I am commenting upon the claim that CA pays out more in federal income taxes than they get back. That is partially because they can deduct their high state taxes from their federal tax. Which in effect is a subsidy for their high taxes that persons with lower state taxes do not get. So yes, at that level, it is a subsidy by the feds of high state taxes. And that is the issue many conservatives have with the SALT deductions.
No, lower tax states can still deduct their state, local, and property taxes now, whatever they are.
Arguing that filers that have already paid high taxes, and their deduction is larger because they are avoiding having to pay more taxes on taxes they just paid is somehow "unfair" is ludicrous. And, as has been said time and time again, without the Federal tax revenue of NY, CA, NJ, CT, and other high tax states, the treasury would implode.
And whatever state you are in, you can still deduct them - for now. That is all about to change, because the GOP has sold us out. They are taking care of businesses and corporations, not their voters.
The G.O.P. Tax Plan Has a Fatal Flaw—and Neither the House Nor the Senate Can Fix It
Donald Trump’s top economic adviser, told CNBC’s John Harwood that the President had laid down “two really important principles” to guide the lawmakers and officials putting the legislation together. “Number one is we have to deliver middle-class tax cuts to the hardworking families in this country,” Cohn said. “Number two, our corporate tax system just is not competitive with the rest of the world. We have to create a corporate tax rate, and along with that a pass-through tax rate, that makes us competitive with the rest of the world so we can attract businesses back to the United States.” Yet since last week, when Paul Ryan and the House Republicans released their tax plan, it’s been clear that Trump’s two principles have run into conflict with each other. Or, rather, these principles have run into the laws of arithmetic, and the fact that there isn’t enough money in the Republicans’ own budget, even using the fuzzy fiscal math the Party favors, to provide big giveaways for all businesses and all households. Something had to give, and between businesses and households, House Republicans went with the businesses. From what we’ve seen of the Senate bill, so far, it does the same.