![\"https:\/\/commons.wikimedia.org\/wiki\/File%3AMoney_Cash.jpg;](\"https:\/\/wp-media.patheos.com\/blogs\/sites\/533\/2016\/10\/Money_Cash-1024x681.jpg\")
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or, \u201cWhy Democrats should oppose the state and local tax deduction.\u201d\u00a0 (Part I in commentary on the GOP tax reform.)<\/p>\n
After much debate and many news reports on the topic, the current GOP tax proposal includes a cap of $10,000 on state and local tax deductions \u2014 that\u2019s state income taxes, local property taxes, sales taxes as an alternative for states without an income tax, and the like.\u00a0 And while we were waiting for the announcement, there was much moaning about how the prior suggestions to eliminate the deduction entirely were a way of punishing \u201cblue states\u201d which were higher-tax states.<\/p>\n
But it seems to me that one\u2019s perspective on these taxes is dependent heavily on one\u2019s perspective of government.<\/p>\n
Is government \u201cjust another word for the things we choose to do together\u201d?\u00a0 (That quote has been so thoroughly mocked by conservatives that I cannot find the original source any longer \u2014 readers, if you know, I\u2019ll update the post.)<\/p>\n
Are the decisions a given state makes on how well to fund its universities, for instance, made collectively, for the greater good of the people of the state?\u00a0 Are questions on school funding (the largest source of property taxes) made by the individuals in that school district, for the benefit of the children, and for their own benefit, by keeping property values up and undesirables away?\u00a0 Do the individuals in a given high-tax state, through their representatives, choose to spend more generously on social welfare programs such as Medicaid or other healthcare spending, childcare benefits for the poor, universal preschool, and the like?<\/p>\n
Well, then, these decisions to assess high tax levels, are similar to charitable giving \u2014 giving from your income to support the greater good, or (parallel to wealthy school districts) to indirectly benefit one\u2019s own family (e.g., children\u2019s sports that your kids participate in, your child\u2019s private school).\u00a0 And there are scads of people on the Left who have said that charitable deductions should be scrapped.<\/p>\n
On the other hand, if you believe that individuals have relatively little power to have an impact on state or local (big city) government because it\u2019s too corrupt and those in power are too entrenched due to their corruption, then taxes are subtractions from your income that you have no meaningful control over.\u00a0 And\u00a0the more you believe that the economy consists of Makers and Takers, the more you\u2019re going to feel that your taxes are going to benefit other people, not yourself, even indirectly by improving overall quality of life.\u00a0 In such a case, it seems plenty appropriate to be able to subtract them from your taxable income, because it\u2019s a part of your income that you never had any benefit from.<\/p>\n
In other words, the greater your conviction that state and local governance is truly \u201cby the people,\u201d the more willingly you should accept the elimination of the deduction for state and local taxes.<\/p>\n
And since, in those high-tax states, which tend to have Democrats in power, those same Democrats are happy to defend those taxes as a freely-made decision by the people of those states to tax themselves in return for greater services, they ought to be a-OK with the elimination of the tax deduction, no?<\/p>\n
As always, your Sunday-afternoon thoughts welcome.<\/p>\n
\u00a0<\/p>\n
Image:\u00a0\u00a0https:\/\/commons.wikimedia.org\/wiki\/File%3AMoney_Cash.jpg; By Jericho [CC BY 3.0 (http:\/\/creativecommons.org\/licenses\/by\/3.0)], via Wikimedia Commons<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
or, \u201cWhy Democrats should oppose the state and local tax deduction.\u201d\u00a0 (Part I in commentary on the GOP tax reform.) After much debate and many news reports on the topic, the current GOP tax proposal includes a cap of $10,000 on state and local tax deductions \u2014 that\u2019s state income taxes, local property taxes, sales […]<\/p>\n","protected":false},"author":2209,"featured_media":5466,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[38,774],"class_list":["post-7611","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-tax-reform","tag-taxation"],"yoast_head":"\n