Originally Posted by hummingbear

This comment is so riddled with misunderstanding of the situation in so few words. First of all, high tax states are not sheltering their wealthy- they are taxing them. Through SALT deductions, the federal government shelters those individuals from a portion of their federal tax burden. The states collect the same amount in taxes from each individual whether or not they are able to claim the deduction on their federal taxes. SALT only indirectly impacts the amount of total state taxes collected to the extent it encourages high tax payers to move into or out of the state, respectively. Thus, while changes in SALT deduction allowances can have significant impacts on the individuals utilizing them, they may or may not have any measurable impact on the financials of the states in question.

Secondly, the narrative of low-income states bearing the financial burden of bloated social programs in liberal havens makes for great outrage porn, but the data doesn’t support that story. In very general terms, red states are the ones getting the most federal subsidies where high-tax blues tend to be the ones bridging that gap.

That’s not to generally champion these states, either- the conversation is far more complex- but this idea that KY coal miners are paying for gender reassignment surgeries of illegal immigrants in CA is just rubbish.