The New York Times reports that many state governments are concerned that the Republican tax plan will hurt them: Of primary concern is the Senate’s plan to repeal the state and local tax deduction….The tax break is claimed by people across the nation, but is more heavily utilized in higher-tax states like Oregon, California, New Jersey and New York. Eliminating the deduction has long been a goal of many Republican lawmakers, who view the tax break as a subsidy that poorer red states provide to richer blue ones that spend heavily on government services. This is tiresome as hell. I don’t begrudge the fact that poorer red states tend to receive more in government benefits than they pay in taxes. Nor do I begrudge the fact that it’s mostly richer blue states who fund this state-level social welfare. That’s how things should work. But I do begrudge Republicans weaponizing the tax code against liberals with sanctimonious lies about how red states are subsidizing blue states. Via the Tax Foundation, here’s the truth: The biggest takers in the nation are almost all red states. The biggest net givers are unanimously blue states. Now, this chart is from a study done in 2005. Although I doubt things have changed a lot since then, it’s unfortunate that the Tax Foundation doesn’t have more recent data. Their website says they are “currently seeking funding to update this study,” but apparently none of their conservative donors are much interested in that. Odd, isn’t it? Maybe George Soros should step up to the plate. However, the Tax Foundation does have a recent study that looks at how much state budgets rely on federal aid. Here it is: Once again, the top takers are almost all red states, while the most self-reliant states are almost all blue. Any way you slice it, blue states heavily subsidize red states when it comes to federal spending. Can’t we at least be honest about this much? http://www.motherjones.com/kevin-dr...ap-about-red-states-subsidizing-blue-states/#
Mother Jones? Really? What a lie. Fact is Red states are subsidizing Blue states via the tax deduction. Just like renters are subsidizing buyers via the mortgage deduction. If those Blue states want more in Govt services, then they should pay for them.
What's wrong with MotherJones? Is there any inaccuracy in what they cited? And how are tax deduction subsidizing blue states when even after those deductions, blue states still pay in more than they receive? Your entire argument is based on faulty math and blatant logic error, blue states are NOT getting more government services, in fact they are receiving much less for what they paid for because red states refuse to tax their own states for their own expenses and instead rely on federal government to mooch of.
It does not change the fact that by allowing these deductions, anyone who doesn't take the deduction is subsidizing those that do. It doesn't matter what the deduction is for. Why do you think the author made the comparison he did? It's the only way he could make his point, as convoluted as it is. He has to compare total state Federal spending. He can't argue on the merits of the state tax write off by itself. He would lose the argument and he knows it. Lets take funding for mass transit. All the states that get funding for mass transit (nearly all Blue) are subsidized by states that don't get mass transit funding (nearly all Red). You can probably find any number of comparisons to make the point for either side...Red subsidizes Blue, or Blue subsidizes Red. It's how things roll. Btw, MJ is a left wing, partisan rag. Just like Breitbart is a right wing, partisan website.
"Net Federal Spending Per Dollar of Taxes Paid" What complete nonsense. Let's only count Social Welfare spending and not the spending on all the items that many red states don't want such as Military Bases. Red states are regularly forced to subsidize military bases; they cannot collect state/local tax on the military base land, must provide education for the children of the military members, and must provide all the infrastructure roads, water, sewer, etc. for the bases. Counting military bases (which are in many cases totally unwanted) as part of net federal spending on a state is absurd. Likewise counting federal parks, land, etc. as net federal spending is absurd. Why don't we limit the accounting to social welfare spending --- in which case red states are not takers compared to their blue cousins. While we are at it let's move all the military bases to blue states and put them in places where they take up valuable real estate and constrain further development. The original Mother Jones article that started this thread is one of the most biased and absurd pieces on taxes and red/blue states printing in recent history.
If they are making that choice then so be it, almost all are taking the deductions and receiving less for what they are paying for. The author made that comparison because Republicans were lying, look at what he was quoting. He wasn't arguing for merits of anything, he was pointing out to the lie. Finally, regardless of the state and local taxes, blue states will continue to subsidize poor red states, how does getting rid of these deductions achieve equality. I would need numbers for your mass transit subsidy to take it seriously.
This is the typical spin, resorting to military spending as a factor when it's the low tax base of uneducated workers that causes the disparity. I have citations if you want.
This is no different then subsidizing corporations via reduced tax bracket or increased deductions, so why the hypocrisy?
And farm subsidies. https://www.economist.com/news/unit...mers-grow-subsidies-instead-milking-taxpayers https://www.cnbc.com/2017/06/01/far...et-cuts-has-agriculture-industry-worried.html