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State tax deductions and the Alternative Minimum Tax

Photo of 20 dollars by Vitaly, Sand City, United States - via Unsplash

From Frank Sammartino at the Tax Policy Center:The Complex Relationship Between The State And Local Tax Deduction And The Alternative Minimum Tax.”

“The House Republican leadership and the Trump Administration want to repeal the state and local tax (SALT) deduction and the individual Alternative Minimum Tax (AMT). But as policymakers consider the combined proposal, they should be careful about the sometimes-surprising ways they interact with one another.

AMT repeal, which has widespread support on Capitol Hill, would primarily benefit high-income households. Over 5 million households pay more each year in individual income tax due to the AMT, the vast majority with annual income over $200,000.”

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Texas

Dallas County Judge Clay Jenkins proposes cutting property tax rate (again)

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From The Dallas Morning News,Dallas County Judge Clay Jenkins proposes cutting property tax rate.”

For the second year in a row, Dallas County Judge Clay Jenkins will seek to cut the county property tax rate “to help working families.”

Property values across the county rose by 11 percent this year, but after owners protest their assessments, officials expect the final tally to mark a 7.2 percent rise over last year. That stands in contrast to a 2.7 percent increase in the average worker’s wages, Jenkins said this week.

Meanwhile, County Commissioner John Wiley Price said Jenkins was engaging in “political posturing” the year before he runs for re-election. Price said the county needs the tax money to keep bringing staff salaries in line with other employers in the region, as well as update its equipment and buildings.

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Texas

Illusory property tax cuts

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From The Texas Tribune:Property tax relief doesn’t equal extra money in your pocket.”

The Texas Legislature is touting a bill — Senate Bill 2 — that would make it easier for property owners to protest big tax increases from cities, counties and special districts.

However, state promises of property tax relief tend to evaporate. Look in your wallet for the $126 in touted average savings you stashed there the last time lawmakers fiddled with property taxes, and the $2,000 boasted average savings you were supposed to get after major school tax reforms in 2006.

Taxpayers did get some relief, whether they felt it or not, from those efforts. But the savings were mostly eaten up by increasing property values and local school property tax increases driven, in large measure, by the Texas Legislature’s cuts in per-student spending on public education.

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Texas

How the elimination of state and local tax deductions could impact Texans

Photo of 20 dollars by Vitaly, Sand City, United States - via Unsplash

From The Dallas Morning News:How would Texans fare if Trump and House Republicans end state and local tax deduction?

Lone Star State lawmakers fought for years to give their constituents a fair shot at a wallet-fattening break on state and local taxes, eventually securing Texans the right to deduct sales tax from their federal returns just like other states’ residents do for income tax.

But now some of those same politicians want to eliminate the perk, which also covers property tax, for taxpayers in Texas and everywhere else.

Houston-area Rep. Kevin Brady has joined President Donald Trump and other Republicans in taking aim at the state and local deduction, the both revered and reviled chit that would be zeroed in exchange for lower tax rates and a simplification of the tax code.

“Rather than keeping federal tax rates high and giving tax breaks to a few who itemize, we are proposing to lower tax rates for everyone,” said Brady, who leads the House’s powerful tax panel. “So that all taxpayers can get help.”

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Texas

Rebranding property tax relief in Texas

Downtown Houston by Vlad Busuioc via Unsplash.

Texas lawmakers are still fighting over property taxes.

Without a state income tax and skimpy state aid, local governments rely heavily on property taxes for things like emergency services.

Property tax relief is a popular campaign item for state lawmakers, so there are a few bills that seek to limit ability of cities to raise property taxes.

In March, Texas’ Senate Finance Committee passed Sen. Paul Bettencourt’s bill that would reduce property taxes in this manner. Specifically, Senate Bill 2 (PDF) would trigger a special ratification election if average residential property taxes are raised more than 4%. This is a significant reduction from the current 8% rollback election limit. Continue reading “Rebranding property tax relief in Texas” »