Category Archives: State income taxes

Trump’s tax cuts are coming. But not much for you, unless you’re very rich.

Republicans in Congress say they plan to pass a tax bill in November. While there’s no way to know what’ll be in a final bill, you can go to the Republican starting point to get a sense of what the end is likely to look like. For most Americans–in fact, for just about everyone except the wealthiest among us–the picture isn’t very exciting.

The grandiosely-titled “Unified Framework for Fixing Our Broken Tax Code,” released in September, would cut taxes by an average of about 1.2% for 95% of the population (everyone with income of up to about $300,000), according to an analysis by the Urban-Brookings Tax Policy Center, which is the go-to source for this stuff.

But that’s just an average; not everyone would get a tax cut. For example, about one of every three taxpayers making $150,000-$300,000 would actually see their taxes increase, mostly because of the loss of itemized deductions such as state income taxes and local property taxes.

If you’re in the top 1%, the outlook is radically different. About half of the total tax cut will go to the top 1%; their bills would be cut by an average of $146,000, according to the Tax Policy Center.

And for the top one-tenth of one percent (people making more than $3.5 million): Say Hello to an average tax cut of $747,000.

The tax breaks also shrink over time for everyone except the top 1%, as The New York Times points out here .

Pay your taxes — or lose your driver’s license! NY State has a cool idea to convince reluctant tax-payers.

I regularly tell clients that cash-starved states have become very entrepreneurial and even aggressive in their tax collection efforts. If you earn money in a state, the tax department will probably be willing to go to court to collect income taxes even if you live hundreds of miles away. (I’m looking at you, New York… Continue Reading