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:
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:
https://news.ycombinator.com/item?id=15855955