(Reuters) — The U.S. tax overhaul is a boon to Silicon Valley technology companies like Apple Inc and Alphabet Inc, which will enjoy big tax cuts and the chance to bring back billions of dollars from overseas at a reduced rate.
And contrary to the dire warnings of California officials, a large swath of Bay Area workers and their families stand to get a tax break as well, even with new limits on state and local tax deductions.
California has the highest state income tax in the nation, and Governor Jerry Brown has called the new tax bill “evil in the extreme.”
Nonetheless, many in Silicon Valley stand to benefit. Startup employees, freelancers and venture capital investors are among those who will get new tax benefits or keep those they already have, tax experts said.
Even some of the middle- and upper-income professionals who form the core of the technology industry workforce will still get significant tax cuts, while most others will see little change, they said.
The new $10,000 cap on state and local tax deductions will have a less dramatic effect than feared because such deductions in many cases had already been rendered moot by the alternative minimum tax (AMT), a mechanism for assuring that the well-heeled pay at least 26 percent of their income in taxes.
“There is a lot of noise about workers in California, New Jersey, New York and Illinois (facing higher taxes), but 80 percent of our clients there were already paying the alternative minimum tax so they don’t benefit from the state and local deductions,” said Jack Meccia, a tax associate at financial planning firm Vestboard, which…