Taxes

This weekend I was working on my income tax. I do it in little pieces instead of all at once. It's less overwhelming that way. Something surprised me.

One last minute change that Congress made, was to allow people to have a choice between deducting state income taxes or state sales taxes. This was promoted as being fair to the folks in states with no income tax. This discussion that I heard about this was that the only people that would be affected would be people who lived in no income tax states and a rare few who had purchased something major, like a boat.

I discovered that my deduction this year for estimated California sales taxes, based on my income, was greater than my deduction for California income tax. It looks like it will be the same next year or any other year. California is a high income tax state. People in other states must be noticing the same thing.

Whether they realized it or not, it looks as if Congress has passed a stealth tax cut. I have not penciled it out, but doing the math in my head it looks like it will benefit the wealthy as well as me.