Re:Show HN: Effects of House and Senate Bill on California R...
by dragonwriter on Wednesday December 06, 2017 @05:58PM
(#15865945)
> Say what you want about the tax bill on net, the elimination of the SALT deduction is very good for the country.
No, it's very bad.
> There is zero reason for the Feds to subsidize and distort incentivize to encourage states to increase their tax burdens.
That seems like a reasonable position, but SALT doesn't do that; quite the opposite, it keeps federal taxation neutral in terms of incentives for state and local taxes. Not deducting state and local taxes distorts incentives by creating a federal tax disincentive to state/local tax-funded programs that produce a net economic gain. I've written up a simplified scenario illustrating this in a recent prior discussion on HN:
Re:Show HN: Effects of House and Senate Bill on California R...
by hirsin on Wednesday December 06, 2017 @05:58PM
(#15865946)
Could you go into more detail here? Corrupt in what way? I haven't really heard this claim before, and the general idea that you shouldn't be taxed on non-discretionary income (e.g. buying milk, clothing, and paying taxes that make your schools and roads work) seems sound on the face of it.
There is zero reason for the Feds to subsidize and distort incentivize to encourage states to increase their tax burdens. SALT has always been one of the most corrupt tax breaks (mortgage interest being another).