Joe Biden, the SALT Cap and Virginia’s Hidden Taxes

by DJ Rippert

SALT of the Earth. The Trump Administration pushed through a change to the US tax code which capped the deduction for State And Local Taxes (SALT) at $10,000 per year. Previously there had been no cap. The imposition of the cap effectively increased the federal taxes paid by high-income earners, especially in high tax states / localities. Given that many high-income, high-tax areas in the U.S .are solidly Democratic, this loophole reduction rankled Democrats in the Congress. Those Democrats have made several unsuccessful attempts to repeal the cap.

Democrats are likely to win the presidency in the upcoming election and may take control of the U.S. Senate as well. If that happens, it is likely that they will make good on their prior efforts to remove the SALT cap. In Virginia, Democrats control the House of Delegates, the Senate and the Governor’s mansion. They have used that control to raise state taxes including the passage of a number of hidden taxes that have been implemented through regulation. If Joe Biden is elected, will the hidden taxes imposed by Virginia’s Democrats put the state’s residents at a disadvantage since they won’t be deductible when the SALT cap is lifted?

Biden’s taxes. Joe Biden spends a lot of time on the campaign trail talking about how he won’t raise taxes on people making less that $400,000 per year. He seems to consider that level of income to be a point of demarcation between middle-class and high-income Americans. In order to drive the point home Biden claimed that he personally never made more than $400,000 a year during a speech in Detroit. That was a lie. Biden’s claim that he will raise taxes on those making over $400,000 per year may be true. However, he has never claimed that all of his tax changes will raise taxes on the wealthy. There is ample evidence that the Democrats want to rescind Trump’s SALT tax cap which would clearly lower taxes on the wealthy. Biden’s own tax returns are illustrative. As The Motley Fool reports, “In 2018, Democratic presidential nominee Joe Biden and his wife took a $10,000 deduction for state and local taxes on their federal tax return (the most recent tax return available for review).”  “If the law hadn’t changed and no $10,000 limit had been imposed, the Bidens would have been able to deduct the entire $361,966 they paid in state and local taxes in 2018. Effectively, the SALT cap reduced the Biden’s tax deductions by nearly $352,000.”

Will the Dems revoke the cap? Given the level of rhetoric Democrats have put forth on Trump’s “tax cuts for the rich” one might assume that they would be loath to rescind a law passed during the Trump Administration that raised taxes on the rich. Making that assumption would be a mistake. The Democrat- controlled House of Representatives proposed a provision in the Coronavirus relief bill (the HEROES Act) that would have repealed the cap for 2020 and 2021. That bill is unlikely to pass the Republican-controlled Senate. In 2019 the House tried to remove the cap. That bill was killed by the Republican controlled Senate. Chuck Schumer has been emphatic saying in July that if he becomes the the majority leader of the Senate the SALT cap will be “dead, gone and buried.” In the case of the SALT cap, tax breaks for the rich are very much on the Democratic agenda.

Who pays more taxes because of the SALT cap? As can be seen above, Joe and Jill Biden paid a lot more in federal taxes with the deduction cap of $10,000 rather than being able to deduct the full $361,966 they actually paid in state and local taxes. The Center on Budget and Policy Priorities (CBPP) analyzed the impact of the Democrat’s attempt to revoke the SALT cap for 2020 and 2021 as part of the HEROES Act. The CBPP writes, “The top 1 percent of households would receive 56 percent of the benefit of repeal, and the top 5 percent of households would receive over 80 percent of the benefit, while the bottom 80 percent of households would receive just 4 percent …” And before one of the aged liberals on this blog tries to shoot the messenger, Wikipedia notes that “The Center on Budget and Policy Priorities (CBPP) is a progressive American think tank…”.

You can’t deduct hidden taxes. Once upon a time Virginia was a low-tax state. That status was lost through a succession of free-spending governors. From Bob McDonnell’s transportation taxes to Ralph Northam’s attempts to put out the fires of injustice by smothering the flames with stacks of tax dollars, taxes have been rising in The Old Dominion. While the tax hikes have been bipartisan, the methods of taxing have become far stealthier under the Northam Administration. There were always the sky-high road tolls in Northern Virginia for the “privilege” of driving on what would be free roads elsewhere in the state. The wholesale gasoline taxes that are paid by the consumer but not recognized as an individual tax. The assessing of higher-than-necessary tuitions on some college students so that tuition subsidies can be offered to other students. These are all taxes disguised as something else. Northam has added a wealth transfer tax accomplished through regulation of the state’s electricity monopolies, debt forgiveness accomplished by spending refund money that should have been returned to those overcharged and “free” financing of delinquent rents through the suspension of eviction laws and the requirement for landlords to establish payment plans for renters. I’m sure there are more. All of these measures have been helpful to the fiscal sleight-of-hand artists in the General Assembly who love to raise taxes but hate to be seen doing so. Unfortunately, invisible taxes can’t be recoded as deductions on federal tax returns.

Honesty and tax reform. If Biden and the Democrats win and repeal the SALT cap, the federal government will be offering a subsidy for the transparent taxation of  relatively high-income Virginians. The effective tax rate for high- income earners in Virginia has been estimated at 7% (vs 9.2% for middle 20% earners). At 7% in state and local taxes it takes an income of $142,857 to reach the SALT cap limit of $10,000. Of course, that’s true only if the entire 7% paid is in the form of deductible state and local taxes. After that income level, deductible state income taxes and local property taxes are subsidized by the federal government. As a side note, the median household income in Loudoun County in 2018 was $139,915. Almost half the families living in Loudoun are at an income level where the SALT cap could matter.

In order to maximize the benefits associated with lifting the SALT cap Virginia’s Democrat-controlled legislature and Governor would have to end the rampant dishonesty and opaqueness in revenue collection present in existing code and move to a simpler, cleaner, more graduated income tax structure. Localities would have to focus on revenue generation through transparent deductible taxes.

Side note: This is an important issue. The facts I have presented are, to the best of my knowledge, accurate. However, I am not an accountant and definitely not a tax accountant. If there are factual errors in this article please note them in the comments and I will make any changes I deem appropriate.

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50 responses to “Joe Biden, the SALT Cap and Virginia’s Hidden Taxes

  1. James Wyatt Whitehead V

    Joe Biden would never tell a lie. Just ask Corn Pop. Thanks for posting. I have a better understanding of the Salt Cap. Glad I married an accountant.

    • You’re welcome. I think I got it right but there are still some questions in my mind. For example, if I could somehow document the various gasoline taxes I pay in Virginia could I deduct them?

      One other point of note – I have frequently noted that Fidel Castro dies with a net worth of over $900M – stashed in various offshore accounts. It seems that “Joe from Scranton” had no trouble gassing up his income immediately after leaving office. Meanwhile, Barack Obama just bought his third mega-mansion – this one in Hawaii replete with environmental damage expected from his planned renovations. Silicon Valley is littered with former Obama Administration staffers who barely know how to use a cell phone let alone write code. There’s plenty of money in the new American model of socialism as long as you’re either an elite or a useful idiot. The other 97%, the sheep, are there solely for the fleecing.

  2. Why are we calling them “aged liberals” instead of “baby boomers”?

    • They like the term “old white men” for people they disagree with and I prefer the term “aged liberals” for those I disagree with. Besides, I’m a baby boomer but not much of a liberal.

  3. “For taxable years beginning on or after January 1, 2019, taxpayers may claim a deduction for the actual amount of real and personal property taxes imposed by Virginia or any other taxing jurisdiction not otherwise deducted solely on account of the $10,000 annual limitation on the federal deduction for state and local taxes paid.”

    So the full SALT deduction is still available in VA on state returns, IF you choose to take itemized deductions at the federal level, too. Fewer do now. Should the deduction be restored at the federal level, then of course huge numbers of taxpayers will switch back to itemizing. That would reduce the boodle that the Richmond politicos have to play with.

    Just listened to Secretary Layne’s financial presentation on state revenue, a bit of an embarrassment of riches. He never said and will not admit it, but this is the predicted (by me) “conformity tax increase” made manifest. Virginia personal income taxes and business income taxes are burgeoning because the General Assembly “conformed” on the rules but made no adjustment in the state’s tax rates.

    Yes, restoring the full amount of deduction for SALT at the federal level would be a major tax cut for the upper middle and rich, unless Biden breaks his other promise and extends higher rates to the middle class, and not just the rich. That is what I actually expect….higher taxes for all above about $100K…

    • I forgot the sleight of hand around conformity. Thanks.

      As for increased taxes above $100k – that sounds about right. America’s budding socialist politicians are lying about how much money their various plans will cost and where they will get the money. As multi-millionaire socialist Bernie Sanders knows full well – Scandinavian countries tax almost everybody heavily, including the middle class.

      The big hope in Virginia is that after almost a year of seeing and hearing the incoherent ramblings of doddering President Biden Virginians will know that the fix was in from the Democrats and will take umbrage at being conned. 2021 could be an opportunity for Republicans in Virginia but are they ready?

  4. There are no states that have no real estate tax. However, here are ten with the lowest rates:
    https://www.mashvisor.com/blog/states-with-no-property-tax-2020/

    • Interesting. Thanks for posting. Good to see that Hawaii and DC have among the lowest real estate tax. I’d hate to think that centimillionaire Barack Obama was paying his fair share on the mansions he owns in those two jurisdictions.

  5. How can this be? I see Slow Joe’s campaign commercials discussing how he’s going to charge rich people (i.e., people with more than $400 K in annual income – probably really joint income for couples filing jointly) more in federal income taxes. He doesn’t talk about repealing the SALT deduction limit. If he meant this, wouldn’t the MSM hold him accountable?

    Bonus points, what’s the difference in terms of honest, full and complete reporting between writers for the former Soviet Union’s Pravda and today’s Washington Post?

    • Nobody is going to hold Biden accountable for anything from the time he is inaugurated until the day, within two years of inauguration, that he steps down through resignation or invocation of the 25th amendment. He will not be held accountable for reneging on our treaty with Taiwan when the Communist Chinese see a doddering old man and decide to invade. He will not be held accountable when the Russians take more of he and Hunter’s old stomping ground in Ukraine. He will not be held accountable for Edrogan’s misadventures in the Middle East. When you look into his vacant eyes you see only the shell of a man who cannot execute his duties as President of the United States.

      The fix is in. One he steps down all of the fiascoes – from Taiwan to lifting the SALT cap – will be shrugged off as the failings of “Poor Old Joe”. Liberals will declare any criticism of Biden to be ageist and mean-spirited. The man who they are running to hold the nuclear launch codes will become the guy who deserves nothing but sympathy for his continually declining mental state.

      Then will come Harris and we will all wish Biden was still there.

      • You seem to be pretty certain that Trump will lose and the Senate will turn. I wish I could be so optimistic!

        Biden and perhaps Harris will be a place-holder, a bridge…. and
        it’s possible people will gravitate back to a Trump type leader like Jordon from Ohio or Lee from Utah!

        who knows!

        but I would not write Trump off just yet and I don’t think the Senate is a gimme by any stretch.

      • I agree with everything you wrote except that I think they are going to do their best to keep Biden in office for a little more than two years. If Harris takes over and serves less than half his term she will be eligible to run for re-election twice. If Biden lasts less then two years she will only be able to run once.

        A few days in January 2023 could make the difference between Harris potentially being president for just under 10 years or a little more than 6.

  6. I don’t think tolls and tuition count as “taxes”.

    At the state level – there are three or four basic ways to pay the bills.
    Income tax, sales tax, property tax, gasoline tax.

    There are states with no income tax. There are states with no sales tax. There are actually states with no income or sales tax but no states that have no income, sales or property taxes.

    What I’d be interested in is how we’d cut the deficit from 3 trillion back to some reasonable number. We can’t be financing tax-cuts at the Federal level by borrowing money.

    • That map is sorta old.

    • Tolls and tuition don’t count as taxes. However, tolls could be replaced with taxes that do count as taxes and in-state tuition could be lowered by funding more of our college and universities’ operating costs with income taxes. In addition the over-charging of middle and upper class students to generate a surplus for use in subsidizing the adult children of poor parents should end. Those subsidies should be financed through taxes which are deductible on federal returns.

      I have no idea how we will reduce the federal deficit by removing the SALT cap (i.e. cutting taxes). You should address that question to Nancy Pelosi and Chuck Schumer since both have tried to remove the SALT cap.

      Regarding how Virginia raises money – if we’re going to tax relatively high earners then we should use taxes that are deductible on federal returns. For example, raising money by over-charging tuition on middle, upper middle and upper class Virginians so that subsidies can be paid to the adult children of less affluent Virginia parents is opaque and frankly stupid. A higher state income tax rate for Virginians making $150,000+ instead of hidden fees and regulatory transfer payments would allow those new taxes to be deducted on federal returns. Of course, Coonman the con-man and his ilk would have to “come clean” about how they have been secretly taxing Virginians and would have to admit that they are now raising taxes in a transparent and deductible manner.

      i won’t hold my breath for honesty from Virginia’s Democrats even if the Feds are effectively subsidizing almost 40% of the honestly levied taxes vs 0% of the hidden taxes masquerading as something else.

      • See this is where someone you call a liberal disagrees with you. Tolls are the best user fees. Taxes make others pay that don’t use that road.

        Not only that, congestion tolls work just like arilines do. Supply and demand. Self-proclaimed conservatives should LIKE that! 😉

        And the humongo deficit – 3 trillion dollars is caused in part because the Trump tax cuts did not pay for themselves and we’re borrowing money to pay them. What kind of “fiscal conservative” sense does that make?

        The way we should tax ourselves is with a progressive tax system where people who make more – will pay more – proportionately. That’s how our tax system was created and operated for a long time until we started cooking up all sorts of way for the high earner to avoid paying their fair share, like Trump paying $750.

        re: “hidden” taxes. I dunno. I see two sides to it. We started going down that path on gas taxes back when McDonnel was gov the the GOP owned the general assembly. You gonna call the GOP dishonest also?

        • “Not only that, congestion tolls work just like (sic) arilines do. Supply and demand. Self-proclaimed conservatives should LIKE that!”

          That’s not how they operate. Congestions tolls increase to deter people from choosing that path and to keep traffic moving.

          Progressive Tax Systems aren’t proportional tax systems.

          Yes, the GOP is dishonest too.

        • Tolls would be great user fees if all roads were tolled. But all roads are not tolled. In fact, very few roads are tolled. On the vast majority of Virginia roads the only link between usage and cost is the gas tax.

          Tolls on the very few roads with tolls are nothing more than surcharges over the gas tax for the small minority of Virginians who happen to live in areas the Imperial Clown Show in Richmond has decided to tax with a non-deductible tax.

          • Perhaps. But the way it is now, high dollar infrasructure is tolled. Bridges, tunnels, through-ways and high dollar urban highway infrastructure – in no small part because with that kind of infrastructure – the actual users should pay not others who don’t use it.

            Congestion pricing is how to deal with congestion in urban areas where there simply is no more land available for roads. You put a price on it and some people will time-shift just like folks do with airlines. That helps relieve congestion by shifting some of it to less busy times. It also squeezes out trips that are not necessary by letting people make that decision, i.e. is this trip right now worth it to me?

            Again – when they toll, they also provide free lanes AND you can use the toll lanes for free if you’re willing/able to carpool.

            You do have choices.

        • Yes, the GOP in Virginia is dishonest too. Their con game was to shovel money from urban and suburban Virginia to rural and small town Virginia to buy votes in Mayberry. Demographics caught up with them and they are now out of power. Hence, my lack of interest in what the GOP might or might not do.

        • My words – “In order to maximize the benefits associated with lifting the SALT cap Virginia’s Democrat-controlled legislature and Governor would have to end the rampant dishonesty and opaqueness in revenue collection present in existing code and move to a simpler, cleaner, more graduated income tax structure. ”

          Your words – “The way we should tax ourselves is with a progressive tax system where people who make more – will pay more – proportionately.”

          Not sure I see much difference.

  7. Congestion tolls work the same way that airline pricing does. At the busiest times, the costs are higher. This causes some people with higher flexibility to alter their travel time. Unlike the airlines – there “free” lanes – that are more congested and youcan travel free in the toll lanes with HOV.

    The price of the tolls varies acording to demand – just like airline pricing does.

    The second purpose of congestion tolling is to “shape” the demand so that even at high demand periods -the toll lanes still deliver a predictable trip – for a price – which can actually save money for those where time is actually money – like a delivery service or an ambulance.

    • All airlines on all routes match supply and demand via price. In Virginia, only a tiny fraction of a percentage of traffic is congestion tolled. They are not comparable and never will be comparable until congestion tolling is used on all Virginia highways.

      • Congestion tolling is used, at least in Northern Virginia, by private companies who put up most of the money for the construction of the HOT lands in a bet that there will be enough traffic to pay the debt service and make them a profit. There is not enough traffic in other parts of the state, except for parts of Hampton Roads, to entice private companies to put up the money. (By the way, those of us in the Richmond area paid tolls to use the Richmond-Petersburg Turnpike, later I-95, for years. Those living on the Southside have to pay a toll to use one of the main means to get across the river into downtown; however, there are toll-free ways to cross, which may take longer. )

        If the state were to put up the money for the HOT lanes, you and others would be howling about the increase in gas taxes or income taxes needed to pay for them.

        • Need to differentiate between HOT tolls and regular tolling.

          Regular tolling – pays for the road – initial construction plus maintenance and operations – consider the CBBT or the Chesapeake Express way or the 301 bridge of the Potomac or the West Virginia Turnpike and the dozens of other bridge, tunnel, through-ways throughout the country and especially in the North East.

          HOT lanes, congestion tolling is different. It not only pays for the infrastructure but it’s used to manage congestion levels in places where more roads are either not possible or damn near impossible.

          I favor tolling. I think it is a much more fair and direct way of all of us paying for what we use. Generalized taxes that everyone pays ends up breaking that nexus and introduces politics into the process of deciding which roads go where.

          That’s been solved with Smart Scale by the way but that really brings to the fore – whether a given road is “worth” pure tax funding or it needs to be tolled to be justified.

          All projects in Smart Scale are evaluated on a cost-effective basis and many urban type projects no longer qualify if they primarily move SOVs at rush hour.

          • Yes, yes there is. Hot Lanes are variable and that prices changes to keep traffic following at the prescribed rate. If it’s high, it means it’s congested and they don’t want you to take it, regular toll roads are a flat rate.

            That flat rate is covers the DBOM project.

          • There are actually other tolling types beyond flat tolls and HOT, called Express where the toll varies by time window.

            HOT lanes are most often built in already-congested Urban areas where adding lanes requires using the median and/or buying additional right of way but more than that – tearing down and rebuilding overpasses and interchanges to add lanes under and adding bridges and overpasses over other existing roads.

            The HOT lanes in NoVa cost more than a billion dollars – something the State could not afford with current state-wide gas taxes and that drove them to PPP tolling while retaining free lanes and allowing free HOV on the toll lanes.

            HOT lanes are going into more and more urban areas – despite their unpopularity.

          • Larry,

            In Virginia Hot Lanes are Express Lanes. Prior to being rebadged express one could take I-95 HOV lanes without being HOV for free depending on the time of day.

            I-66 Inside the Beltway, I-95 Express, I-395 Express and I-495 Express are variable toll lanes. They are in fact HOT Lanes, as HOT stands for High-occupancy toll lane, meaning if you meet the occupancy requirements you don’t pay a toll. If you don’t, you pay the variable toll which slides depending on congestion and target traffic speed.

          • Yes, Transurban also calls them “express lanes” so to clarify.

            HOT lanes tolls are set according to congestion levels.

            Time-of-day tolls vary according to the time-of-day “windows”.

            HOT lanes still allow HOV but not hybrids.

            The basic idea is to manage the congestion with pricing and by incentizing HOV in part because there is no more avilable non-expensive right-of-way for new added lanes.

            Re-working a single interchange to add lanes can easily cost 100 million and more.

          • Larry,

            That is incorrect. The only road I listed that tolls are determined by time and direction is I-66 inside the beltway. I lived in Fairfax and then Chantilly for 5 years. I might know a tiny bit more about those “tolls” than say yourself.

            The windows for I-66 changed when it went toll, it was previously HOV.

            There is no longer Hybrid exception no longer exists in NOVA, that prevision expired.

            They are currently making I-66 inside the beltway 3 lanes.

            When was the last time you were in NOVA?

          • Speaking of various tolling types – nationwide… just detailing the different types.

            I have a transponder in the car and use it in NoVa and in other states also.

            The basic premise with hybrids has changed. It used to be that if you drove a less polluting vehicle it contributed to better air quality. That has changed and now the DOTs are more concerned with congestion getting worse and worse and gridlocking urban roads where there are fewer and fewer opportunities to add lanes or new roads.

            Road tolling is not going away. It’s expanding and in urban areas it’s variable price tolling as a tool to manage congestion. The money collected pays for the infrastructure, is profit for the company and any excess goes to TDM – Transportation Demand Management.

          • Topic is Virginia, Larry.

            Congrats, you bought your transponder at Giant.

            Go to PA and buy one at Get Go. You get to pay PA a fee of 5 dollars a month to own it and it does the same thing.

            Again, the hybrid exception no longer exists regarding I-66 (what you were talking about). As a matter of fact it doesn’t exist anywhere anymore.

            https://www.virginiadot.org/travel/hov-rulesfaq.asp

            The variable toll roads in NOVA are not owned by VADOT nor do they earn any money from them.

            Well I don’t know about you, but in the entire time I lived in NOVA I-66 was always gridlocked on the fringe of HOV and now the fringe of toll. Seeing as they pushed the toll in both direction by an hour it just moved rush hour.

            Again, when was the last time you were in NOVA. The continual commenting of topics to which you have zero knowledge and or experience, is in a word laughable. You also, don’t respond to a single world I write and go off on tangents (which are known as Red Herrings).

          • Actually no, I got it from EzPass.

            And I’ve said several times that HOV for hybrids is no longer.

            And yes, VDOT contracted with Transurban to build the infrastructure and operate the toll lanes – it’s a lease.

            And yes, money does to to transit and TDM…

            https://www.expresslanes.com/toll-revenue-supports-transportation-improvements

            re: ” Again, when was the last time you were in NOVA. The continual commenting of topics to which you have zero knowledge and or experience, is in a word laughable. You also, don’t respond to a single world I write and go off on tangents (which are known as Red Herrings).”

            more personal attacks dumbass…

            we’re done once more…

          • Larry,

            1) That is false, you were insistent about hybrid rules until you were corrected (by myself).

            2) Transurban owns and operates all toll roads in NOVA, VADOT does not. Your article is about 395 express, which while owned and operated by Transurban isn’t I-66. It does operate the same way regarding HOV EZ-pass flex, it’s variable toll but it’s tolled all day long.

            3) Calling you out for no responding to what I said and therefore identifying your statements as Red Herrings is not an “ad hom” attack. Ironically, after accusing me as such you proceeded to engage in an “ad hom” attack yourself.

            No, in fact we are not. I don’t care if you respond or not, if you make an uneducated and asinine comment, I will feel freely to call you out for it.

            Pro-Tip:
            Here is a listing of Logical Fallacies and how they are defined, you should study up.

            https://owl.purdue.edu/owl/general_writing/academic_writing/logic_in_argumentative_writing/fallacies.html

  8. Who says Biden will win the WH? He doesn’t even campaign, Harris barely does. Decades of do nothings, time to get rid of them.

    • You could be right. I thought Trump was going to win in 2016 and he did. I just don’t see it that way this time. The establishment on both sides of the aisle really, really hate the idea of an outsider in the White House. They have spent the last four years making sure the outsider is gone ASAP. Meanwhile, Trump is his own worst enemy. When long serving retired military officers go to work for Trump and walk away disgusted there is something wrong.

      Biden is smart not to campaign. He’s a dumpster fire on stage and will be a dumpster fire in the White House.

      We’ll see ….

      • That’s because the establishment can’t waste decades bleeding us dry and becoming multimillionaires on our dime any longer.
        Not smart – the fact he can’t handle it says everything about him, Harris and the Democratic party.

    • If you’re voting for Trump, do so BEFORE you attend one of his rallies. Two weeks is enough to eliminate your chance to do so on the 3rd.

  9. All of the Sched A deductions benefit the wealthier taxpayer. So what? Even the medical deductions, which of course dovetails with Obamacare, benefits the wealthier taxpayer.

    Given a progressive tax rate, as one moves up the tax rate ladder, one gets more and more benefit for each dollar deducted from the taxable income. That includes education deductions, Trad IRA deductions, and those straight off-the-AGI deductions too.

    Hell, I love Profit Sharing; it never even saw a tax, it went in at 72% my money, 28% Uncle Sugar’s money, and if I am able, I might get it out as 85% for me 15% for him.

    But, dear God, paying taxes on taxes really sucks and SALT is a clearly identified tax-on-tax where that, at least, can be rectified.

    • If I make $1M and lose $3K in the stock market, Uncle Sugar effectively pays 37% of that loss. If you make $50K and lose $3K in the market, Uncle Sugar effectively pays less than 20% of that loss.

      These inequities can be fixed with limited tax, not income, deductions and credits.

  10. The $400k income threshold for confiscatory tax rates means that people will make sure they do not make that much. Doctors, for instance, may decide that when their annual income approaches $400k they are done for the year. Another incentive for the brightest and best to become accountants and tax lawyers.

    • Folks who make that kind of money can afford really good tax advisors…and do…………

    • Who said the new rates would be confiscatory? As I understand it, they would be returned to what they were before the Trump tax breaks. Hardly confiscatory, especially considering all the tax deductions and credits available. After all Trump only paid $750 annually under those old rates.

      • ” confiscatory” is a favorite hot button word used by folks who argue against any/all taxes no matter what… they’re “taking my damn money” and that includes TOLLS by the way!

        “Why should someone have to pay a freaking toll to go across the Chesapeake Bay Bridge Tunnel ? I pay my taxes already, why are those charging me again?”

  11. The only way to fix this is to restructure the accounting for taxes.
    Total all income, adjusting with losses up to gains/income.
    Subtract SALT, and other taxes paid, e.g., foreign, sales, fuel, etc.
    Calculate income tax.
    Total all deductions, medical, mortgage interest, theft, education, IRA, etc.
    Calculate tax deduction/credit using a fixed rate for all taxpayers.
    Tax payable = max(0, income tax – tax deductions)

  12. It will be interesting to watch, but I predict the Dems will act to subsidize Big Blue states such as California and New York, one way and another.

    For example, California is mandating all vehicles sold must be fully battery electric (no hybrids allowed). This means Congress will probably support that with new massive subsidies, that will go to the (upper income) residents of the Blue states with mandates. The auto companies will shift all of their resources to making cars for Ca, including reducing prices for electric cars as needed to avoid mega-fines if they do not sell enough to meet their quotas. US auto companies support these EV mandates, I think in part because it gives them a leg up on Japanese auto makers who are more fond of hybrids than the 100% battery electrics.

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