Chuck Grassley, the Iowa Republican who heads the Senate Finance Committee, should familiarize himself with Long Island property taxes paid by the average homeowner. He said that getting rid of the cap on deductions for state and local taxes would “primarily benefit the wealthy” [“Cuomo, Trump on SALT cap,” News, Feb. 13].
This is not true. I pay more than $10,000 in school taxes alone, as do many homeowners. Why not adjust the cap according to income bracket? The $10,000 cap could apply to those with the largest incomes, with sliding-scale adjustments to allow those with lower incomes to deduct more. This certainly is necessary for senior citizens on fixed incomes.
We have lived in Huntington for 42 years. We love it here, despite the high real estate and sales taxes. One of our saving graces was that we would not get taxed by the federal government on income that we used to pay local taxes.
This year, we lost $5,600 in deductibility, resulting in an increase of $3,000 to our federal taxes, despite our nearly identical income in the previous several years. Our itemized deductions decreased by 30 percent even though we had nearly identical expenses. The $10,000 limit on deductions for state and local taxes is unfair and prejudicial. Highly populated regions that have higher costs of living require higher salaries and taxation. We should not be given the same limits as regions with lower costs of living. This unfair code needs to be retroactively repealed before seniors like us with fixed incomes and rising local taxes are forced to leave the area.
I have always received a refund. I am a widow who receives Social Security and a small pension. This year, I will pay $300 in taxes. Thank you very much, Donald Trump.
My wife and I are older than 65, retired, file a federal joint tax return and have no other dependents. We consider ourselves typical middle class based on our retirement income and expenditures.
Using tax software, I was curious to see what our 2018 tax would be if I applied the same income and itemized deductions from 2017, noting that our 2017 exemption of $8,100 was eliminated and the standard deduction was raised to $24,000 plus the post-age-65 $1,300 for each of us. Since the federal deduction for state and local taxes is limited to $10,000, which substantially reduced our itemized deductions, I used the $26,600 standard deduction.
Guess what. Our tax as a percentage of the same adjusted gross income would have been lower by a whopping 0.43 percent! Wow, now that’s a middle-class tax cut to celebrate.
I’m very happy that people are beginning to see the truth about the so-called tax cut. But the size of refunds is not an indicator of whether people are paying more or less taxes. The size of the refund only indicates whether a taxpayer under- or over-withheld their payroll deductions. The lower your refund is, the better! It means you had more available income during the year.
The real indicators are twofold. First is the amount of total tax. The total tax line on the 1040 compared with last year is one key. But that has to be compared with the adjusted gross income line. For example, if your total tax increased by 12 percent, but your total income rose by 15 percent, that is a good thing. So the other indicator is your effective tax rate. This is the percentage of your adjusted gross income of the total tax amount. If that goes down, your taxes were lower.
So what I want to see are figures about the size of total tax bills.