DID YOUR 2018 TAX FALL? (Beware the Ides of April)

On Long Island, NY for middle-income folk, tax refunds are not matching expectations. The cap on state and local taxes (SALT), including both property taxes and income taxes (or sales taxes in states with no state or local income tax) is taking away the benefits of tax cuts on incomes for many taxpayers. The most-affected states by the cap on SALT deductibility are New York, Connecticut, New Jersey and California, in that order. Beware the Ides of April, i.e., April 15.

Comparing federal taxes paid on 2018 income with taxes paid on 2017 income, here are some early numbers. Please send any figures you have, or find online, to john@cityeconomist.com and I will add them. If you can't remember your prior-year tax bills, you can get them here from the IRS: https://bit.ly/2WMgpuG.

NEW YORK | GOP Passes "Decimating" Budget

October 26, 2017 – This morning, the House of Representatives passed a budget that the bi-partisan Committee for a Responsible Federal Budget describes as using "gimmicks", increasing debt and exercising "Zero Fiscal Restraint".

For New York State residents, the bill is especially threatening because it eliminates the deductibility of State and Local Taxes (SALT) from taxable incomes.

When this idea was introduced under President Reagan, it was described as "double taxation". The CEO of American Express predicted that the value of the company's new building would drop by 25 percent, from $1 billion to $750 million. The proposal was defeated.

Under President Trump, the idea was resurrected and has passed both the Senate and the House.

On Long Island, two Republican Congressman opted to vote against the bill:

• One of them, Rep. Peter King, said: "Why should I vote for something that would end up decimating my district?" 
• The other, Lee Zeldin, represents most of Suffolk County. 

The bill has passed by a few votes and now goes back to a House-Senate conference for reconciliation.

New York voters are watching carefully. If King and Zeldin think that they will be forgiven for this "decimating" GOP budget because they voted against it, they may be in for a surprise. 

RETIREMENT | Planning and Saving

I have a post up on my Network Solutions website (CityEconomist.com) that gives various self-help calculators.

As a result, I get suggestions all the time for additional resources to add. I check these out and often they promote a particular product. The writer is a paid promoter and I tend to go no further.

The following articles relating to retirement savings seem to be genuinely useful, so I am posting them here, rather than trying to update the website.

How Much of Your Income Should You Save?

Calculate Your Money Saving Goals: Compound Interest Savings Calculator

Simple Steps to Manage Your Money

How to Grow Your 401k at Any Age

5 Tax Reasons to Start a 401k

If you question any of these resources, or have additional ones to suggest, please comment or send me an email at john[at]CityEconomist.com.