Under a federalist, state-first system, the federal government shouldn’t consider mandated transfers to state (including administrative subdivisions) government which plays the primary role in the conditions of local commerce which enables income as part of the free income of a taxpayer subject to taxation (this also avoids federal taxes altering the calculus of net benefit in state democratic decisionmaking on tax and spending.) In a federal-first, centralized system, ignoring state taxes consistently makes sense. In either case, a limited SALT deduction has no principled justification, and is simply an effort to use the power of federal tax policy to put a federal thumb on the scales of state decisionmaking to get the successful states whose economic success makes them net contributors to the federal government to adopt tax and spending policies more like those characterizing the politically-overrepresented but less successful states that are net drains on federal resources, leveling the playing field by making every place suck equally, so at least the former can’t make the latter look so bad any more, while advancing the Norquistian vision of shrinking the size of government to where it can be drowned in a bathtub, without concern for thr consequences, because ideology.
Re:Evidence from leaked account data on how elites use offsh...
by cortesoft on Saturday May 08, 2021 @05:44PM
(#27091016)
SALT is “state and local tax”... you can deduct state and local taxes from your federal taxes, but a few years ago they put a cap on it so you can only deduct $10,000. This really hurt tax payers in higher tax states.
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Re:Evidence from leaked account data on how elites use offsh...
by PaulDavisThe1st on Saturday May 08, 2021 @07:00PM
(#27091579)
Let's be precise here. It only hurt tax payers whose itemized deductions exceeded the (new) standard deduction of $12k. There were more them in higher tax states because SALT was part of their itemized deduction. It had no impact on tax payers whose itemized deductions were below $12k, or who did not itemize.
Re:Evidence from leaked account data on how elites use offsh...
by ghufran_syed on Saturday May 08, 2021 @05:58PM
(#27091128)
I pay more now because of the SALT cap, but I still support the idea - why should residents of low tax states subsidize residents of high tax states, all other things being equal?
Re:Evidence from leaked account data on how elites use offsh...
by dragonwriter on Saturday May 08, 2021 @07:12PM
(#27091655)
> I pay more now because of the SALT cap, but I still support the idea - why should residents of low tax states subsidize residents of high tax states, all other things being equal?