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Tax money flows that way because blue states are home to more wealthy citizens than red states, which are home to poorer citizens. Federal social programs tend

Tax money flows that way because blue states are home to more wealthy citizens than red states, which are home to poorer citizens. Federal social programs tend to do just that, what a shocker. What SALT did was to give those wealthy citizens in blue states a tax break on their state's social programs and replace those funds with federal tax dollars coming from others.

tolmasky 4y ago
There are plenty of poor people in these “wealthy” states. It’s not all just wealthy people that live in California, what a shocker. There are 40M people in California, I wouldn’t be surprised if there were more poor people in absolute terms in California than, say, Mississippi with a total population of less than 3M. The “state welfare” programs that are for some reason maligned (whereas Federal welfare programs aren’t for some reason) largely go to help poor people in these states. That’s my point about balancing: I’m not saying either is necessarily good or bad, both are trying to theoretically help people in need. SALT allows CA more wiggle room to help it’s own poor given that it is net negative on Federal money out vs. in (in part because people think that that somehow magically means everyone is fine there).
- bitshiftfaced 4y ago
  The difference is that California's state programs are there because California voters approved of them, more or less. California also has representation when it comes to federal programs. However, the states from which federal tax dollars subsidize California state programs through the SALT deduction do not have representation when it comes to California's state programs.
  - tolmasky 4y ago
    Those states however have disproportionate representation in both the House and Senate. So it’s not as simple as one having a say and the other not. Additionally, SALT isn’t exclusive to CA, any state with income taxes benefits from it (and most states do have income taxes). I think if you were to zoom out to the country level in a hypothetical international tax sharing scheme, where the voting mechanics were similar to the Senate and House, you’d probably flip sides, thinking of course it makes sense that a country should have some flexibility to protect its revenue (while still for the record delivering the highest contribution) vs. having a vote that isn’t really representative of its population nor contribution to some international tax pool. Because again, even without SALT, these states were often still providing the largest contributions, and often paying the highest taxes. This was fairly obviously a vindictive move here, that passed in the same bill that had massive wealthy tax cuts. It’s not like this money was now “finally able to get to the poor citizens of wherever” or something.
    - bitshiftfaced 4y ago
      > Additionally, SALT isn’t exclusive to CA, any state with income taxes benefits from it (and most states do have income taxes) Many states have income tax, but prioritize low taxes and spending. Those states don't see as much benefit from the SALT deduction. And make no mistake, when it comes to SALT, the real winners are the wealthy, not the poor.
      - tolmasky 4y ago
        > when it comes to SALT, the real winners are the wealthy, not the poor. Right, which is why it happened parallel to the wealthy tax cuts. This "protected" that constituency from the effects of removing SALT (plenty of high earners in CA still ended up ahead if I recall correctly), went largely to offset other tax cuts (meaning no meaningful "programs benefits"), and thus ironically enough arguably negatively affected the middle class beneficiaries the most -- the kind of people that would have most benefited during specific rare events, for example when selling their home.
  - deleted 4y ago
    [deleted]

tolmasky 4y ago

There are plenty of poor people in these “wealthy” states. It’s not all just wealthy people that live in California, what a shocker. There are 40M people in California, I wouldn’t be surprised if there were more poor people in absolute terms in California than, say, Mississippi with a total population of less than 3M. The “state welfare” programs that are for some reason maligned (whereas Federal welfare programs aren’t for some reason) largely go to help poor people in these states. That’s my point about balancing: I’m not saying either is necessarily good or bad, both are trying to theoretically help people in need. SALT allows CA more wiggle room to help it’s own poor given that it is net negative on Federal money out vs. in (in part because people think that that somehow magically means everyone is fine there).

bitshiftfaced 4y ago
The difference is that California's state programs are there because California voters approved of them, more or less. California also has representation when it comes to federal programs. However, the states from which federal tax dollars subsidize California state programs through the SALT deduction do not have representation when it comes to California's state programs.
- tolmasky 4y ago
  Those states however have disproportionate representation in both the House and Senate. So it’s not as simple as one having a say and the other not. Additionally, SALT isn’t exclusive to CA, any state with income taxes benefits from it (and most states do have income taxes). I think if you were to zoom out to the country level in a hypothetical international tax sharing scheme, where the voting mechanics were similar to the Senate and House, you’d probably flip sides, thinking of course it makes sense that a country should have some flexibility to protect its revenue (while still for the record delivering the highest contribution) vs. having a vote that isn’t really representative of its population nor contribution to some international tax pool. Because again, even without SALT, these states were often still providing the largest contributions, and often paying the highest taxes. This was fairly obviously a vindictive move here, that passed in the same bill that had massive wealthy tax cuts. It’s not like this money was now “finally able to get to the poor citizens of wherever” or something.
  - bitshiftfaced 4y ago
    > Additionally, SALT isn’t exclusive to CA, any state with income taxes benefits from it (and most states do have income taxes) Many states have income tax, but prioritize low taxes and spending. Those states don't see as much benefit from the SALT deduction. And make no mistake, when it comes to SALT, the real winners are the wealthy, not the poor.
    - tolmasky 4y ago
      > when it comes to SALT, the real winners are the wealthy, not the poor. Right, which is why it happened parallel to the wealthy tax cuts. This "protected" that constituency from the effects of removing SALT (plenty of high earners in CA still ended up ahead if I recall correctly), went largely to offset other tax cuts (meaning no meaningful "programs benefits"), and thus ironically enough arguably negatively affected the middle class beneficiaries the most -- the kind of people that would have most benefited during specific rare events, for example when selling their home.
- deleted 4y ago
  [deleted]