Residents of states that voted for Trump are largely rewarded, while many residents of Blue states are punished. This outcome is due to the cap on federal income tax deductions for state and local taxes (SALT).
Let’s be accurate here.
- First off, unless you itemize, you don’t get to take a SALT deduction. Only about 30% of Americans itemize, and although there are a couple of special cases, it’s the richest 30% of Americans. So, let’s be clear: we are about to discuss a tax deduction that only the rich take, pretty much.
- Further, if you’re in that top 30% of earners and you do in fact itemize, you’d have to be pretty far up that “rich” scale in order to be taking a deduction that’s over the cap. Probably in the top 10% of all wage earners.
- So, what’s happening here is that the Democrats, who usually gripe because the rich aren’t paying their “fair share”, are now griping because the rich are being asked to pay their fair share. :-)
But residents of New York, California, and other states with high SALT are already in effect subsidizing residents of many Red states.
Yea. That’s kind of how it works between industrialized and agricultural states. Agriculture is not high on the value chain, while manufacturing and technology are. So, it’s pretty much a world-wide phenomenon that industrialized areas subsidize agricultural ones. We don’t HAVE to do it that way……but I don’t recommend it. It sucks to go without food.
In figures from WalletHub based on 2017 data from USAspending.gov and the IRS, New York gets back 56 cents on every dollar it pays in federal taxes and California, 64 cents. In contrast, North Dakota gets $7.79, South Carolina $3.07, and Alabama $2.46 for every dollar sent to Washington, D.C.
Damn. Sounds like the politicians from N.D., S.C., and Alabama are a helluvalot smarter than the ones from California and New York. :-)
After just a few months of feeling the power of the Presidency when Trump announced his intention to withdraw from the Paris Climate Accord, states like California and cities like New York began to develop in effect their own foreign policy regarding climate change. That’s what independent countries do!
It’s also what a federalist republic does. As a small government conservative, nothing excites me more than seeing, for example, cities, counties, and other districts raising minimum wages, without waiting around for the federal government to provide them political cover. It’s an example of a return to federalism that is long overdue.
As for Presidential politics, 51 percent of the population, represented by the 10 most populous states, have just 44 percent of the Electoral College.
Oh, good God. The Electoral College was just fine when there was a “Blue Wall” that was going to prevent another GOP President from happening, well, forever.
What is to be done? Calling a New York or California referendum on independence, not unlike the hangman’s noose, would surely concentrate all the best minds. Perhaps even more attention-getting would be if the 65 million Hillary Clinton voters followed the proposal by Mark Weston, author of The Runner-Up Presidency, to put their federal axes in escrow until the antiquated Electoral College is overhauled.
I don;t know who Weston is, but he evidently doesn’t know that the IRS has the power to sieze your assets.