There is something I don’t understand about this article. May be someone can explain it to me. It says that the average SALT deductions for Santa Clara county are $32000. Remember that’s the average. Since SALT phases out due to AMT for salaries around 200K, I have to assume that all these people have incomes around 200K or lower. CA tax for 200K income is about $15K per year. So the property tax portion of $32K is about $17K. Now for property tax to be $17K, the home value should be about $1.4M.
Now how many people with incomes of $200K bought homes worth $1.4M? From the above numbers, it seems to me that the most of these people are wealthy individuals owning expensive homes and somehow keeping their incomes below the AMT threshold. Yes, they will get hit under the new plan. But will they get hurt by it? I don’t think so.
Please let me know your thoughts.