Bloomberg, IRS, Laura Davidson discussed on 24 Hour News
A Bloomberg business flash from Bloomberg world headquarters I'm Charlie Pellett down Thursday's second down day in a row for the s. and p. five hundred index trade. Sensitive stocks pacing the declines s and p down four a. Drop of two tenths of one percent the Dow down seventy six down three tenths of one. Percent NASDAQ down, ten drop of one tenth of one percent tender. Down to thirty seconds at. Yield two, point eight two percent gold down nine tenths of one percents eleven eighty five ounce sand west. Texas intermediate crude. Higher by just about one percent. At sixty seven ninety four, a barrel of WTI I'm Charlie pelletan that is a Bloomberg business flash thank. You so much Charlie Pellett and Taylor When you look at the Bloomberg. And you think what would people be interested in reading about one of the stories that is sure to get their attention is one about their taxes going up and, that's the story that moved just a few. Minutes ago here on the Bloomberg terminal the IRS moving to. Block New York and New Jersey efforts to skirt the state tax cap this of course is. Part of the, new tax law a cap of ten thousand dollars. On deductions of state and. Local taxes, we're going to bring one of the authors of that story Laura Davidson she is Bloomberg news. Is tax reporter. Joining us from our bureau in. Washington DC Lor great to, be with you So tell us what's happening here and why. This is bouncing so high So yes so in the tax law change. The congresswoman and said you can only deduct up to ten thousand dollars, I've your, state and, local taxes and in high tax states like California New York New Jersey lots of taxpayers have, bills that way exceed that know twenty thousand thirty thousand forty. Thousand dollars and they, used, to be able to deduct all of that so the states can hey let's. Look at ways that we can find. Some sort of work. Around here so people can still write that off basically what they said it's sort of re characterize. This as, a charitable contribution donation to the state or the county. Created you know basically set up state laws that funds can be created you. Can donate that and then getting full deductions on your, federal, tax return and the IRS and treasury are coming in here saying no we don't think this is a legitimate charitable contributions that you basically have to meet a bunch, of other requirements, if he wants to get a. Full deduction hair Jason as you know Muniz do, not trade like equities so I wouldn't be. Surprised if there's no reaction but let me just put this into perspective Our viewers relative to the triple a benchmark yield. California's the AA minus rated state and they're trading right as a AAA, because there's, such high, demand for tax free bonds and California that you're seeing the same yield even though there is, much more risk than a AAA curve in part because you. Have residents that are, fleeing, trying to find safe haven places to put their money Laura I want to. Ask you what is your first thought. On the impact that. This has on some of the residents residence of high tax states have already third calling their accountants. And lawyers, saying hey you know what if I moved to particularly. In California Nevada Texas lots of low tax states that are that are close. By and it's it's not super easy to do that, you, have to meet a lot of requirements but the people likely are going to see their tax bills go up on if you're a higher earner your homeowner in one, of these states, but this is really not the. End of it you know states could challenge this, they could change the work arounds that they've Passed a, far too to comply. To of further get around the IRS regulations The mad about this New York New jersey That they were, feeling they were targeted by Republicans in congress and they're getting really creative about, how they. Can basically save their tax payers the money and so is there sort of an effort galvanizing among opponents of this either on the? State level or even at the federal level because I have to think that members of congress may be. Hearing from constituents who are squawking about this so states have. Been a little bit in a holding pattern they knew this was coming from the. IRS they've known for a couple of months they were kind of a waiting to see what. The IRS is, gonna do and then, react and, of course congress could do something, you know if Democrats take back the house this is one of the things they've cited is they want to repeal this. Cap on on state and local tax deductions but remember, the Senate is unlikely to flip it could but but not likely and and Republicans still hold the White House. And they would veto any efforts like this so it really need to be until Democrats have more of a lock on on congress and the White House before there, could be a law change that could died. Can. Make this better for high tax, States Great Laura Davidson our Bloomberg news tax reporter joining us on the phone from, our bureau in Washington DC you're listening to. Bloomberg.