In a state with a top marginal tax rate of 13.3 percent, which kicks in at $1 million, that’s a massive hit – it could mean paying well in excess of 50 percent of marginal income. Overall, California was by far the lead recipient of state and local tax deductions in 2014, with residents filing for more than $101 billion in such deductions; the second-place finisher, New York, clocked in at just $68 billion. Furthermore, the Trump tax plan would cap mortgage loan deductions at $750,000, which in an inflated real estate market like California, smacks a serious number of homeowners.
Now, the Trump tax plan would help major businesses located in California – it lowers the corporate tax rate to 21 percent, benefiting Silicon Valley and Hollywood and the myriad other Fortune 500 companies located here. But those benefits accrue to companies across the country; the costs of removing state and local tax deductions accrue mostly to blue states.
Democrats complain that this is deeply unfair. “I don’t believe California should suffer in order for President Trump to give tax cuts to the rich,” says U.S. Sen. Dianne Feinstein.
This neglects a rather crucial fact: The people who will get smacked the hardest in California are the rich. Homeowners get hit harder than renters; middle income Californians get off easy compared to those at the top end.
Shapiro At 'Sacramento Bee': Trump's Tax Cut Is Justice For California's Buck-Passing Politicians
Now, the Trump tax plan would help major businesses located in California – it lowers the corporate tax rate to 21 percent, benefiting Silicon Valley and Hollywood and the myriad other Fortune 500 companies located here. But those benefits accrue to companies across the country; the costs of removing state and local tax deductions accrue mostly to blue states.
Democrats complain that this is deeply unfair. “I don’t believe California should suffer in order for President Trump to give tax cuts to the rich,” says U.S. Sen. Dianne Feinstein.
This neglects a rather crucial fact: The people who will get smacked the hardest in California are the rich. Homeowners get hit harder than renters; middle income Californians get off easy compared to those at the top end.
Shapiro At 'Sacramento Bee': Trump's Tax Cut Is Justice For California's Buck-Passing Politicians