3 ms·

The SALT deduction was in place because people are being taxed TWICE. It's very simple. They are taxed on their income by the state, then taxed on that same inc

The SALT deduction was in place because people are being taxed TWICE. It's very simple. They are taxed on their income by the state, then taxed on that same income by the feds. It's unjust. You can argue all day long who the tax impacts, and how they're all rich or whatever, but that doesn't change this simple fact. What astonishes me is the abject lying happening by folks such as the Heritage foundation. Check out this obviously false statement: "Double taxation occurs when the same income source is taxed twice by the same level of government." Huh?? What does the level of government have to do with anything? How about this gem: "Double taxation does not occur when your income is taxed at the state level to pay for state projects and again by the feds. Taxes at all levels of government should be lower, but this does not mean the federal government needs to subsidize state taxes and spending." Really?? It's astonishing to me how these people lie, then lie some more, then fabricate with straight faces. Check it out: https://www.heritage.org/taxes/commentary/5-myths-about-the-state-and-local-tax-deductions-cap https://www.heritage.org/taxes/commentary/5-myths-about-the-...

tacitusarc 5y ago
It's not clear to me why the federal government should accommodate the state taxation structures. That is, uncapped deductions effectively mean that federal taxes are applied after state taxes. Couldn't states provide a deduction based on federal taxes if they think this is unfair to residents?
- dragonwriter 5y ago
  > It's not clear to me why the federal government should accommodate the state taxation structures. There is potentially an argument for no SALT deduction, though I think a lot of factors (including federalism) weigh in favor of it, and that it is on-balance justified; its something on which there is reasonable disagreement. But that’s not the debate. The debate is between a limited SALT deduction designed to create federal pressure to force the more successful states to adopt tax and spending policies more like the least successful states, and an unlimited SALT deduction that lifts the federal governments thumb off state tax policy.
disgrunt 5y ago
The real hypocrisy is Congress only cares when the rich are double taxed. Double taxation happens all the time. Corporate taxes and personal taxes on the same income source, personal income tax and sales tax, etc.

tacitusarc 5y ago

It's not clear to me why the federal government should accommodate the state taxation structures. That is, uncapped deductions effectively mean that federal taxes are applied after state taxes. Couldn't states provide a deduction based on federal taxes if they think this is unfair to residents?

dragonwriter 5y ago
> It's not clear to me why the federal government should accommodate the state taxation structures. There is potentially an argument for no SALT deduction, though I think a lot of factors (including federalism) weigh in favor of it, and that it is on-balance justified; its something on which there is reasonable disagreement. But that’s not the debate. The debate is between a limited SALT deduction designed to create federal pressure to force the more successful states to adopt tax and spending policies more like the least successful states, and an unlimited SALT deduction that lifts the federal governments thumb off state tax policy.

disgrunt 5y ago

The real hypocrisy is Congress only cares when the rich are double taxed. Double taxation happens all the time. Corporate taxes and personal taxes on the same income source, personal income tax and sales tax, etc.