4 ms·
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
by entee 11y 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 11y agoIf you work in Silicon Valley you almost certainly are subject to the AMT and, therefore, cannot deduct state income taxes.
- mtanski 11y agoIf 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.