Bedlam Lunacy

Bedlam — Once London’s Lunatic Asylum

SALT — no, not Strategic Arms Limitation Treaty ... this time it is State And Local Taxes deductions on federal taxes. Nancy Pelosi, in her press conference, said that the House would pass today a repeal of Trump’s tax reform that puts a  $10,000 limitation of state and local tax deductions on federal tax calculations. And the revenue that our treasury loses there from would be made up by increasing taxes on the wealthy.

Now, dear reader, do you see the lunacy of this proposal? The SALT deduction limitation on federal taxes ALREADY increases taxes on the wealthy because they are the ones who are now paying large state and local taxes ... the excess over $10k they lose as a federal deduction.

So, in essence, Pelosi is saying that her children, the House Dems, are going to be reducing taxes on the rich ... and pay for it by increasing taxes on the rich!

This lunacy seems typical of today’s House impeachment Bedlam ...

Tax Cuts

There is a lot of misunderstanding regarding Trump’s 2018 tax cuts. Polls say that only 17% of Americans believe that they got a tax cut whereas our IRS says that the actual number is 66%. My own daughter was doubtful that she got a cut because her refund wasn’t as large as before ... forgetting the fact that her tax withholdings throughout the year were smaller. When we went through the numbers together she was surprised at the size of her tax savings.

The media and demagogic Dems have played up the fact that it was corporations and the rich that got the majority of these benefits. Yes, corporations generally did benefit ... which is why the afterburners are on in our economy and the stock market is way up ... benefiting many retirement accounts. But, it is not true that, in general, the wealthy made out like bandits.

Let me explain. The new tax law had two zingers for many plutocrats — mortgage interest payment deductions were capped on loans of $750,000 AND real estate, state and local taxes were limited to a total of $10,000 if itemized. This latter construction meant that high-income people in high-tax states like New York, New Jersey, California, Connecticut, etc. really were punished in the itemized deductions column ... which generally meant that they ended up in that 34% of individuals who payed higher taxes.

Yes, the super-wealthy who could hire tax attorneys may have stopped some of this bleeding but, in general, it was the blue-state six-figure-income earners with big mortgages who payed more, and in many cases, much more income taxes last year.

QED.