3 ms·

A big chunk of income tax that comes from states with high earners gets redistributed via the federal government to other states. States with wacky politicians,

by mtanski 10y ago

A big chunk of income tax that comes from states with high earners gets redistributed via the federal government to other states. States with wacky politicians, that want to legalize bigotry via laws. On top of that, many of those states actively try to make their resides worse off (not taking free federal money for healthcare). People living in those states keep re-electing the same representatives who vote to make them worse of. As a result of this I've become pretty apathetic politically (yay political tag lines) and in all honestly I stopped carrying what happens in other states. I can't be bother to want things to change there more then people who live there. Everybody gripes about paying taxes, but I would much happier if a big chunk of that federal tax money (non-mutual goal like defense, treaties etc) that gets redistributed instead ended up in local communities (say 50 mile range). Since a lot of people in the area (NYC) could use a leg up, and it's on our own selfish interest to make them successful. Data: https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/ https://wallethub.com/edu/states-most-least-dependent-on-the... Just look at highest X per $ spend on federal taxes. http://www.huffingtonpost.com/2014/03/26/republican-states-most-dependent-government_n_5035877.html http://www.huffingtonpost.com/2014/03/26/republican-states-m...

entee 10y ago
This is true. However it's important to add that state income taxes are deductible on your federal return. While this doesn't entirely offset the imbalance, it does mean that the federal government indirectly subsidizes states with high tax rates (often wealthy+coastal+more to the left politically) in a proportional way. I'm actually glad that in the US this isn't a charged political issue. My family comes from a place where half the country (by region) hates the other half in part because of this kind of tax redistribution. It's not a pretty way to run a country.
- Randgalt 10y ago
  If you work in Silicon Valley you almost certainly are subject to the AMT and, therefore, cannot deduct state income taxes.
  - mtanski 10y ago
    If you work in state without high state / local income taxes you're a lot less likely to trigger AMT. So really the federal government subsidize wealthy residents of those places the most. If you're like a middle class family in NYC where two parents work. One person is a cop (detective) the other person is a teacher both with experience you're prob pulling $100k + $80k + overtime in the cop case. Congrats your family is probably paying AMT every year.
deleted 10y ago
[deleted]
nugget 10y ago
There is definitely a wealth transfer dynamic from blue states to red states, but keep in mind that wealth isn't the only thing needed to keep a country running and some states help in other ways. Red states, for example, send a disproportionately high number of recruits into the military.[1] [1] http://www.ijreview.com/2014/07/158892-military-pride-states-boast-highest-enlistment-rates-america/ http://www.ijreview.com/2014/07/158892-military-pride-states...

by mtanski 10y ago

entee 10y ago

This is true. However it's important to add that state income taxes are deductible on your federal return. While this doesn't entirely offset the imbalance, it does mean that the federal government indirectly subsidizes states with high tax rates (often wealthy+coastal+more to the left politically) in a proportional way. I'm actually glad that in the US this isn't a charged political issue. My family comes from a place where half the country (by region) hates the other half in part because of this kind of tax redistribution. It's not a pretty way to run a country.

Randgalt 10y ago
If you work in Silicon Valley you almost certainly are subject to the AMT and, therefore, cannot deduct state income taxes.
- mtanski 10y ago
  If you work in state without high state / local income taxes you're a lot less likely to trigger AMT. So really the federal government subsidize wealthy residents of those places the most. If you're like a middle class family in NYC where two parents work. One person is a cop (detective) the other person is a teacher both with experience you're prob pulling $100k + $80k + overtime in the cop case. Congrats your family is probably paying AMT every year.

deleted 10y ago

[deleted]

nugget 10y ago

There is definitely a wealth transfer dynamic from blue states to red states, but keep in mind that wealth isn't the only thing needed to keep a country running and some states help in other ways. Red states, for example, send a disproportionately high number of recruits into the military.[1] [1] http://www.ijreview.com/2014/07/158892-military-pride-states-boast-highest-enlistment-rates-america/ http://www.ijreview.com/2014/07/158892-military-pride-states...