Posted on 11/29/2017 10:53:22 AM PST by Boomer
Since state and local taxes can be deducted, the tax burden is shifted from those governments to the federal government, which in turn makes up for this lost revenue by keeping taxes higher on the rest of the country. In effect, taxpayers in low-tax states and cities, like those in the South, are forced to subsidize the lavish public spending of liberals in New York, New Jersey, Connecticut, and California, who have little incentive to reduce the local taxes that fund their pet projects. It is much like making charitable donations online using someone else’s credit card. It does not make you Robin Hood. It makes you a charlatan, which is why rather than pay the bill, the millionaires who helped put these Democrats in power, would rather flee like cowards.
(Excerpt) Read more at townhall.com ...
Thoughtful piece... thanks for posting.
Oops. That one got by me. Looks like it had a lot of interest so I’ll be checking it out.
This is why,New York, New England and California always go Democrat.
Eliminate federal income tax. Then, the federal government, which is a creation of the states, would be funded by direct payments from the states. The share for each state would be in proportion to the states’ number of representatives in the US House. Also, go back to senators appointed by the state governments. Of course, amendments to the Constitution are necessary.
Just a thought.
Big earners avoid travel to and residency in the Big states to avoid the displaced tax revenue you described.
The fed revenue contribution data I referenced are readily available. The displaced corporate taxation you described is not. Furthermore, it would benefit corporations to decentralize taking advantage of the tax benefits available in the lower states. NY for example is having difficulty retaining corp revenue which is no doubt an issue in other Big states.
I’m not condemning any state, but the notion that red states are subsidizing blue states is absurd.
In theory, so they'll expand and hire more workers.
Big Deal. Many didn't see it the first time. How much money came out of your pocket or how much pain was inflicted on you because it was posted again?
A cousin of the Grammar Police.
FAKE ACCOUNTING
Per capita, doubtful. NY & CA have high population.
Everybody subsidizes their welfare states.
Corporations are not people. Corporation wealth is spread across its customers which is everybody.
If Corporations don’t pay taxes, then why are they always clamoring for tax cuts?
That's funny. When I come to the site it comes up with Latest Articles so I see everything posted since the last time I came here. Does the site work differently for you? They also have a search function, which you are supposed to use before you post. Articles come in from different sources with different titles (look at all of the posts today about Matt Lauer, for instance) but in this case it was an exact word for word match.
How much money came out of your pocket
We have all of those FReepathons for a reason. The bandwidth costs money.
A cousin of the Grammar Police.
Perhaps you should PM the Admin Moderators and ask them why they bother deleting duplicate threads. I'm sure they'd appreciate your input.
This makes sense to me. In the 35% federal income tax bracket, a New Yorker who pays $10K in state and local taxes reduces his federal income tax by $3.5K. A Georgian who makes the same income pays, say, $6K in state and local taxes, reducing his federal income tax by $2.1K.
So, in NY, $3.5K of state and local taxes is paid by transferring money that would have been paid to the federal gov't to the NY treasury. In GA, it's only $2.1K.
Looked at another way, if the SALT deduction is repealed, then the New Yorker will actually pay $10K in state and local taxes, rather than the $6.5K he pays now. So state government spending will arouse more resistance than when the federal government subsidizes it.
It's a graduated or progressive income tax.
Rich people pay at a higher rate.
So states that have a lot of rich people send more money to Washington DC than states with fewer rich people.
Bob Barr might be right about the state tax deduction, but perpetuating stereotypes that don't correspond to truth doesn't advance his case.
If Corporations don’t pay taxes, then why are they always clamoring for tax cuts?
Corporations have to spend a lot of time to transfer the taxes. If some other corporation manages to get a special exemption, and there are many, they lose because they have to pass along the taxes and the other does not. This particularly applies to competition from overseas.
It causes a lot of inefficiency. The corporation still has to do the paperwork and follow all the rules.
The people that the corporation passes the taxes on to are of three classes, customers, owners, and workers. All have good reasons to oppose being taxed, and can provide incentives for the corporation to work to lower those taxes.
Enormous amounts of corporations are owned by middle class people through the 401K and other retirement accounts.
This is irrelevant. People are taxed on income not on state by state basis. This statistic while an interesting tidbit has no effect whatsoever on whether the people in these states should get to itemize their state taxes away. Anyone who doesn’t itemize is not effected by losing this deduction. As I have stated in other threads I live in NY and Have itemized for at least the past ten years and I am willing to take the hit if this hurts massive democrat voting states.
Not “FAKE ACCOUNTING”.
On average, households in CA and NY pay more to the fed than any other state including TX. That’s a fact.
Corporate fed revenue apart from individual/household revenue is primarily from TX, CA, and NY in that order.
Despite the SALT deductions, the average CA and NY household pays more to the fed than any other state including TX. And without the SALT deduction, that imbalance will only increase.
Although my fed taxes would increase, I’m not completely against the tax plan. But I’m certainly against the bogus premise that somehow the red states are subsidizing the big blue SALT states — total nonsense.
They need to charge more for their products in order to pay those taxes. So if you're a US corporation paying a 35% corporate tax rate who has competitors in Hong Kong, Singapore, or Taiwan, where the corporate rate is only 17%, you would be clamoring for tax cuts too.
People are always lamenting Americans buying cheap foreign imports. Well, our 35% corporate tax rate is one reason foreign imports are cheaper!
>> I live in NY and Have itemized for at least the past ten years and I am willing to take the hit if this hurts massive democrat voting states.
Have you looked at the NY counties that voted for Trump?
I’m already paying 35% more than the average US household in addition to SALT liabilities. Why the Hell am I expected to pay more simply because I’m in a Blue SALT state?
BAD SPENDING
CA, NY, NJ & Big City States have Bad Spending problems like bad schools, bad traffic, boondoggle rail & trains to nowhere, that nobody wants.
Big City States pay high useless taxes for junk and want responsible states to waste money.
Big City States SHOULD pay very high taxes for their JUNK.
We’re in an excellent, patriotic school district which is paid for with local taxes. However, we’re still paying a premium to the fed.
Whatever you’re advancing, it’s not reality.
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