A Pathetic LA Times Article on Proposed Tax Reform & Feinstein Makes No Sense – “Trump, Republican tax plan could be a big hit to many Californians”
So, the Republicans unveiled their Tax Reform Plan. There are many legitimate questions about a “plan” that has yet to be written in detail. With taxes, AS A LEGAL MATTER, every single word counts. Nothing is final and this will be a difficult process.
What jumps out at many is the proposed changes to the deductibility of state and local taxes (SALT). It is a major issue. 28% of Americans deduct them – many of them are high income earners in California. There are rational arguments for and against eliminating the deduction.
What must be kept in mind, however, is that the Alternative Minimum Tax (AMT) is proposed to be eliminated as well. That tax requires high income earners to pay a minimum tax notwithstanding other available deductions that would otherwise lower their tax bill. It is a hideous two stage process where you figure your tax liability, then figure your AMT liability – and then pay the higher of the two.
For many who would otherwise like to deduct SALT, the AMT effecitvely disallows it. YOU CANNOT TALK ABOUT THE ONE WITHOUT TALKING ABOUT THE OTHER.
Unless, of course, you are the LA Times and your business is to write hit pieces on Republicans.
Below is the link to their article, where they fail to mention the AMT/Salt interaction. They just scaremonger over SALT.
I am not focusing on whether SALT should be eliminated. I am focusing on telling the truth.
Beyond that, the article includes a comment from Sen. Feinstein. According to the LA Times:
“Sen. Dianne Feinstein (D-Calif.) said the elimination of the deduction was one reason the plan was a “non-starter” for her.
“I don’t believe California should suffer in order for President Trump to give tax cuts to the rich,” she said.”
Of course, it is rich (by her definition) Californians who would be losing the deduction. So which is it Senator? There plan has tax cuts for the rich or a tax increase for them because of the loss of SALT? Her comment literally makes no sense at all.
Stay tuned people, this will be a haul.