Flopper
Diamond Member
I'm confused. As I understand the new tax law, there is a limit of $10,000 on the state and local tax deductions. That being the case, wouldn't that provision raise taxes for states and federal government?What people often fail to consider is the cost to maintain roads can be drastically different depending on terrain, weather, and usage. For example, the cost of maintaining mountainous roads can be incredibly high.I have lived in two states with zero state income tax, Florida and Washington. In Florida the state sales tax is 6% plus an optional local tax of 1% ,which is common in most of the state. Property taxes are reasonable but not low. In Washington the state sales tax is 6.5% but local sales tax can drive that to as high as 10.4%. Property taxes are above the national average.Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?
Keep in mind that states are going to get the funds they need. If they don't get it in income taxes they will get it in sales or property taxes. I have live in a number of states. Now I now this may sound nuts to some but states that have higher taxes are often nicer places to live, better parks and recreation, better roads, better funding for education and law enforcement.
I live in a state with no income tax and no sales tax. The roads are better than in the surrounding (high-tax) states, too!
near total agreement but by creating additional incentives for interstate migration the SALT bills will have to go up and services will have to go down in the worst positioned states. I suspect actual defaults by states will be 3-6. Only three states CA, IL and NJ that probably would go under even if the tax bill did not exist, two MA and NY are close enough to the edge to be pulled under without intervention by the Fed, the 6th is a fudge factor for state house idiocy and panic. But the collapse will likely happen prior to the 2020. Trump does have sense enough to blame the whole mess on the Democrats which be plausible. That is why I think the lowball of the range is more likely.