Overheard this morning in the Tobak household:
“Have you seen this year’s property tax bill?”
“I know, right? They’ve piled on a laundry list of local bonds, taxes and initiatives. And the assessment went up.”
“Trying to figure out how we’re going to pay it by Friday.”
“Take it out of the home equity line of credit?”
“That’s nearly maxed out. Besides, didn’t we get a notice that Wells Fargo is winding that down this year?”
“Shit, that’s right.”
“Should we sell some stock?”
“May be a good time; the new income tax bill is going to kill us in 2018.”
“I know, it’s crazy: We’re going to lose our state and local deductions plus half our property tax deduction. Good time to sell some stock.”
“Good time to move out of California.”
“That’s what I’m thinking. Who would have thought, after a Republican sweep.”
“No shit. Tax cut my ass.”
I’m sure we’re not the only ones having that sort of conversation around this time of year. Sort of puts a damper on the holidays and all.
Not to complain, but, what the hell: With skyrocketing healthcare costs and living expenses and stagnant income and interest rates, it’s hard to believe that what’s being sold as a massive tax cut could screw millions of hardworking and retired people who own a home and live in a high tax state like California or New York.
I’ve been pushing for tax reform for years, but this is far from the simplified overhaul I’d envisioned. Granted, we needed lower corporate and small business taxes to boost the economy, but the corporate rate cut may not go into effect until 2019, and it’s not at all clear that this bill will help most business owners. It certainly won’t help this one, that’s for sure.
Call me a sore loser if you want, but whenever governments try to pick winners and losers, there are always unintended consequences. As a life-long fiscal conservative (I said fiscal), I can’t help but feel like I’ve been thrown under the bus. Besides, if you’re going to call it “the biggest tax cut in U.S. history,” that’s what it should be. For everyone.
It’s not. Not even close.
Funny thing is, my long-time tax accountant retired last year and moved to Washington, a state with no income tax. How the hell did he know to do that? Strange how some people just have an amazing sense of timing [sigh].
P.S. Although both House and Senate bills killed state and local income tax deductions and limited property tax deductions to $10K, now that the bills have passed, lawmakers from high-tax states like California and New York are fighting to bring back those deductions in the reconciliation process. Makes no sense to me, but that’s politics, and I’m not complaining. Stay tuned.
Image credit: YouTube screen shot by Wochit Politics