So any deduction that one person takes that another cannot take is a subsidy from the latter to the former?
I see if that way. If one group pays more they are covering those that pay less. Just like with social security payments - those paying in the most get a smaller percentage back and they subsidize those paying less who get all of their money back plus extra.
Those getting the EIC credit are subsidized by those actually paying taxes.
The issue of state taxes is unrelated to federal tax. They should each stand separate, particularly so blue states are forced to take responsibility for over taxing their citizens.