City and state governments don't pay the bills - that's the problems. Any cuts they make will hurt them in elections, so they just kick the can down the road to the next government.
it’s moral hazard
California is no longer a net contributor to the union[1], since SALT reform.
1. https://www.mercurynews.com/2020/04/23/newsom-responds-to-mc...
Also for 4 of the 5 top employers in Texas are oil companies. Oil production is subsidized by the feds. Texas is a taker. They also will all go bankrupt unless bailed out with California tax money.
There is no reason for people in other states to subsidize your California state tax payments with a federal tax break.
maybe think before electing politicians who raise them if youre upset
Funny I never hear the argument from red states "We don't want your federal money for all the poor, sick, disabled, in our state!" considering CA and NY pay WAY WAY more out than they get back in federal money
And it's mostly absurd, because it just looks at net transfers between the states and Feds without realizing who is actually benefitting from that money.
How many small family farms do you think are left in much of the Midwest, who are living high on the hog with government subsidies, as the left likes to imagine?
Is it a transfer to Iowa or Nebraska when the federal government pays out a few billion in farm subsidies, which then goes straight into the pocket of fund managers in Manhattan, sovereign wealth funds, or megacorps who actually own the farms
How bout when Wall Street got bailed out in 2009 to the tune of hundreds of billions of dollars? Do we count that as a subsidy to New York, Jersey, and Connecticut?
Even if the money was paid back, there's no way to calculate the trillions of dollars citizens of other states lost due to perpetually low interest rates or propping up houses in coastal areas at the expense of people living in low COL areas.
There's a dozen other ways we can measure these types of back door transfers, and I guarantee you, it ends up that those blue coastal states are getting a lot of extra subsidies that the silly stats that you guys use ignore.
It's just progressive taxes applied to the entire country, where NY and CA are "the rich" among the states.
After all, a staunchly republican poor individual in CA/NY still gets the same benefits as a poor democrat, because need (not opinions) dictates how much you get. Of course, Texas isn't exactly poor, my point is more relevant to states like South Carolina, Louisiana etc.
It is also kind of shocking to see how many employees actually work for city and state governments. And of course government workers have a strong reputation for not being incentivized to work very hard or do more than the bare minimum. I would think the bigger opportunity would be to reduce the size of local government payroll rather than lower everyone's salaries.
Related thought - I wonder, why aren't city and state governments more at the forefront of automating menial work away, given the perpetual costs of each worker on the pension system? It seems they'd have a lot to gain from it.