Posted on 05/17/2018 4:17:01 PM PDT by re_tail20
On the other hand, state taxation should be the responsibility of the people living in that particularly state and that is why the subsidy(SALT) was reduced.
Right. Because it effectively raised their FEDERAL tax rates, even though their state taxes remained unchanged.
1. My state income taxes and local property taxes are only deductible up to a $10,000 limit.
2. There is no limit to this deductibility for corporations.
Think about #2 for a second. So now you have people in states like New Jersey and Connecticut working with their accountants to figure out how to set up a corporation to own their home and live there as tenants. So they can deduct not only their full property taxes, but also every penny in utility expenses, maintenance, and even property depreciation.
I have already declared that corporations should have their deductions scrapped.
Each state must be accountable and responsible for their own STATE tax burden.
That is in my mind one of, if not the key issue related to this thread. All fifty States are in hock to the Fed, to the tune of 30 percent. That is the amount every state receives back from the Fed base on their Federal tax obligation. Some more some less but around 30 percent welfare payment, or return on investment if you consider Federal income taxes an investment.
In other words no state is completely responsible for their own State taxes. In my mind that makes them all welfare States. If they were truly responsible they would be self supporting without a third of their support coming from the Fed.
...and the bottom line to make it right, State citizens pay their State first, and what remains can then support the Fed. The State pays, not individual people sending money earned in a State directly to the Fed coffers. Thus the State is back in control and the bureaucracy saddled with sending money back to States where it originally came from can be severely curtailed.
I would find that statement hard to believe. Individual and corporate income taxes account for less than 60% of the Federal government’s revenue, so it seems unlikely on its face that this statement could be true.
If I remember the numbers from one of the studies in a link on this thread, we are only dealing with less than 15 percent of the total Fed income being returned to the States. The number was around 600 billion actually returned. So I could very easily see it as a true number. The real answer might be hiding in the total amount individual taxpayers contribute to the Fed.
As you and others have stated, it is a very complicated subject, that perhaps should be greatly simplified.
It's true that the Federal government actually pays very little money to State governments. But the Federal government pays enormous piles of money to individuals in the form of wages, benefits, Social Security payments, Medicare, etc. When you see a comparison of Federal taxes paid vs. Federal expenditures in any given State (like the list I show in Post #97), the "Federal expenditures" for a State include all of the payments made to individuals who live in that State.
Excellent point the expenditures my esteemed Senator calls on autopilot. They happen whether there are tax cuts, government shutdown, or attempts to contain Federal spending.
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