ItnStln

This. As you said, my suggestion is for the states to stop sheltering their wealthy at the expense of other states.

Airhoss

He so busy riden with uhmmm…you know.. the thing? Come on man!

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.

ThumbsUp

Actually the individuals are, the economies are not. I certainly hope that example is made up, BTW,

hummingbear

Wrong. CA residents collectively receive less money from the federal government than they pay in federal taxes. So mathematically speaking, while some individual CA taxpayers are certainly receiving more than they contribute, that money is coming from other CA taxpayers- not outside of the state. KY residents on the other hand receive more federal dollars collectively than they pay in. So some of that money has to come from states like CA that operate at a surplus. In general, federal money flows from high income blue states into low income red states.

Andy

Please post a citation for that statement.
In the past, all the 'who gets more federal bucks' always, always, always has included military, national park, and other miscellaneous federal spending in each state. Those numbers got very bent when, a couple of decades ago, CA pushed to have most of their military bases closed.
When military spending is included, military bases located in low cost areas survived the last BRAC much better than military bases in high cost areas.
Bottom line on such stats (which states get more money) is that figures don't lie but liars can figure.

ThumbsUp

You're still conflating two issues. One is individual taxes, the other is a totality of taxes taken in from all sources by a state. CA actually takes in more federal funding than they supply to the fed via income taxes, but at a lesser amount than a state like KY. The problem is that how that is apportioned out of federal $$ is programmatic, so comparing the two is not apples to apples. For instance, Virginia gets a hugely disproportionate amount of federal money per capita because of the defense budget. The amount of geography neutral (people programs) items like welfare, medicaid, etc are pretty even expenditures per capita across all states, although they tend to be slightly higher in blue states. Someone paying taxes in KY who makes the same amount of money as a person in CA is underwriting these common expenditures because of CA-local decisions to tax their residents for programs in which the KY resident has no say.

ItnStln

But the high income tax states do shelter individuals from paying their share of Federal taxes through SALT deductions.

ItnStln

Indeed, and taxation is theft!

detpilot

Wouldn't it be more like extortion, since you're aware of the money being removed from your coffers?

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