Our Happy Valley town mailing list has been humming with loyal Hillary supporters trying to figure out how to minimize their personal tax bills by deducting in 2017 expenses related to 2018 through 2022 (and beyond?):
For anyone planning to prepay their taxes today, town office closes at noon.
what are the hours next week???
While a covey of us were writing checks at the Town Hall’s Tax Collection counter in the basement, a young man hurried towards us and asked if he could pay five year’s worth.
As of mid-morning today, they were happy to accept 2nd half FY18 payment AND BOTH 1st+2nd half FY19 (using FY18 as the estimate). They specifically would not accept more than that. Of course, policy may have changed during the course of the day.
I went back this morning for clarification. I spoke with the very, very helpful and friendly tax collector. She explained that, yes, the town would accept THREE payments: the April 2018 payment for the 2nd half of FY 2018 property tax; the November 2018 payment for 1st half of 2019 taxes, *AND* the April 2019 payment for 2nd half of FY 2019 taxes.
Interest in this procedure was not dulled by a resident quoting his accountant:
Most towns do not assess in arears (some do) which means that
if you were to prepay on your fiscal 2018 taxes, I am not sure it would be
deductible under the technical letter of the law. So, we are telling
clients that would receive a benefit to pay the January and March tax
amounts as these are already assessed, but we are cautioning them that any
payments for the latter half of the year may not qualify for a deduction
regardless of the amounts being paid in 2017.
It turns out that the passion for having Americans who live in other states fund the Federal government is a Massachusetts-wide phenomenon. “New rules set off rush to prepay taxes” (Boston Globe):
City and town officials across Massachusetts are being deluged with calls and questions — and even requests for financial advice — from homeowners who want to know whether they should pay next year’s property taxes now, before new rules that cap state and local tax deductions at $10,000 take effect in 2018.
To the bewilderment of municipal workers, taxpayers are dropping off checks — in at least one case for as much as $30,000 — to beat changes contained in the sweeping federal tax bill passed this week by Congress.
You guys still have an office that (relatively) normal people go to to hand checks to officials? How quaint.
Matt: Hundreds of them, throughout the state of Massachusetts!
Our own town is kind of interesting. There is an “old town hall” that is the size of a McMansion. Across the street is a school building, built in a 1930s style. When a new school was built, the town bureaucracy moved into one floor of the school building, leaving a second floor to be a daycare center. Eventually the daycare kids were pushed out and now there are three floors of bureaucrats occupying the entirety of the former school, including the basement. The town has not expanded geographically and population growth has been modest (we love poor people more than Jesus ever did and ostentatiously say that we want to do everything we can to help them, but we want to make sure that all of our new neighbors can afford a two-acre lot so that’s been the zoning minimum for several decades).
Taxes are not charity. There is really nothing inconsistent with supporting higher taxes and working to (legally) minimize one’s tax bill under any given tax regime.
Virtue signalling is a marvelous thing. I look forward to the immigration of more cannibal refugee tribes, when Massachusetts residents will eagerly advocate for government programs that feed reluctant, less virtuous residents of neighboring cities to the poor hungry cannibals.
@Neal Disagree. It is inconsistent. I support recycling. Laws change Jan 1, 2018 to require used oil recycling. If I do an early oil change and pour the used oil down the drain prior to 2018, I am following the law, but am inconsistent with my stated beliefs.
Have any of these individuals expressed a preference for higher federal tax rates? Support for Hillary Clinton wouldn’t indicate such a preference. I don’t recall her advocating higher federal taxes.
jdhzzz: Yes, there is an inconsistency in your example, but your example is about individual behavior while higher taxes are about public policy. Where exactly is the logical contradiction in believing:
1) Individuals should pay all taxes they owe under law.
2) It is acceptable for individuals to pay the lowest amount they owe under current law.
3) The government should collect higher taxes.
The inconsistency is that these people have the income to utilize tax avoidance strategies denied to lower-income people who might face higher taxes in this scenario. These people are paying tens of thousands of dollars in cash to avoid a few thousand or so in possibly higher tax liability.
Having the wealth to tax-shelter while politically advocating for higher taxes is, in fact, inconsistent with stated advocacy and is hypocritical like whoa.
The Practical Conservative: You raise a fair point about fairness but it is off topic relative to my comment which addressed wanting “higher” taxes.
“I support higher taxes, so long as they land on someone who’s not me” is not what “I support higher taxes.” is identical to. Yet the practical behavior of the people saying the latter is that they meant the former. That’s on-topic.
The reason is that your #2 is not what is going on. The people in phil’s OP are explicitly requesting the law be adjusted or altered in application specifically for them to avoid taxes. It would be like someone asking for school district taxes to be exempted for them this year but not putting some kind of explicit school tax exemption on their local ballot.
Wait, that’s exactly what they’re doing. They are requesting short-term, unwritten and unvoted-upon “workarounds”, not actually working within the strict letter of the law to avoid taxes.