Eliminating The Property Tax Deduction...........

Also eliminating AMT and presumably lowering brackets.

Does Trump's proposal include eliminating the property tax deduction or just state and local income taxes? That was unclear to me.

Who gets hurt the most by the elimination of these deductions?

It would be interesting to see if Congressional Republicans come up with their own plan.

local taxes include real estate taxes. Big hit for middle income folks IMO

It is just a proposal. In the end, it is likely that the deductions will be reduced by say 10-20 percent as is already the case for very high income above $1mm but some of that will be offset by elimination of AMT and reduction in tax rate. Essentially if you are in blue state you will not benefit from proposal to reduce taxes and high income folks will pay more.

I agree with 300 that it is likely that deductions will simply be watered down a little more. For states like CA and NY that have high income tax rates, those with higher income will see their deductions reduced and in theory pay higher taxes. However, I think we need to wait for more information on Trump's proposal before we deduce that the rich will see their overall tax bill go up. Something tells me that is unlikely.

Eliminating the state income tax deduction, in place for 100 years, would impose irreversible pain on "rich" people in high tax states. Dropping the top federal rate a few points does not remotely make up the difference, and the state tax deduction will never be reintroduced later when political winds change and the top rate is pushed up again. Someone earning $2MM/yr pays about $225K/yr in NYS/NYC taxes. Current federal taxes would be $675K, ignoring any property taxes. Even if the proposed 35% top bracket stuck -- and it won't -- and ignoring any property tax deduction, federal taxes with no state tax deduction increase to $700K. At 37%, it is $740K. Add in more than $50K FICA, and total taxes well surpass 50%.

In any event, the property tax deduction is never going anywhere. The formula for suburban living and funding school districts could not survive. A not wealthy family earning $200K a year on Long Island or in Westchester likely pays double in property taxes what it pays in state income tax. Yanking that $20K property tax deduction would be devastating. Even if the taxpayer broke-even with a lower tax bracket, that is not they way it will appear at the next school budget meeting, or four years from now when rates are raised.

So not being able to deduct property taxes, state, local or city income taxes is going to be majorly no bueno for the W-2 wage earners in places in NYC.

Can we please rein in spending in New York? Otherwise people are going to start feeling the real pain of high local taxes and start leaving, just like the 70's!

For many new yorkers, the repeal of AMT is no help because when taking away the state & local tax deduction they are no longer in the AMT zone.

Many people can't exempt state and property taxes due to AMT. Losing these exemptions won't change their tax bill.
The tax bracket changes are meaningless without the associated income thresholds.

How about New York City takes it easy with the new socialist initiatives? Free Pre-K for all? What's next, free nannys that come to your home?

If your making 2mm, assuming your not living on the edge, losing state /city deductions wont really impact your life in NYC.

What about for people making 1mm in 2 kids in private school and $3mm condo with 5k in maintenance and cc? You must know that this type of jobs do not last for ever like a doctor or teacher. Is it ever too much taxes?

And the same for people making 500k who are already paying 200k federal /local/ social security and Medicare taxes?

I dont think Trump will get this, but if he did, it would finally be a reason for Albany to stop spending like a drunk sailor. Personally, I hope it goes thru, the taxes in NYC/ NYS are insane.

They indeed are insane but eliminating deductions from federal taxes will not change it.

DeBlasio's $85 billion budget is almost 20% higher than before he took office. That money has to come from somewhere. Over 25% over the city's revenue comes from RE Taxes, and an equal amount comes from NY State and federal grants (which may at least in part go away). Prepare for even more increases.

That's actually really worrisome. The good thing is US states are forced to balance their budgets, or else. The federal government, on the other hand can just continue to print money...

Well, the details are in on an agreed plan and things are not looking pretty for NYC. Wondering if this will start filtering into the market and, if so, how long before everyone realizes what has happened.

I don't understand how the $10k property/sales/local taxes can be used? If you use standard deduction wouldn't that prevent you from using the $10k deduction? Or is the 10k on top of the new standard deduction? I can't seem to find any info on this.

My understanding is that you can either use either the standard deduction or itemize as always. If you itemize though, you can only use up to $10k in total SALT/Property tax deductions. This is going to hit a lot of people's wallets pretty badly, I think.

Does this mean if you own 2 properties in different states, can you deduct $10,000 per property?

That was my thought as well so I don't understand why they are making a big deal on $10k deduction if few will actually use it relative to the $24k std deduction.

In addition to SALT, there is charitable deduction and I believe Mortgage deduction if you itemize.

https://www.irs.gov/pub/irs-pdf/f1040sa.pdf

For single filers, the std deduction is $12k, so a single, above average income homeowner in NYC can easily get to itemizing. Even for married filers, you'd itemize as long as your mortgage is above 350k assuming a 4% rate (14k mtg deduction + 10k SALT/RE tax)

Just a big f u to the blue states...

It's a big F U actually, as usual, to the poor sods who are earning "high" W-2 wage income in the blue states. They're called HINRYs - High Income Not Rich Yet.

These poor W-2 working sods getting smacked every time by whatever taxes are implemented. They're too busy working to fight back, and have enough income to tax. It's truly sad.

I actually think this plan may help NYC. The taxes are ridiculous - the insane mansion tax, the taxes on small condos being as high as a townhouse, its just backwards with no rhyme or reason. On top of the ridiculous amounts of city taxes that high earners pay just to afford their crappy 1 BR coops, its really too much. This may cause people to wake up and demand that the city (BILL DE BLASIO) take a look at their own Tax Reform. MTA... please don't get me started. As a business owner i pay subsidies for a broken transit system that neither me or my employees use - the city should privatize this garbage and get the MTA back in line!

Lowering taxes will not fix a broken transit system. let's face it, NYC taxes are only going up!