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`lag

Joined: 12/13/1999 Posts: 62574
Likes: 14988


Not a dumb question, kinda an interesting one...


The current federal tax laws are a major change in the way people think about taxes, eg, should state taxes even be deductible from the federal taxes? This goes back to some idea of the federal government not being able to interfere with state tax collection.

Now, there's a highly political idea that some states by having high tax rates are essentially poaching some of that federal money. But the real point of your questions is that taxes have always been done a certain way, eg deductibles are deductibles and they should be the same, right? and this helps synchonizing the two processes, in MD you just basically copy all the federal information for your state, Takes a couple hours to do federal, ten minutes to do state.

Now that concept is no longer synchronized, basically that all states can deduct $10k off of federal regardless of their economies. Like a lot of things, if it's the same for everyone, it's not really a "deduction" just an extra step in the tax form. If this tax laws stick, then states are likely to make up for it somehow so end up paying the feds more and states will look like the bad guys but will have to tax more to make up the balance.

But yeah, part of a federal effort to cut back on deductibles (it's been going on for a while now, eg, your medical expenses have to be really major now to deduct, and tighter rules on things like donating cars, clothes you have to have a "real" value receipt) but the states are still catering to deductions why shouldn't you be able to deduct for state and just take the standard deduction for federal (or whatever you wanna call it)?

(In response to this post by BigDave)

Posted: 01/30/2019 at 1:07PM



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