothing. You know what would happen to those states without this injection of spending from the blue states. Some people take a lot more from Medicaid than they put in. Remember that.
All this talk about pot legalization, and they can’t pass it?
Give me a break.
And the second link Joyce posted is telling. Look at jersey way at the bottom. Don’t get nowhere near the same compensation from grants or wages from the federal govt like the states at the top.
Keep telling yourself the producers are taking. You are nuts.
The irony in that you believe in randian theory, then totally blow off the producers of this country for the simple fact that they are blue states and not red. The red force is strong with you.
grim,
The friends of the politicos do have all their ducks in a row yet.
What did the half-white coke-snorting moron in Chief do? Maybe take close to a trillion dollars of tax payer money to pay off his supporters then sic the IRS on his non-supporters?
Elections have consequences. Who said that? Remind me.
All pushed by Orange moron in Chief to hurt his non supporters.
Ouch…
From insiderNJ:
Unemployment Rate Holds at 4.0 Percent in February
Following four consecutive months of gains, New Jersey employment declined slightly in February while the state’s unemployment rate was unchanged at 4.0 percent, according to estimates released by the U.S. Bureau of Labor Statistics.
Total nonfarm wage and salary employment decreased by 7,700 in February to reach a seasonally adjusted level of 4,183,600. The decline was concentrated in the private sector (-9,300) of the state’s economy.
The SALT deduction limit is just getting the rich to start paying their fair share, just in case you are unfamiliar who the rich are that the Democrats want to shake down.
New IRS stats out this afternoon.
Refunds go negative again… -0.1% decline vs last year.
https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-march-15-2019
“Some people take a lot more from Medicaid than they put in. Remember that.”
“Look at jersey way at the bottom. Don’t get nowhere near the same compensation from grants or wages from the federal govt like the states at the top.”
“Keep telling yourself the producers are taking. You are nuts.”
Wow, so much stupidity in so little space….
Dumbass….
I never said the producers were taking. The producers GIVE. That’s the way federal transfer payments (taxes) work. Can’t take money from those who don’t have it.
Yes, Medicaid recipients take more than they put in. Because they’re poor, they take. That’s the way federal transfer payments (taxes) work. Can’t take money from those who don’t have it.
If a state has young, wealthy residents then those people pay more in fed taxes. If a state is old and poor, then those people receive more in fed benefits.
Got it?
SALT reductions may lead to less increase in property taxes. That is s good thing.
Dumbass (v2.0)
You understand that it is better to be low on the fed transfer payment recipient list? That generally means that you live in an area that is prosperous and young? You literally want a large difference because that means your residents are paying more in fed taxes (they’re wealthy) than what they are receiving in benefits (not poor or old).
Stated differently, if instead you want NJ to be at the top of Joyce’s charts then do the following:
Pay less to the Feds:
Chase all the rich people out.
Get more from the Feds:
Increase the elderly population (more Medicare and SSN)
Increase the poor population (more Medicaid)
Increase the number of families in poverty (more CHIPs, WIC, etc)
Eminent domain the shore for a National Park (more Federal maintenance spend and employment)
Turn the Pine Barrens into nuclear waste storage facility (more grants and Fed employment, see NM on the charts)
Happy? You too can be number one on the chart by making the State’s residents predominantly poor and old, and by turning major attractions and resources over to the Feds.
Sh1tty life, you’ve just become MS and handed your natural resources to the Feds, but WTF, we’ll be number one!
Dolt.
“SALT reductions may lead to less increase in property taxes. That is s good thing.”
I’ll believe it when I see it. The only you will slow property taxes is to put a 0% cap on it.
Better to beg than to steal, but better to work than to beg..