Trump Tax Plan a Mixed Bag For Californians

I'll try to share some more insights on the recently passed tax bill in a bit, but in the meantime, here are a few snippets from an Atlantic article that are interesting:

Highly compensated attorneys, doctors, accountants, and financial-service professionals will lose tens of thousands of dollars in deductions for their heavy state and local taxes and costly coastal mortgages, without getting much in return. Individuals earning between $200,000 and $500,000 will see most of that income increase from a marginal rate of 33 percent to 35 percent. (Individuals earning more than $500,000, by contrast, will see their marginal rate drop from 39.6 percent to 37 percent.

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As of 2014, there were already 30 million pass-through businesses in the United States.  Under the new incentives, there will instantly appear many millions more. To deal with the ensuing revenue loss, Congress had to squeeze somebody. Upper-income blue-state residents got the chop.

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If the idea behind tax reform is to eliminate favoritism from the tax code, then the tax law of 2017 is anti-reform: an aggressive loading of the costs of the state upon disfavored persons, groups, and regions. It leaves behind an unstable legacy, both economic and political.