Posted on 05/17/2018 4:17:01 PM PDT by re_tail20
Before the ink was dry on our new tax bill, outraged blue states were screaming about the cap on the deductibility of state and local taxes. Their governments were also frantically seeking ways around it, and small wonder. For decades, high-tax states with a lot of wealthy residents enjoyed a hefty subsidy from the rest of America. Legislators were understandably panicked over what voters might do when handed the rest of the bill.
That panic generated some desperate ideas. The most popular, currently, is allowing people to convert tax payments above the $10,000 cap into a "charitable donation." New York, New Jersey and Connecticut have already passed laws to allow this.
While charmingly innovative, this approach is likely to fall afoul of tax courts, as will the other proposed tactics. Blue-state taxpayers may finally have to confront the full cost of the government they want. And Democrats will finally have to confront the tension between what those voters want government to do and what they're willing to pay for.
That reckoning is long overdue.
Remember the Bush tax cuts, first passed in 2001? A heartless giveaway to the rich that did nothing for the middle class, Democrats said. But when their expiration date approached, President Barack Obama called for raising taxes only on families making more than $250,000 annually — that being, apparently, what it now takes to call yourself "rich."
This absurdity is no accident. It's a function of the ideological beliefs of the Democratic activist base clashing with the geographic and demographic distribution of their voters.
Over the past few decades, the United States has undergone "the Big Sort," the clumping of the electorate into demographically, professionally and politically homogeneous neighborhoods. Hillary Clinton voters have their ZIP codes, and Donald Trump voters theirs, and ever more rarely do...
(Excerpt) Read more at chicagotribune.com ...
State taxes should be the responsibility of state residents, just as county taxes should be the responsibility of the county residents.
May be from the Tribune, at the bottom says Washington Compost
I don’t know of a single state that has no state taxes. They may not have a state INCOME tax, but they sure as hell collect a lot of money through other forms of taxation.
This will only be temporary for most of them, though. These people pay accountants to figure out to get around these taxes, even if it means setting up a phony "permanent residence" in a state with no income tax.
What they care about is illegal immigrants work for pennies. A steady supply of new illegals keeps them desperate and compliant.
They use taxpayer money to supplement wages of their new slave class. In this way individually they can pay low wages and everyone collectively carries the burden of welfare programs.
Since they can't bring people in chains anymore, they created a new system of slavery which makes liberals look like champions of immigrants.
It's exploitation of the desperate disguised as liberal compassion.
How about other tax deductions that are still in place -- and still effectively "subsidize" high-tax states? For example, how about a business that still gets to deduct 100% of its state and local taxes ... even though people cannot?
Figured that was redundant and obvious.
Medicare and Social Security are two Federal revenue and spending line items that should be eliminated from the calculation entirely. The problem with them is that the revenue and the benefits are associated with individuals regardless of where they live. So if you work most of your life in a state like Connecticut with a high cost of living, and then retire to a place like Florida or Arizona, you end up collecting these entitlements in a different state than the one where you worked when you (and your employer) paid these payroll taxes.
No they didn’t. If they paid $1 million in states taxes and owed $2 million in Fed tax, they were able to deduct the $1 million they paid to the state, and thus paid only $1 million of their fed tax.
Now they have to pay their $1 million in state tax, and the whole $2 million they must pay now.
That is a total of $2 million before the new tax law, compared to $3 million they pay under the new tax law.
How is that the same?
I don't care what "flows back," either. But the author made the point about some states subsidizing other states ... and you can't possibly figure out who is getting subsidized unless you factor this into the analysis.
Because anyone who pays that much in Federal income taxes is already paying far more than their "fair share" to begin with -- regardless of whether their Federal tax bill is $1 million, $2 million or $3 million.
Excuse me, but Texas is not a high state tax state
OOP, sorry, I meant New York.
My bad
It is a subsidy.
Are you one of the architects of common core math?
True. Try telling that to the Nissan execs that moved to Nashville with the company from Cali. No payroll tax, but an income tax on investments. Property taxes are local and go mainly to schools. People bought mansions in the area for pennies on the dollar compared to California. No reason for any state to deduct state taxes from federal
And if the citizens of states with no incometax got to deduct their eequivalent sales taxes or whatever, then they would be equivalent and there would be no argument.
Game, set, and match.
I agree.
The Federal Government has expanded itself over the years and gained control of many functions that should belong to the states by using grants and subsidies as hooks.
One of the aspects of President Trump I am the happiest with is his stated desire to return power to the states. Better 50 laboratories working on solutions to operate more efficiently than one wasteful self perpetuating bureaucracy imposing flawed policies from afar.
POTUS has taken steps to follow through on this campaign promise and the end to involving the Feds in State Taxation is one big step.
That is wrong as well.
If this figure was $12,850 for "high-tax blue state" like New Jersey, or $13,800 for Connecticut, etc. -- even WITH the state/local tax deduction in place -- then how can you possibly claim that these states are being subsidized by "red" states like Alabama ($4,900), South Carolina ($4,700) or Mississippi ($3,900)?
What kind of math are YOU using?
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