As most people are now painfully aware, California’s progressive political majority has just hit middle-class taxpayers with billions of dollars in new taxes. As a direct result of these actions, the state will soon have the distinction of having the highest taxes in the nation in the following categories: Highest income tax rate; highest state sales tax rate; highest vehicle tax; and the highest gas tax (and that doesn’t even include the added costs of cap-and-trade regulation). For the wealthy, California can be a lovely place to live. For normal folks, life in the Golden State can be a struggle. According to a recent article in the Sacramento Bee, California lost more than 1 million people in net domestic outmigration between 2004 and 2013.
by Kenneth Ziskin, The Apartment Owners’ Estate Planning Attorney SM
Tax reform finally became law late in December, 2017, even though passage required it to give up its common name, the Tax Cut and Jobs Act (“TCJA”).
For most of you, the TCJA will give with one hand, and take away with the other. For some, the act will be a lump of coal, and taxes will, unfortunately, go up. For others, the act will be a real Christmas present that brings real tax savings. You probably cannot just intuitively figure out whether you got a real present or a lump of coal until you model your situation, and possible planning opportunities.
Many of the law’s provisions were not finalized, or even discussed, in committee, and we will not understand the full impact for months, or maybe even years. But, while all tax professionals (including me) are trying to get a handle around the impacts of the TCJA, I want to try to give you an idea of some of the major impacts and a few planning implications.