The new tax law, explained
- Most state and local tax (SALT) deductions have been eliminated. We can deduct up to $10,000 in property taxes.
- The much-feared Alternative Minimum Tax threshold is also increased slightly.
- Standard deductions are expanded to cover the first $24,000 for married couples and $12,000 for individuals.
- A list of other changes are summarized nicely here in this MarketWatch article.
How companies are reacting to the new tax bill
Impact of new tax law on recruiting low-wage earners
Impact of new taxes on recruiting mid-wage candidates
Impact of the new tax bill on recruiting top executives
- Executives will likely demand a higher compensation package for their new job compared with what they were making before. This is to help them balance out the bigger checks they’ll have to pay to the IRS.
- It will become much harder to expect an executive to relocate to a state with high state taxes. Before Trump tax bill, this was already a big challenge given the huge difference in home prices between states such as California and those in the South or Midwest. Now, with a California executive taking home less pay after the new taxes, it would be even tougher to convince one in a lower tax state you may be recruiting to relocate there.
- Executives will want to negotiate for a much larger signing bonus. This is to help them reduce their home mortgage payments as much as possible. Realistically though, unless the signing bonus is in the six figure range, it won’t make much of a dent given the high real estate prices in these high state and local tax states.
The net equality effect
Kyle Tan is CEO of PointFast. Based in Silicon Valley, he co-founded PointFast to help recruiters gain more insights from the emails they send out. Now, we’ll know that the Hiring Manager spent 45 seconds viewing a resume on his PC in Chicago. And, the Candidate actually visited the company website from her mobile phone. No need to guess! Learn more at PointFast.com, follow us on Twitter @PointFastPoint, or connect with us on LinkedIn.
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