“If your tax bill is $1000 and you take a $200 deduction then you pay $800.
If your tax bill is $1000 and you get a $200 subsidy then you pay $800.”
That’s a perfect example Megan.
In the first case, I pay $800 because the government has collected only $800 from me. Nobody else pays anything.
In the second case I pay $800 because the government used $200 it collected from somebody else to make up the difference in MY bill. The government still got their $1,000.
They got $800 from me and forced somebody else to pay $200 on my behalf.
“They got $800 from me and forced somebody else to pay $200 on my behalf.”
And in the case of how SALT impacts Federal taxes that someone else who pays the $200 is my family because we live in a state where we don’t get the same value of deduction as you do.
So if you and I make the same amount of money then you pay less in Federal taxes than I do due to the SALT. And the Federal tax I pay makes up the difference that you don’t pay.