Republicans just increased many of their voters’ state and local tax burdens, and then ruined their holiday seasons to boot.
And ruined is not too strong a term. Well-off homeowners across the country spent the past week fighting for their tax planners’ attentions; waiting in long lines to prepay their 2018 property taxes, in hopes of getting in one last, unlimited deduction before the new rules take effect — then learning that those prepaid taxes might not actually be deductible, anyway.
You all may have been watching the news lately, as hordes of well-off taxpayers rushed to pre-pay their property taxes in 2017 because they believed (with good reason) that those taxes would not be deductible in the coming year. The Republican Tax Scam caps deductions for state and local taxes at $10,000, down from the unlimited deduction allowed under the Obama Administration.
Now many of those people are finding out it their efforts to beat the clock didn’t matter. They’re screwed anyway:
[O]n Wednesday night, the IRS announced that taxpayers can only deduct such property taxes if those taxes were assessed before 2018. In other words, payments based on one’s estimated property-tax burden next year would not qualify for the deduction — only those based on an official 2018 assessment would. But different states and localities conduct their official assessments on different timetables — Washington D.C. set its 2018 property-tax rates back in October, while nearby Arlington County, Virginia, won’t put its in place until April.
If that doesn’t make sense to you (and I admit I had a hard time digesting it myself), let me defer to Eric Levitz, writing for New York Magazine, who explains what was pre-occupying the thoughts of some of the nation’s wealthier citizens this past week:
Homeowners in high-tax enclaves all across the United States are facing similar losses from the GOP’s SALT cap. This, by itself, could be enough to push a critical mass of moderate Republican voters into Team Blue’s column in 2018. But the injury of the SALT cap is all the more explosive for the insult that Paul Ryan paired it with: The Trump tax cuts don’t just strip a valuable deduction from a core Republican constituency, they also leave members of that constituency with only a single week to adjust their financial planning — specifically, the week between Christmas and New Year’s Day.
What a sucky Christmas it was for Republicans lining up in their affluent, “Blue-state” Republican Congressional Districts (and there are a lot of those) hardest hit by the Republican tax scam. So they raced to their accountants to try to figure out a way they wouldn’t lose those deductions—the same ones, incidentally, that all of Americans have trusted and counted on for decades until the GOP passed their “midnight massacre” to benefit their tiny, ultra-rich donor base. To reiterate, while this may not have risen to the level of a Brooks Brothers Riot, it was most certainly a Coopers and Lybrand clusterfuck:
Well-off homeowners across the country spent the past week fighting for their tax planners’ attentions; waiting in long lines to prepay their 2018 property taxes, in hopes of getting in one last, unlimited deduction before the new rules take effect — then learning that those prepaid taxes might not actually be deductible, anyway.
The Republican scheme requires an “official” assessment prior to 2018 to obtain the deduction. For some, the deadline to obtain that assessment has already passed. In its haste to ram the Bill down the throats of Americans, the GOP also forgot to include a definition for “assessment,” causing rampant confusion in states like New Jersey:
By state law, a New Jersey property assessor “shall determine his taxable valuations of real property as of October 1 in each year” – language that sounds promising for would-be tax cutters. But the same statute holds that the assessor “shall complete the preparation of his assessment list by January 10.” Ultimately, the “final assessment” is to be completed by May 5.
Good luck determining when the “assessment” took place in that statute. Your accountant has one week—and guess what? He’s on vacation!
Dumping this monstrosity on Americans one week before the New Year has also resulted in beleaguered county officials turning people away at the door. Levitz quotes one example from the New York Times:
Steve Halliwell, who lives with his wife, Anne, in Irvington, a village in Westchester County, N.Y., began asking town officials several weeks ago about paying next year’s property taxes this year….
But the order came too late for the county’s residents: Officials there said this week that they would not be able to issue tax assessments by the end of the year.
“There are a lot of angry people here because they feel powerless and they are not used to feeling powerless,” Mr. Halliwell said.
Yes, a lot of mostly rich, predominantly Republican voters living in Republican districts of what are otherwise largely Blue States (think New York, California, Pennsylvania, Illinois, and New Jersey) are not used to feeling powerless. Guess who they’re going to take their anger out on?
[F]for some erstwhile Republican voters, the experience of spending the Christmas season frantically trying to navigate state and local bureaucracies — because GOP lawmakers pared back their tax deductions to give giant breaks to the superrich, while leaving them virtually no time to adjust — will surely loom larger.
I’m feeling one Hell of a Wave coming.