It is no wonder high-tax states are having so much trouble. Just take a look at the abject economic ignorance of their their governors, and other leaders. After opposing the Republican tax-cut reform passed late last year, they say their states will lose billions because some of their citizens will lose some of their SALT (or, state and local tax) deductions, and so they are going to sue. These same politicians have always said that raising taxes on the rich doesn't cause problems because they don't spend the money anyway and now they are bitching because some of their more well-off citizens may pay a little more. They would rather have everybody pay higher taxes and have a slower economy instead of losing their SALT deduction.
I assume most judges are bright enough to know that since Congress put the SALT deduction in the tax code in the first place, they can take it out.
I am amazed each day how this tax cut, tax reform is going to exponentially help the economy as the multiplier effect trickles through the economy.
We have already seen hundreds of companies in the first few weeks of the cuts say they are giving raises, bonuses, increased benefits and are going to make hundreds of billions in investments in the U.S. that they weren't going to make without the cuts. Yet these governors are suing because some wealthier residents are losing a tax break.
Since journalists and other Democrats were so wrong on their predictions that corporations wouldn't share their wealth, now they complain they aren't sharing enough? Everyone should remember that under Democrats' proposals, they would have had nothing new to share.
When will Democrats and left leaning economists admit they were wrong? The answer is never. When will they start recognizing that the cuts will generate new massive revenues for the government? Again, the answer is never because they have talking points, an agenda, and an election coming up.
Think of some of the companies that say they are raising their minimum wage from $12 to $15 per hour. This will give the minimum-wage- and lower-income workers over $6,000 per year, plus their $2,000 tax cut for a family based on the median income. So over the first eight years, a family with two earners getting these raises would get $112,000 more than under Democrats' plans. To House Minority Leader Nancy Pelosi and others, these are just "crumbs."
The multiplier effect and trickle-down effect of this plan is already very obvious to most voters, yet the high-tax-state governors' solution is to sue. That stupidity shows why government entities are broke at so many levels. They would rather have people dependent on government than give more people the opportunity to move up the economic ladder.
To show how everyone benefits from higher stock prices and businesses doing better one only needs to see the following story:
I heard this week that college endowments got a 12.2% rate of return in 2017 after anemic returns the previous two years. They should stop complaining about a 1.5% tax on their endowment income which would reduce their return to 12% and thank Trump for the reduced regulations and taxes which allowed their rate of return to climb. College professors should tell the public how increased profits and stock prices help 100% of the people whether they directly own the stocks or not. Here is what the survey found:
The survey of 800 schools found that the value of the average college endowment grew by 12.2 percent in fiscal year 2017, following average returns of -1.9 percent the year before and 2.4 percent in 2015.
As the rate of return goes up to public pension funds everyone from this and future generations benefits because less tax dollars have to be used to fund these underfunded liabilities and high tax state governors should be cheering instead of suing.
Jack Hellner is a certified public accountant with experience in individual and corporate tax matters.
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