5 ms·
The SALT deduction was a handout to the most affluent and a subsidy to the wealthiest states. It allowed them to increase their state and local taxes at the exp
by dahdum 8y ago
The SALT deduction was a handout to the most affluent and a subsidy to the wealthiest states. It allowed them to increase their state and local taxes at the expense of federal revenue, spreading that burden across the country.
The tax plan certainly had flaws, but capping SALT was egalitarian IMO.
- deleted 8y ago[deleted]
- noobermin 8y agoSpreading that burden to states which have a negative contribution to the fed? The states that utilized SALT on net contribute more in tax to the fed gov't than they take in spending.
- dahdum 8y agoWhen California raised their income tax several years ago, they reduced federal revenue because of SALT. For example, $1 billion in new state taxes would reduce federal revenue by ~$300 million. That shortfall must then be covered by the whole country.
- JumpCrisscross 8y ago> That shortfall must then be covered by the whole country. When Mississippi cuts benefits for its residents, my federal tax dollars pay for their disability insurance. When West Virginia fails to regulate its industry, educate its residents or build infrastructure, my tax dollars subsidise their choices. TL; DR It is odd to talk about subsidy when they generally flow from those hit by the SALT cap to those benefiting from this bill.
- dahdum 8y agoI don't understand what you're arguing for here, why should affluent CA/NY/CT tax payers receive a tax break paid for by everyone else? How would you argue for the SALT deduction if it never existed in the first place? I also don't see why it's a problem that some states are donors, they have more to give. Federal spending should be progressive, otherwise it simply drives more inequality.
- JumpCrisscross 8y agoI won't argue for SALT per se. I do have an issue with the political logic the Congress used in singling out Democratic states. Furthermore, the bill as a whole was regressive. Arguing for the progressive lifting of a specific subsidy, within the general context of a regressive bill that increases interstate subsidies, is hypocrisy. So is requiring food stamp recipients to undergo a battery of expensive tests while their analogs at governmental level get increased handouts.
- dahdum 8y agoI don't think I'm being hypocritical for defending a good policy in a bad bill.
- JumpCrisscross 8y agoQuite fair--my apologies.
- einarvollset 8y agoYou can certainly convincingly argue that, but to retain a coherent argument you also now need to tell me how it’s egalitarian that all the states hit by this overwhelmingly contribute more to federal tax coffers per capita (and hence are subsidizing) the states where the $10k cap will have no impact.
- dahdum 8y agoSame reasoning actually, they contribute more because they have more. Federal income tax is per person and progressive, so states with wealthier residents will always pay more. Even a flat tax wouldn't change that.
- closeparen 8y agoWhat does it mean for a state to be affluent? The goods and services governments purchase are presumably purchased in their local markets. It’s not as if a $60k New York police officer or bureaucrat stops more crime, pushes more paper, or lives better than his $30k counterpart in Alabama. It’s not as if a public housing project that builds 10 efficiency studios at $500k each represents a higher level of public service than one that provisions 10 $50k mobile homes. I agree that certain areas have higher and lower concentrations of genuine wealth but a progressive income tax curve already takes care of that. SALT was more like a crude approximation of a cost of living adjustment.