Democrats in High-Tax States Plot to Blunt Impact of New Tax Law

State officials are considering legal challenges, looking at other sources of revenue and considering ways to, in effect, restore deductions that the overhaul scaled back.

Comments: 325

  1. As a retiree in a high tax state (New York), my problem is the huge $24,000 real estate tax I just prepaid (literally leaving my financial cupboard bare). None of the ideas mentioned would effect the high real estate taxes many pay. I would urge Gov. Cuomo to reconsider imposing the millionaire's tax he abandoned. They are the big beneficiaries of the tax law receiving an actual 7 percent cut in their personal rate (from 39.6 to 37 percent) as well as other breaks like the estate tax and pass-through income. The income could be used by the state to increase the funds going into public (K-12) education with the understanding that localities would lower their real estate taxes to offset those added subsidies. Another useful idea would be to tax stock transactions with that income also dedicated to public education including the states 62 college campuses which are also being starved of support. Both these ideas would restore some fairness and progressivity which was overturned in the tax bill that shifted over $1 trillion from the middle- class to the wealthiest--many of whom, like our President, reside in New York.

  2. How would the math work, when those adversely affected by those proposals can simply move to a state without those taxes? Any state tax proposal needs to actually work to raise or shift revenue, relocations notwithstanding.

  3. Sorry to burst your bubble. I would bet my last penny that someone who pays $24K in RE taxes is not middle class. You are exactly whom the Dems says should pay more taxes. Why don't you mention spending cuts as answer to your high taxes? You don't think there is fat and waste in NY? Try looking at the Long Island RR. It's famous for the number of employees collecting disability.

  4. I think the true beneficiaries are those who own businesses and can get the pass through rates of 20% ( example Trump). Others such as doctors and lawyers do have to pay the new 37% rate ( but lose the Salt deduction effectively increasing their taxes) in order to enrich people such as Trump. It is clear who benefits society and who is a parasite.

  5. Charitable contributions to settle another obligation are not tax deductible. That one will simply not work. Should people n high tax states be concerned that cutting spending and taxes are not even being considered as an option?

  6. Several states including California have charitable funds which allow people to contribute to say state schools and in exchange get for example a 50% credit on their state taxes. The IRS has ruled these are legal and the charitable contributions can be deducted from The federal tax. The Salt tax proposals are presumably versions of these with 100% credit for state taxes and of course federal deductibility.

  7. And, as this article notes, cutting spending would leave us with further limitations on public services, further starving what local governments can do, What, we now must all look like the awful disaster that Brownback and his cronies inflicted upon Kansas? This awful legislation needs to be completely unwound, but until the dems are in the position of taking back congress, we're stuck with this lemon of a law. Have we become a banana republic yet?

  8. Those of us in higher tax states are willing to pay the higher state taxes for decent education and other vital services, and don't want to move to low tax states where those services are poor. In many cases, are higher state taxes are making up for the defunding of vital services at th federal level. Now the Republican tax bill is penalizing us for being willing to pay for the services that they refuse to fund adequately.

  9. I'm saddened that lowering state taxes is always accompanied with warnings that cuts may be necessary in programs bringing aid to the poor, subway systems, etc. As long as there are sheriffs retiring after 25 years with $250,000 annual pension for life, as long as school superintendents are being paid $750,000 per year and as long as articles like the excellent piece in the NYT on the waste in MTA construction projects have subject material, we just haven't done our homework. A systematic overhaul of finances in our state is our job and one we must complete before howling that there isn't money to give to poverty initiatives.

  10. Did readers notice that NYTimes article where an accountant discovers that there are 200 jobs at roughly $1,000 a day that no one could tell the accountant what these people were doing, and other than a sheepish acknowledgement from the MTA that the waste was real, the politicians stayed away from discussing this. Why: Because the union and the construction companies have lined these politicians election campaign funds with cash, ironically the majority of which comes from abusing the taxpayers by excessive costs. Cuomo and DeBlasio should be ashamed!

  11. That same old tired myth that began with Reagan: the cost of government is so high because of lazy greedy public servants with lavish pay and benefits who retire at 30 on a million dollars a year. Policeman here start in the low 40s and median salary is mid 50s and typical retirement is about 50-60% of final salary. You begrudge someone that who has risked their life for you for 30 years - I don't and I doubt most do. Bottom line, people like you wouldn't do their job.

  12. The reason(s) that taxes are high in certain states is irrelevant. States made decisions about what they wanted to do at the state level, and then the "small federal government" folks in the GOP penalize them for doing so. It is utmost hypocrisy. Yes, in both the short and long terms, states should look hard at possible sources of waste, but that's not the point.

  13. Why am I not surprised? These states, usually the same ones that are or were recently on shaky financial ground, can't stand anything that might rein in their tax and spend habits. One big advantage of discontinuing or limiting the deductions of state income and property taxes is that it lets citizens see more clearly exactly how much tax they are being required to pay. Sadly, our governments have become a masters at camouflaging taxes. That's one reason much of our population thinks cutting business taxes is a bad idea. They haven't stopped to think that business taxes eventually flow down to the individual as part of the price of goods and services. Our governments are money junkies that think they can spend other people's money better than the individual. If you give them more today, they'll just ask for even more tomorrow. Let's not even get into the discussion of how poorly governments manage and spend money.

  14. Cutting taxes has worked oh so well in Kansas and Louisiana. I'm sick and tired of having my federal tax dollars sent to these moocher states. I'm happy with the services I get here

  15. As a scientist my response is, show me the data. CA has one of the premier University systems, funded by state taxes, must support a growing population, and has over the past 8 years run a responsible fiscal program (thank you Jerry) despite drought, wildfires, and malfeasance on the part of the state and national GOP. Let's shut down Long Beach and Oakland ports, which CA subsidizes to a great extent, and see how you enjoy that experience. That's effectively what you all want.

  16. Showing you the data. No state income tax in 3 of these 5 states: Top 5 states for population growth 1980 to 2017 Nevada 274.5% Arizona 158.1% Florida 115.3% Utah 112.3% Texas 98.9%

  17. In response to Mr. Barnes of Connecticut, taking back Congress for Democrats has many good points including improving the tax legislation. Of course, without a sufficient majority to overrule a veto any new legislation would require working with the administration or moderate republicans. Trump seems most interested in what he perceives as "winning" so even he might go along with corrective legislation that he can sign in public ceremony while patting himself on the back. But do take back Congress.

  18. Funny, none of the politicians in these states seem to want to answer the question in their states; why are the taxes so high to begin with?

  19. The answer to why our taxes are high is we care about our schools, public services, our citizens and our environment and as long as much of the country does not, we are forced to pay for these on a local and state level. A more progressive national policy for such matters would be in the interest of the country and actual be fiscally sound.

  20. Bernard, I other words, you expect MA's taxes will remain relatively high, and you want significant increases in Federal taxes.

  21. 1515732 writes, "Funny, none of the politicians in these states seem to want to answer the question in their states; why are the taxes so high to begin with?" Funny, but all of the politicians in these states are answering the question of why taxes are higher than in red states. The residents of blue states demand more services than in red states and are willing to pay for them. Besides, red states get more welfare from the Federal government and need less from their state government.

  22. Rather than circumventing the limits on deductions for state/local taxes with gimmicks to raise other taxes - state and local governments should find ways to cut costs. That's the path to productivity.

  23. That did not work in Kansas.

  24. DCW writes, "Rather than circumventing the limits on deductions for state/local taxes with gimmicks to raise other taxes - state and local governments should find ways to cut costs. That's the path to productivity." You Kansas? How did that work out for them? The "path to productivity" includes a certain amount of taxes. Too little is as bad as too much. The alt-right idea that all government is bad will turn the USA into Somalia. How productive is Somalia, DCW???

  25. No, governments are not businesses that have to meet quarterly profits. Cutting costs reduces services and does not increase profits. There are no profits to be made running a state.

  26. As the article mentions, the new federal brackets will largely negate the limitation of state and local tax deductibility. I would encourage everyone to run their own math instead of relying on sound bytes. What this really boils down to is the ability for state and local governments to increase taxes in the future. Citizens are focused on the issue and the cost of every incremental dollar is higher. It will be challenging to maintain the perpetually-increasing tax environments in NY/NJ/CT. Lawmakers know this, and that's why they're in hysterics. Perhaps there should be a commitment to more efficient spending instead?

  27. Wrong and specious. "More efficient spending" is always a nice goal and prudent. But who defines "efficient" which is subject to what is valued by one group vs. another? Should we allow the Red States to trap us into hasty spending cuts? That spending should always be kept in check doesn't mean that taxation shouldn't be fair and balanced. This new tax bill is a heist by the wealthy, corporations and Red States, pure and simple.

  28. On the flip side of this, how many of our federal tax dollars are transferred to the Southeast and plains states? How about those states providing services for their citizens instead of relying on the Northeastern states and Pacific Coast states to provide the money?

  29. I did the math, and my taxable income is going way up. Plus, my state tax is going up, too, because it is based on the federal filing numbers. The new brackets will have a negligible effect on my federal taxes.

  30. First, the the State and Local deduction limit will have the perhaps unintended consequence of allocating power to the federal government at the expense of the states. Second, Mr. Barnes is right. Keep it simple.

  31. Absolutely, Barnes is correct. We need to retake congress (both houses). However, I laud the pols who are at least looking at other solutions. There is little doubt in my mind that this bill was aimed at liberal, democratic leaning, fairly prosperous states.

  32. I don't mind sharing (more of) my prosperity with folks in poorer states, provided that money goes to infrastructure investments, green energy, improving education, housing for the poor and homeless, health care and education, in short: the common good. I do not want it to go into the pockets of the rich and wealthy corporations who will just sit on it, as is the case with the new tax "reform" heist. I also want a vote in the densely populated states to count the same as a vote in a sparsely populated state - no taxation without representation!

  33. Why not try to be more efficient with taxpayer’s money for a change Edward? Why is everyone so convinced that all the blue states have it “right” and the less blue states and red states are wrong?

  34. and the more kicking, screaming, and keeping this intentional disparity before the public, the better. if you consider the economic contribitions to the national economy of just the high tax (eg, punished) states, I think it would turn out les miserables put in more than half... and not much of it from extrctive industries, either... so one might also consider this a way fe Republicans to expolit creativity. beyond disgusting. thanks, Mitch. thnks, Paul. soon your dreams might come true: we'll all be living in tar paper shacks down the holler as they do in impoverished Kentucky or Alabama, but all will be well because the richest among us will save on taxes and skulk off laughing on the way to the bank in the Caymans.

  35. I believe there is a much simpler, more equitable solution to this problem. Starting in 2018, and completing in 2020, elect progressive Democrats to state and national office that will promise to abandon via repeal this monstrous shift of resources from the middle class to the wealthy. Replace it with an equitable system whereby those who have the most are obliged to return to society a proportionally greater sum in the form of taxes than those who who do not.

  36. Jim, the entire uproar appears to be that richer states and their occupants pay more. Thus, what you propose seems to be exactly what people are opposing!

  37. Not paying more in an equitable way--the wealthy in those high tax states will fund was to circumnavigate the tax bill.

  38. Yes go for it, no Dem stands a chance around here.

  39. Any family that pays $30,000 per year in state income tax is also subject to the AMT and wasn’t getting their SALT deductions anyway. As a NJ family that pays more than $36,000 per year in SALT and then pays $9,000 to the AMT, I can tell you we don’t get any deduction. However. With this new tax plan and the changes to the rates combined with the modifications to the AMT we may pay $12,000 less in 2018. That is $12,000 we didn’t need and will not spend...we will save every penny because who know what this irresponsible administration will do next. This tax plan has loopholes you can drive a truck through. Everyone who can will become a LLC, S-Corp, or C-Corp. tax receipts will plummet and Steve Mnuchin is not the guy that will sound the alarm...the disaster will be epic and the gaming will be grand. These guys don’t understand the bill they signed.

  40. Democrats will be elected when the red states see the results of this law "hit the fan". By then it will be too late and a couple years after that the party brought in to fix the mess will be blamed for it. History repeats itself in an endless cycle. Trickle down fantasy, recession, bailouts, stimulus, recovery. Repeat. All the while, a few bank accounts get huge infusions of cash.

  41. It is indeed infuriating that neither the journalists, nor the blue state taxpayers they do their best to scare understand the AMT. If you pay $30000 in SLT and work for a living, you never got to use that deduction in the first place. But with the increase in AMT exemption and phaseout limit, you get a break.

  42. You don’t understand the plan either. There are huge limitations on passthrough entities defined as being in “service industries”, which means just about any skilled trade or profession. Becoming a passthrough entity doesn’t lower your tax burden unless you manufacture or happen to be in real estate (I wonder why real estate?!). Furthermore, most of the lowered taxes are temporary. After a decade or so, when Trump and most of the legislators think they will be retired, the tax relief expires. One hopes they will too, but sooner.

  43. Predominantly rural states, like Montana, can keep taxes low because their local governments don't have to provide many services. Yet states with large cities need a lot of infrastructure to move people efficiently, schools, parks, and other services. Cities are major economic hubs. They drive innovation. But they are expensive to maintain. Cutting funding will slowly kill them, and will ultimately hurt America's ability to compete in the global market. Regressive funding measures, such as privatizing critical services, would restrict economic mobility within cities and would diminish their innovative edge. Cities are our economic strength and their necessary services should be properly funded.

  44. That was the very goal of the Job Cuts and Taxes Act. It didn't do anything wise for us, or common-sense for us, or helpful for us, but it sure shoveled money at big corporations and showed You Liberals who's boss. That'll learn those Wealthy Coastal Democrat Elites who can barely get by on a fixed income in the projects! The "family values" men at the covfefe GOP abandon their rules-lawyery and "Christian" prudery whenever it helps them "win" by making us lose. Sometimes it works: while Dems focus on the blatant hypocrisy, the GOP rushes a tax(-cuts-for-the-wealthy) bill before we've even caught them Hiking the Appalachian Trail and Having a Wide Stance.

  45. You make a splendid argument for large cities to outsource their critical services to places like Montana - if not to also outsource some of their population... Private-sector seems to have caught on, a while back - though this case goes more to less regulation, than less taxation... For medical malpractice, the differential is more systemic - though less correlated with red<>blue ideology... See - California apparently strives to keep its property taxes and malpractice costs more like those of Texas, than those of its blue brethren...

  46. And those living there get all those benefits, so no whining. Not to mention we all defend our country and you don't want those nuclear weapons in NYC do you?

  47. Hard to understand the angst. For decades the Dems have wanted those with higher incomes to pay more. Now they have their wish. Someone paying $30K in state and property taxes as shown in the example is rich. (The average income in the US is about $50K) What Stephen Sweeney and others are upset about is the taxpayers will probably take a microscope to state and local budgets and will be shocked at the fat and waste.

  48. Why is it hard to understand weaponizing the tax code against your political opponents? Why is it hard to understand when this causes a response? Seems clear to me. It is also clear that attacking people through tax laws is different from the question of whether people are spending their taxes well. The waste in Federal spending is not different from the waste at the state level. Golf trips to Mar A Lago? Bloated military? Carried interest loop holes? My state provides beautiful parks, maintains local services, and builds roads and public transport. Having just visited a low tax state, the lack of government attention to the spaces between houses was clear to me.

  49. You do understand that the cost of living in these affected states is much higher than in other states? A dollar earned in MS will go much further than one earned in CT or NJ.

  50. I wouldn't mind paying more if it would actually help those who need it. I object to paying a lot more to give a tax break to people even better off than me.

  51. Taxes under Trump are being used as political retribution and reward. To the extent that few examples exist of bigger beneficiaries of the new tax package than the president and his clan, it is truly a political obscenity in full putrid flatulence. Compare Americans being taxed a few hundred dollars to force them to carry health coverage for their family, to forcing thousands of dollars of retrogressive taxes on middle class families to enrich billionaires. At its extremities, that is the difference between Trump and any previous 'precedent.' A full tax rebellion by all of us across the board is completely justified by these actions. Ironically, the Republicans by cutting funds to all enforcement and IRS powers has left itself wide open to such a rebellion. States, such as California, and New York have every justification for taxing and retaining revenues directly. Let Trump eat as many ice cream cakes as he likes. The more the merrier. Let the fat slob explode.

  52. Let the tax games, begin! If anything, this forces democrats to think like a corporate c-suite in the fine art of tax avoidance. This Californian is counting on you, Sacramento...get me my deductions back!

  53. Maybe Democrats in high-tax blue states should ask themselves why they are taxed so highly. Maybe it’s time to reconsider the illegal immigrants who aren’t paying any federal or state tax.

  54. Undocumented immigrants that work in the United States do pay State, Federal, and local taxes. They also pay into social security. They won't however, reap the benefits of paying into those programs as they are not eligible for benefits. The only ways for them to work in the U.S. and avoid paying taxes are 1) if their employer falsifies payroll and pockets the money or 2) they are self-employed. We have remedies for the first, the laws only need to be better enforced against employers.

  55. Hey M there are plenty of reasons why taxes are high. Actual facts show that undocumented immigration is NOT one of those reasons. This is what happens when you start with a bias and attempt to bend reality to match it--failure due to ignorance.

  56. All they have to do is look at Kansas to figure out what they are taxed so highly.

  57. Time to legalize marijuana in NY just like the western states with voter initiative have done. They are bringing in huge tax revenues and avoiding interdiction and prison costs of putting their citizens in jail for drug that is far less harmful than alcohol. Washington and Colorado have paved the way. If not for 3 corrupt players in the room up in Albany, we too could have legal marijuana. Time is right Gov. Cuomo!

  58. So the government turning into a dope dealer is the answer to overspending?

  59. Uh, "government" isn't selling the dope. lndividuals exercising their options in a free marketplace are selling dope in states like mine which have had he good sense to legalize marijuana. and who is "overspending"? Red states are understanding, that is why they have to take in so many more federal dollars than they give, to make up for the lack of services they provide their own citizens.

  60. Defending the theft of funds from the Federal government, which all US states citizens must pay for, to fund the mismanaged State economies of NY, CA, NJ... is even be lauded by the stupid and uninformed. It is another blot on the intent of our democracy.

  61. California's economy is in much better shape than most of the rest of the nation. Are you suggesting it's because they've mismanaged their economy?

  62. California's economy is in better shape despite the high regulation and taxes not because of them.

  63. Republicans are all about ending 'double taxation' when it comes to the rich-kids' estate tax (where it doesn't really occur) but all for it when it comes to states that vote for Democrats. Just more GOP hypocrisy.

  64. Not only are Republicans generally mean, they're not the brightest.

  65. Their followers may not be college-educated brainiacs, but their leaders were smart enough to gain control of the government. By dividing us, they conquered us.

  66. But they are in charge. Deal with it!

  67. And if you put too many together in one place they dumb down the culture.

  68. You have to wonder whether there is any explosive evidence existing in locked Capitol offices, i.e. documents, recordings, letters, video, etc., showing a clear retaliatory animus by Congressional Republicans against "blue states" in the crafting of the tax bill. If so, may some principled whistleblowers please start leaking! Depending on you also, NYT, to get onto this potential, game-changing scandal.

  69. Why would that be a scandal? In politics, you help your friends and harm your enemies, everyone know that. If the Dems were in, they'd be doing the same thing in reverse.

  70. Well, they wouldn't and they haven't. History shows that Democrats are never as criminal, vindictive, or incompetent as Republicans. One of the reason that Republicans have been able to seize power, even though they are in a minority, is because Democrats are much more likely to play fair.

  71. There is none, these changes were to meet the foolish Senate rules. Perhaps if some Dems had participated the outcome might have been different.

  72. Dems want to reduce taxes now. Precious! LOL

  73. Yes, but the GOP clearly has killed Grover Norquist, so they should begin the search for his body....

  74. Democrats want taxes that are progressive and equitable, and that pay for good policies and vital services. We wont support raising taxes on the middle class and the poor to give handouts to the wealthy.

  75. So, Liz, the current 70% share of all Federal personal taxes paid by the top 20% of US households is not enough for you?

  76. "Our first line of defense is to take back Congress for Democrats"! This is as clear a statement as one is likely to get of the Democrats unconcern for taxpayers. "Give us political power so we can take more of your money" may not be the rallying cry these politicians hope! How about "Send us to Washington so the corruption can continue" or "Elect me so that I can ensure your tax dollars continue to be wasted on corrupt deals with unions. Come on New Yorkers, a few more votes and we can get the costs for a mile of subway up even higher"! That ought to do the trick of convincing the rubes to elect more of us! No need to use the money more efficiently cause there is ALWAYS more where the first came from.

  77. I don't quite understand the rationale of making Republican legislation easier to live with. Isn't it about time that Americans get to feel the full impact of the Republican agenda - that contrary their propaganda the sole aim of the party is to further enrich the billionaires and doing it by robbing the lower and middle classes, as well as eliminating all legislations that protect the environment and the safety of the American people. This realization needs to occur - and yes, it will be painful, but unfortunately that will be the only way for voters to come up with the right decisions in 2018 and 2020/

  78. Sibylle: I agree 100%. You are pointing out the propsensity of liberals to try to "paper over" the actions of conservatives that have serious negative effects. This is the same (in a manner of speaking) of President Obama tryng to be the "adult" when Mitch McConnell and the Republicans were doing everything they could to "play dirty." as long as they got their way, fo example by not even giing Merrick Garland so much as a hearing when he was nominated by President Obama for the vacant Associate Justoce seat on the Supreme Court. The proper response would have been to play just as dirty, becaue once one side says the rules do not matter, they are really saying that the rules should not matter for everyone. If they thnk they can enforce "I can break the rules, but you have to obey the rules" they are mistaken. Either we all play by the rules, or to hell with the rules.

  79. Agree 100% I'm sure republicans take this into account that dems will be suckered into softening the blow and defuse the impact of this malign policy.

  80. Most of the law was drafted in secret without bipartisan collaboration. Then the president accused the Democrats of obstruction. This is the detritus of the public proclamation on the eve of Obama's inauguration that no policy or proposal of President Obama's would be supported, nay, they would be actively fought against. It didn't matter what the content was. Well now the Democrats are looking at ways to ease the burden of this law. This is your chance President Trump. Engage. As for the article itself, well the word "plotting" has a kind of negative overtone don'cha think? Why do that?

  81. The bitter irony is that federal taxes from so-called "Blue State" taxes already in effect supporting financially parasitic "Red States." For example (in figures from WalletHub based on 2017 data from and the IRS), New York gets back 56 cents on every dollar it pays in federal taxes, while South Carolina gets $3.07 and Alabama $2.46. As with the outdated Electoral College and representation in the U.S. Senate, the majority of Americans are now ruled by an ever more radical minority. Here's my "solution":

  82. New York sends more liberal legislators to Congress who consistently support ever-increasing government welfare programs. It's only fair that NY voters who put them in office be forced to pay more of the costs of their "generosity" (with other people's money).

  83. So, the trick has been to pay high state taxes, writing them off the federal form, reducing your federal cost, picking up part of the state tax, and those states need the federal government less than other states? It makes sense. But what about the states that lack the infrastructure, industry, and appropriate wages to support higher state taxes? No offense, but as the people poured into the shores, they kind of had first pick and a huge head start! And how does population density affect these areas --- more people can share the state tax burden? Cooking for two can be as nearly expensive as cooking for four.

  84. I thought you Leftie's wanted people to pay their "fair share."

  85. I don't understand why our political class is looking to destabilize our union.

  86. p u t i n.

  87. Not destabilize but allow a few to own.

  88. I believe it's called spite.

  89. There are nice golf courses in high tax states such as NJ, NY and CA. I am sure legislators can come up with appropriate taxes for them. Indeed, although not recalling the details, I believe CA has essentially given golf courses a free pass when it comes to taxes. Might be time to revisit that. And millionaire's taxes are sounding better all the time. Give with the federal hand and take with the state.

  90. In California, Proposition 13 froze the property tax of all commercial properties purchased before 1978 at the same rate as when they were purchased. This includes golf courses, but also many other businesses. This citizen's initiative was designed to keep property taxes low for existing residents, pushing the tax burden onto new arrivals. Golf courses just happened to be one of the beneficiaries. That said, when a property is bought or sold in California, it loses the exemption. Because more than 75% of all golf courses are public (owned by municipalities), the rarely change hands and keep their 1978 tax rate.

  91. No, there is no free pass on taxes for golf courses in California.

  92. "As Malcolm Gladwell recently pointed out in his podcast series Revisionist History, country clubs enjoy enormous tax breaks in California. Two laws have conspired to give golf courses generous subsidies. A 1960 ballot measure (Bob Hope Law) passed by voters lowered the value at which officials were allowed to assess nonprofit golf courses. The Bel Air Country Club, Brentwood Country Club, Los Angeles Country Club and Wilshire Country Club are all nonprofit 501(c)(7)s. The clubs are owned by their members. Then there was Prop 13 which rolled back the assessed value of land to its 1975 level. If the land doesn't change hands the property's assessed value can grow by only 2 percent a year. Prop 13 also capped property taxes at 1 percent of assessed value. Courts ruled that when owner-members of clubs die and new members buy in, the clubs are not considered to have changed ownership. So clubs are treated as if they've been owned by the same people for the last half-century, even though many of the actual members haven't been around that long. California is littered with private golf courses. A coalition, "Make It Fair" wants to limit Prop 13 to residential properties. Then assessed value of golf courses would be much higher (though not at market value, thanks to the Bob Hope law), and would therefore generate more tax revenue. In Los Angeles, some country clubs are paying 1975 real estate values — 1 cent a square foot." From LAWEEKLY. Seems like a free pass to me.

  93. Here’s an idea, don’t tax your citizens to death.

  94. Right. Let's avoid the subject, which is the Republican Party using tax policy tp punish blue voters, and move on to a completely unrelated subject. What're you doing in the greatest city in the world, if you don't like paying for it?

  95. Why not? With the death tax they're worth more to the State dead than alive.

  96. States with high local taxes have the highest longevity, the differences are staggering How about tax your citizens and utilize effective governance so that we can all live healthier longer lives.

  97. Why not - since all deductions are now corporate, shift all expenses to corporations. I'm all for shifting NY state taxes to an employer payroll tax that is deductible by corporations (as everything else is). It seems that it would have the added advantage of giving employees a raise since they would no longer have to pay state taxes. Hurray! Now let's see if Cuomo, who has himself given inordinate tax breaks to corporations, wants to help regular people by making this shift.

  98. Talk about a job killer. And or the taxes will get added to every gallon of gas, loaf of bread, pair of shoes, etc....

  99. One thing progressive state leaders, especially in New York, could do is read the Times' recent article on the cost of subway construction in the City versus other parts of the world. The Times pointed out that a mile of subway construction costs seven times more here than it did in Paris, which is not exactly known as a low cost place. Inflated union contracts, unaccountable "leaders" and cozy political connections creates an environment where the taxpayers is fleeced for the benefit of well connected unions and companies. Multiply that by every other facet of government, and you can see why taxes are so high. Maybe a change in that culture, and not lawsuits against the Federal Government, are a good place to start. But I wouldn't hold my breath.

  100. We are a culture of greed. Until that is resolved, there were always be corruption and graft, whether it be in government or private industry.

  101. Here's the link, which has cemented my plan to leave NY in the near future, taking my profitable businesses out of the state. I will no longer do business and operate in an environment like the one here, where utterly corrupt officials like cuomo and diblasio - both of whom have zero chance of ever being elected to national office - to continue to waste billions of dollars and complain they need more. Anyone who runs a business and remains in NY after reading the article is a fool, plain and simple. Here is the link:

  102. How about a law that stipulates that no state can receive more federal tax revenues than its citizens pay-out in federal taxes?

  103. Great idea! we could include an exception for natural disaster recovery but other than that it should apply.

  104. For states that do end up shelling out more than they receive, like my own, there should be a tax credit for its residents.

  105. Then what would be the point of federal taxes? Taxes are for redistribution. That's their whole purpose. Wealthier states pay more because their residents earn more. As a liberal, I find this one of the most hypocritical and bizarre liberal complaints. It is precisely like a conservative resenting paying taxes to pay for "somebody else's health care/education/school lunch." And as the Alabama senate election showed, there are significant numbers of people even in the most benighted and backward states who don't fit your stereotype of undeserving people who are alien to you. It is wholly baffling to me that a liberal would bristle when a conservative complains of "welfare queens," and then that same liberal bristles at sending money to areas with a higher concentration of "welfare queens."

  106. RE: But perhaps more significant, cutting taxes would also mean cutting funding for schools, subway systems, anti-poverty programs and other services that residents in those states have come to expect. The typical bleeding heart talking points. State and local budget have plenty of fat and waste. Fairfax County has high taxes. The board of supervisors spend $30K on a marble conference table for themselves. The county has a business development office in London. (Anyone wanting to do business with the federal government can figure out VA or Maryland is a less expensive place to have an office than the district itself.) County buildings are build as expensively as possible. The local rec center in my neighbor is built into a side of a hill. The entrance is on the top floor with the pool, racket ball courts and lockers rooms below. This requires an elevator (expensive to install and maintain.) There was enough land to build a one story building. Everything the county builds looks as though it was done to spend the maximum $. New firehouse needed. The old one was a simple brick square. The new one is the Taj Mahal of fire houses. Decorative dormers, porches, etc.... 10% could be cut from the budget without even touching salaries and benefits which are far too high.

  107. False equivalence. Cutting money from underfunded schools and teachers (and what's more important than education?), and cutting from subways (which are falling apart and take cars off the road) and further cutting anti-poverty programs (which are funded far below civilized countries and all money invested is immediately spent in the local economy) has absolutely nothing to do with a $30,000 conference table for Fairfax County's Board of Supervisors or an idiotic installation of an elevator (fire everyone who signed off on these boondoggles and take away their pensions). The real waste is the Defense Budget. $600,000,000,000 spent on killing people. We have no wars worth funding. Every war we currently have is a forever war of choice, developed by the CIA and corporations to fund the military-industrial complex. America is thus a terrorist state and all the external "terrorists" are reacting to our $600,000,000,000/year spent killing their friends and families. If you think otherwise, you've been programmed. If that "defense" budget disappeared for just one year there would be close to world peace and cash to buy 6,652 $30,000 well-polished marble conference tables for every one of the 3,007 counties in the USA. Personally, I'd rather spend my money on conference tables than killing people, but that's just me.

  108. Anecdotes like those you mention don't make for good data. Credible audits of state spending show that "waste" amounts to about 1-2 % of budgets. Yes, waste should be eliminated whereever possible, but it is not the reason that state taxes are going up,

  109. Yes and some cities and states have so much money they can afford to resist the federal government and support illegals.

  110. The root cause of most budget problems throughout the US is exorbitant taxpayer-paid salaries and benefits. High-tax states represent the paradigm for this problem, which can be easily addressed by state legislatures.

  111. I am not sure where you are drawing the statistics for your conclusions. Most state and local employees I know of in Texas do not make a high salary. I work for a government agency and we do not have enough people to provide the service we want to provide.

  112. The root cause(s) of the national budget problem is corporate loopholism and oil subsidies, corrupt no-bid defense contracts, negative tax numbers for huge corporations, offshoring profits, money laundering worldwide, and greed, RC darling. A decent salary is hardly a root of anything but a decent life. Slight correction. If you will. And if you won't, too.

  113. And your data to support this common and knee jerk bashing of public employees? And don't cherry pick some high paid administrators and state university coaches. On average, public employees are not highly paid. Public employees generally earn less than those in similar occupations and similar educational credentials than those in the private sector.

  114. Two observations: - Folks in high tax states who are also subject to AMT have not been able to fully utilize the SALT deduction for years. - For New Jersey, the problem is "562". That's the number of municipalities we have (and roughly the same number of school districts). Is there any doubt that we could reduce some of this "overhead" expense through consolidation without impacting services?

  115. When I lived in states that had state and local income taxes I don’t remember paying more than $5-6,000 dollars, so as far as I am concerned even the privilege to deduct $10,000 is much too generous. Those who pay more than earn enough that can afford to pay the taxes. I believe the reform should have been left as it was originally proposed: no deduction at all, none whatsoever. But it had to be changed to get the votes for passage. My critics will say that that this reform, their inability to deduct their SALT will affect how much Tennessee and the like will receive in federal money. How can that be? First, your SALT benefit me none in the least; it pays only for your high living. Second, less federal subsidy of your SALT means more federal money to go around. Minimizing this deduction closes a major loop hole in the tax code that has plagued America for years. I support it 110%, just as I support the President Trump and all of the wonderful things he has done to restore American greatness. Thank you.

  116. You're assuming that new federal funds coming in from SALT states will flow to you. No, this bill redistributes that money to the top 1%, not to you. You won't see a penny. If anything, you'll see cuts to Medicare and Social Security before you see any more federal money coming to rural Tennessee.

  117. No doubt then you want your home state to stop taking more from the feds than it pays in taxes, as virtually every red state does. All generously paid for by those of us in the high tax blue states.

  118. SALT attacks working people. This entire tax law is skewed towards those that live off of assets to make them richer at the expense of all of those who actually do work. If you believe that this law will actually provide more federal funds, you are exactly the type of person Trump hopes to fool when he tells Mar a Lago guests that he ‘just made all of them a lot richer’.

  119. Perhaps the $10,000 deduction cap will force citizens of high tax states to pressure their local politicians to lower local and state taxes and spend the money they have more wisely. This makes more sense than some of the schemes discussed in the accompanying article.

  120. Perhaps the citizens in low tax red states will tell their Congressional representatives to stop fleecing the citizens of high tax blue states and demand to start paying their fair share of the federal tax burden.

  121. Those of us in higher tax states are willing to pay the higher state taxes for decent education and other vital services, and don't want to move to low tax states where those services are poor. In many cases, are higher state taxes are making up for the defunding of vital services at th federal level. Now the Republican tax bill is penalizing us for being willing to pay for the services that they refuse to fund adequately.

  122. The advantage of being in a lower income bracket is that articles such as this don’t apply to you. If you owe more than ten thousand dollars in income tax you are making a lot of money. Many people don’t have much more than ten thousand dollars in income period. It’s hard to feel sorry for people that owe 10 to 30 thousand in income taxes.

  123. Please understand that in Kansas, someone making $50k is called "manager". In NYC, that person is "administrative assistant". Your $135k 3 bed with $2300 taxes is my $600k home with $12k taxes. It's not rich...the only things that cost the same are cars, and food.

  124. A statement that is relatively much easier to have in Kansas than in NY, NJ, CT, or CA. Those states have subsidized states like yours for decades by already paying more into the federal coffers than they receive.

  125. The biggest tax burden in high cost states isn't the state income tax, it's property taxes, which can exceed $10,000 for even a modest home. Higher taxes are needed in urbanized areas to pay for necessary services like sewer systems, garbage collection, more specialized fire and police protection, street maintenance, etc. that keep cities livable.

  126. I live in one of the high-tax, high-cost states (MA) and will be personally hurt by this law. However, I am in favor if it because many of these states have carelessly raised taxes year after year, bloating their budgets with a lot of fat. If indeed the high taxes yielded much better services, like better roads, fire, police, etc, I'd be all for it. However, in general, it does not so why should other states subsidize NY, CT, MA, CA, NJ and others for their padded budgets?

  127. Excellent point. The residents of the highly taxed states on both coasts who have benefited from their huge property tax deductions have been subsidized by the majority for years. It's time for them to hold their own state officials responsible for public money. As an example, may I point to the reprehensible cost of the New York subway project (as outlined in the NYT excellent reporting this past week) that was passed on to taxpayers. Instead of finding ways to avoid paying up, perhaps these Democrat lawmakers and bureaucrats would be better serve their constituents by being principled guardians of the public coffers.

  128. You have it backwards. High-cost, high-tax states subsidize the rest of the country, while also providing its taxpayers with better services (have you been to Alabama lately?). Attacking SALT is red state America cutting off its nose to spite its face.


  130. The obvious solution to this problem would be for Congress to pass a law guaranteeing that the Federal government spends as much money in each state as that state contributed to the Federal revenue purse. Currently, citizens in states with high state taxes ALSO pay more taxes to the Federal government than citizens in low tax states. The simple fact is that people in wealthier states pay higher taxes and get better services than people in poor and underfunded states. The Federal government help compensate for this through fiscal transfers through dozens of different programs. This is welfare by another name. Ironically, the anti-welfare Republicans who represent states with low state taxes North Dakota, Wyoming, Mississippi and many others, are very happy to accept federal money to subsidize their roads, canals, Medicare, farms, etc. etc.. Since the Republican Party is ideologically opposed to redistribution, perhaps some representatives from these states will co-sponsor a bill with Democrats from California, New Jersey and New York to end this massive Federal welfare program?.... mmm, maybe not.

  131. Republicans are ideologically opposed to redistribution but are also the biggest hypocrites on the planet so... In Michigan Governor Snyder gave a $1.9 billion tax break to corporations while at the same time he levied a new tax against pensions. He took from the least able to afford & redistributed to the least to need.

  132. Why would they do that? Each state has two senators and if they voted that in they would be replaced. Just reduce or eliminate those pesky federal rules and the money that comes with them. Start with say block granting Medicaid with a reduction through time.

  133. While waiting for Democratic control of government in DC, I'd favor state-based AMT's directly targeting the wealth taken away from federal revenues, and use that money to compensate for the lost SALT deductions. I'd go even further. There are many other wealth taxes that could added in as necessary to give real tax relief to the middle class and better fund things like education, healthcare, and infrastructure. We are a tremendously wealthy country with an overall tax burden that places us something like 40th among advanced economies. We've also seen virtually all the economic gains go to our wealthiest citizens for decades. Trickle down economics is a farce and it's long past time to use the tax code to do what the rich would never do on their own, and that's make America great again for those who've been left behind. I suspect it would be really popular in blue states

  134. Yes please tax the wealthy, they can move here.

  135. Vulcanalex, does Tennessee need more gated communities with rich people who don't pay income taxes??? Public investments after WWII (and the prior decimation of our competitors' economies) set the table for our unprecedented run of world leadership. But we've been coasting since the Reagan administration, and mostly rigging the economy for those at the top. We now have real competitors around the globe. We can't rely on companies that know our roads, bridges, rail lines, airports, and harbors are crumbling, and also consider American labor as just an expensive and underproductive input that's easily replaced in the cheapest state or abroad. It's long pas time to reinvest here in the things that will benefit people in all communities up and down the economic ladder, i.e. infrastructure, education, and healthcare for starters. I'm all for good-faith input from across the political spectrum, but we haven't seen that nationally for years. If it has to come from enlightened state and local governments, and has majority public support, then so be it. If their citizens so choose, Tennessee can ride the pine while the economies in California and New York lead the way.

  136. Mississippi receives over 6.5 times the amount NJ does in Federal spending for every dollar of Federal taxes paid. Similar ratios exist for many other Blue vs Red states. SALT was clearly a politically motivated attack; does anyone remember what happened when Great Britain tried to tax our tea in 1773? It had something to do with taxation without representation. That will change in 2018 and again in 2020. In the meantime, it is imperative that states like NJ, CA and NY do something to combat this inherent unfairness by changing income to payroll tax. Otherwise, these states will undergo burdens that will make them hard pressed to continue to be the engines that drive our economy. Jane Jacob’s seminal book, ‘Cities and the Wealth of Nations’ provides terrific insight into how these states’ economies are the backbone of America.

  137. Object to helping the poor I see. And shall we do some math? How much money is funneled to Mississippi vs money funneled to CA or NY in actual dollars?

  138. Good idea for the short term. For the long term, divorce, for irreconcial differences. The US for the blue states is a "bad deal". Let's join Canada, bluxit!

  139. We don't object to helping the poor, we object to Republicans creating more of the poor through their reprehensible polices, and then punishing us for helping the poor.

  140. I am all for any and every plan that will reduce the amount of federal tax I pay. It is the only way I can ensure that more of my money stays in my own state and isn't "redistributed" to a red state. It's the only way I can have equal representation in my taxation.

  141. For commenters in low-tax states who tell us we should just cut our local taxes: (1) We have extensive public transportation here which rural states lack. (2) We have many poor people who live in cities because they don't need a car and can live in rental apartments. The public will pay for them one way or another (e.g. if they go to more expensive ERs for medical care rather than going on state Medicaid). (3) NYS has Wall Street. We are making more money for the federal gov't, and for Americans' pensions, than the rural states who claim we spend too much. We pay more to the feds whereas they take more. (4) Our cities provide many jobs. The population attracted by that increases the demand for public transportation and housing which are the biggest drivers of the cost of living. (5) Large urban population means more public employees to pay: teachers, fire, police, transit workers, sanitation. (6) NY, NJ and CA have extensive public university systems so our population with at least some college education is higher than in rural states, where preparation for the jobs of the future is much lower. I'm sure there are other reasons that can be added. If we cut these services, particularly public transportation and education, we will only lower our contribution to both state and the national economy and the prosperity of the whole country will suffer.

  142. You would be surprised how quickly Wall Street can move to Miami.

  143. Just to add another point: why did NY lose the ability to deduct state and local taxes that go to the public services described above, while hedge fund managers keep their low carried interest rate (which they themselves have expressed surprise that it has lasted so long)? It shows the decisions were made for political cronies rather than with the public in mind.

  144. As for your #1, here's my response: Regarding NY's high costs, get rid of the 1MM illegal aliens, the rest of the country should not have to pay for their free education and healthcare.

  145. The state and local tax deduction has been in effect since the very beginning of federal income taxation - temporarily during the Civil War and "permanently" since the constitutional amendment allowing the income tax in 1913. This was a "states' rights" issue - something that conservatives long supported. It was felt that the federal government should not be allowed to "doubly tax" on income that was already paid to the state and thus weaken the power of the states. The present, non-conservated (radical) Republican Party has decided to use its temporary majority to stick it to those states that have chosen to spend more on their public goods - education, health, infrastructure, ..., and who tend to vote for Democrats. These individual state decisions used to be applauded as "the laboratory of democracy." Well, turnabout is fair play. There is ample evidence that the blue states pay far more in federal taxes than they receive back, providing a large subsidy to the red states. Polls show that Republican-leaning red state residents strongly believe that the opposite is true - their tax money is going to support blue-state welfare leaches. So here's a suggested strategy for the Democrats: propose a law that no state gets back more than 110% of what it contributes in taxes to the federal government. The misinformed red-staters should applaud it. Even if it fails, it will be a good "teaching moment."

  146. Why 110%? Let's make it 100%, including all the farm and energy subsidies (oil/gas/solar/wind). Let the Red States feel the wrath of what happens when the most productive citizens get tired of subsidizing the real leeches in America...

  147. Why 110%? In reality it should be 100% or less

  148. Far west, Be careful what you ask for. Those red states feed you and your blue state cronies. We all need each other. Congress has taken a shot at revising taxes. Let's see how it works out after the tax lawyers and accountants have figured out the loopholes. It may not be what you think.

  149. High tax states are doing exactly the right thing. They have little choice. The new tax plan encourages high income taxpayers to game the system, while leaving W-2 employees holding the bag. The net result of all these moves will be a loss of trust, between taxpayers and the government. Trust, once lost, is hard to regain.

  150. The 2.6% tax rate reduction for the over $500k high earners was a last minute addition to the new law to satisfy unknown Republican donors. I would like to see my own state recover this gratuitous gift to the well to do by raising its top bracket rate by the same amount and using the proceeds on a property tax rebate. If the corporate tax rate had been set at a more reasonable level, more or all of the SALT deduction could have been preserved. I doubt that there is any reasoned, technocratic rationale for the 21% rate. Trump had mindlessly called for 15%, and the tax writers felt constrained to come as close to that as possible. Trump’s similarly mindless demand for a bill on his desk by Xmas left no time to think thru the consequences that we now see. This tax bill is what happens when a carnival barker President and a political party unfit for governance come together.

  151. People keeping their own money is not a "gift." The top 1% of taxpayers pay 40% of all federal income taxes collected.

  152. But they hold more than 50% of the wealth, so they are in fact, undertaxed already.

  153. as they should.

  154. Trump is setting the stage for New York, California, and other economic powerhouses to decriminalize non-payment of federal income tax - if we don’t get some financial recognition for permitting U.S. meth-lab economies to ride on our coattails. Property values in California are high for a reason, and it ain’t immigration, and it ain’t the weather.

  155. Trump is setting the stage for New York, California, and other economic powerhouses to decriminalize non-payment of federal income tax. That is nice but it's the feds that will come after non payers.

  156. Trump is setting the stage for New York, California, and other economic powerhouses to decriminalize non-payment of federal income tax =================== Impossible. States don't control federal law.

  157. Campesino, thanks for correction...that must be why DEA agents are swarming over our border to arrest all the marijuana vendors who began selling pot in California 12 hours ago, in violation of the Controlled Substances Act. Oh, they're not? Maybe it's the feds who are not in control of federal law.

  158. If a multi-billionaire bought a very small township for just his family and established a 100 percent local income tax, should he have no federal tax bill? SALT deductions are at least theoretically unfair and benefit the wealthy the most. It hardly seems "progressive" to cry foul over this tax code simplification. Yes, California and New York will pay more, but regional differences within a state can be addressed by the state's tax laws. These two states, however, also get benefits other states do not, most notably the most productive years of many of the most talented people raised in the other 48 states. Funding one's own talent pipeline is a good investment, not an unfair burden.

  159. When the carried-interest loophole for investors and hedge fund managers are eliminated, as well as the new 20% deduction for independent contractors and others, may be I won't mind losing the SALT deduction. Many people in high tax states are not the super wealthy. Taxes are high because we like good schools and other public services that perhaps are not a priority for low tax states.

  160. I find it interesting that the states that have the highest taxes are also the ones that already send the most money to the federal government. Perhaps there is a connection between taxing enough to pay for good services and general prosperity. I'm sure there is considerable waste and thievery in all government monies, but that doesn't mean that having an economic environment that provides good education, transportation, health care, recreational opportunities and safety nets for the poor is a bad thing. Building strong attractive community encourages prosperity. When all citizens have lives that have more hope and meaning, all benefit.

  161. Progressives believe that the wealthier among us should pay more taxes. So why all the objections about actually putting that plan into practice? However, I do like the idea of making huge charitable donations to the state, I have championed this all along as a means of rich progressives walking the walk they always talk. If they want to pay higher taxes, stop using deductions and start giving that money away. As for the idea that some states actually funding their part of the bill fully, well that is pure accounting nonsense. Divide up that federal deficit, budget, and debt and you will find that nobody pays their actual "share" and deficit spending has been the official policy of both parties since the Great Depression. PS. do progressives really trust themselves and their politicians to allot these new windfall donations properly without giving a huge portion to corporations? See insurance companies and big pharma and their actions and profits after the latest huge progressive tax bill known as ACA. Good luck with that one.

  162. Progressives don't believe that the wealthier should pay more taxes, but rather the wealthy should pay the same percentage of their income as the working class. Progressives also believe in fiscal responsibility, one is not exclusive of the other

  163. This is incorrect. Ask 100 self-described progressives what they think of a flat tax, and 99 of them will object that it is regressive. You are probably referring to different tax rates for different types of income (investment vs. employment, and Warren Buffett's famous secretary). While it's true that this strikes progressives as particularly unfair, they do not actually support parity of taxation rates either.

  164. Mike, kinda sorta but not really. I cannot think of a single progressive who shouted "hey, all those people getting a giant tax return far and beyond what they actually paid need to pony up because rich guys are actually paying to the IRS instead of paying nothing and getting a tax refund for taxes they did not pay!" As for fiscal responsibility, ha ha ha ha. Hard to take that seriously from the party that claims insurance agents and policies equal to actual healthcare. Just sayin. Happy new year!

  165. Unless the states modify their state tax laws, the new federal tax law will result in the state taxes paid by an individual increasing. This is because state income taxes are often tied to federal deductions. For example, if you itemize or use the standard deduction for federal purposes, you need to do the same for state purposes. Many people who itemized in the past will now use the federal standard deduction. That will lock them into using the state standard deduction which is lower than what they had been able to itemize in the past. If a person continues to itemize for federal purposes, the total itemized deductions will decline for state purposes because of the $10,000 cap. The result in both cases is that the person's state taxable income increases.

  166. Correction: The increased standard deduction hardly mitigates the subject problem, in that the SALT expenses of those who are really affected are much in excess of the 24k standard deduction (which increase itself was offset by takeaway of the personal exemption). There is some hope that Republican efforts to counter these kind of creative state solutions, i.e., by amending the new tax law, would be subject to filibuster requiring Dem support in the Senate. Moreover, who says the GOPers really care if tax collections are less than originally projected under Trump's Tax Cut?

  167. If the higher-tax states are unable to blunt the loss of the state and local tax deduction, they should consider ways to make their state income taxes reverse the effects of Congress’ giveaways to the very rich and corporations. Increase the tax paid by those in the top state brackets to make them more progressive than at present. Give pass-through entities special treatment in reverse, like a surcharge to offset the federal deduction. Increase corporation taxes. All with the goal of using this additional revenue to reduce state taxes for those residents who will pay more under the Republican Campaign Donors Tax Relief Act of 2017.

  168. I don't think you understand how the bill impacts high-tax states. As far as I know the final compromise was that you can still deduct up to $10k in property and SALT taxes. What middle class person (lets say the middle class is below 95th percentile of household income) pays more than that? Capping these deductions is a way to stick it to rich people.

  169. I thought all the blue states wanted the rich to “pay their fair share”. Most states tax rates are well below 10%. To keep it simple, that means someone has to make well over $100,000 for this to be an issue. Over $100,000 is the top 10% of earners. The top 5% make over $150,000 where this deduction might be an issue. Now the Blue State Democrats are howling that new tax bill is unfair to their top 5% earners who probably funded a significant part of their state’s budget, but in the previous tax code, were able to shift those taxes to the federal government through a deduction on federal tax. Nice tax scam, you get high service in those states subsidized by the feds, which means the rest of the country. Even better the previous tax code let blue states could keep raising their tax rates because the federal government would pick up the tab. Nice. So the response of the Democrats is to 1) bring a law suit, 2) find a loophole making it a charitable deduction, of some other hair brained scheme. How about lower your tax rates and make your state government more efficient. Or is that too Republican for you?

  170. The kicker is property taxes, which are also SALT, and is the means by which we fund our local schools, police, fire departments and emergency services, sanitation and libraries. This has nothing to do with income.

  171. Except that it's those blue states that subsidise the red States, we put far more in than we get back in Federal dollars. Also with the cost of housing, gas taxes etc 100,000/year makes me one rich here.

  172. Your logic is sound, but for the fact that the Blue states already receive less in federal funding than they give out. Expect that balance to tilt even more out of favor with the SALT deduction removed.

  173. Changes to tax codes, in this plan and others, should be phased in AND indexed to inflation or the CPI. For example, the mortgage interest deduction, which IS unfair to renters. Why not reduce it over 5-7 years, so the housing industry and homeowners/buyers could adjust to the change? Another example here in New York: the "mansion tax" of 1% on properties over $1 million. Begun in 1989, it included no inflation index; today, the metro region is filled with homes subject to the tax that are not "mansions" by any stretch of the definition. It's pretty obvious why indexing and phasing isn't included in tax code revisions: the politicians who write these laws care less about future implication of their decisions and more about the political benefit they get today. And writing a sweeping tax revision without proper review or analysis doesn't help.

  174. As a resident of a low-tax state, I hope that New York, New Jersey, California and the other coastal states succeed in their attempts to push back and retain the SALT deduction effect. For one thing, by reducing the projected tax the federal government achieves from the GOP tax bill, it will demonstrate the utter bankruptcy of the reconciliation process, magnifying the real cost of the bill. (I’d be even happier if that caused congress to reconsider the bill, but that’s just a fantasy.) Rather than pushing high-tax states to reduce their taxes, I wish my legislature would rescind its ill-conceived reduction of state income tax rates; it has done nothing but cause budget shortfalls the past three years and devastating cuts to education and social services. I long for the day that Americans recover from the Reagan hangover of denouncing government as a problem rather than seeing it as a necessary agent of social progress.

  175. The policy obviously punishes residents of D-voting states and has no relationship to any traditional R agenda items such as limiting the role of federal government or expanding states' tenth amendment rights. It's an easy mistake to try to pretend that the SALT tax change has any rational policy basis. It's very very tempting to assume that the people who made it were operating in good faith and had some long-term policy agenda. It's simply not true. (1) The bill was pushed through at light speed with no committee hearings, no evidence, no reliance on economist estimates of impact. It's obvious that there is no real reason for this change. (2) Data show that the states which receive the lowest per capita federal subsidies to operating expenses -- even including the implicit subsidy of lower income taxes -- are exactly the ones being smacked the hardest by this SALT limit. There is nothing politically wrong with using public policy to punish political opponents. Singapore has done it for years to protect their ruling party's interests, and other autocracies do it just as well. But let's not pretend there is some noble policy goal here. The very political party which supposedly stands for limiting federal government and letting states explore their own local solutions to problems is now putting in a place a policy that appears designed to make self-sufficient, independent states to spend less and rely more on the teat of federal funding (like MI, LA, TN, SD, MO).

  176. To quote the writer “But the cap on the state and local tax deduction could pose a serious threat to state budgets, because it makes state taxes more expensive for residents. That could make it harder for states to raise taxes, particularly on wealthy residents, and could increase pressure to cut spending.” This para reveals the writer obvious bias towards higher taxes. Why should the federal government make it easier for states to raise taxes on wealthier residents? It shouldn’t. Why should tax policy encourage state spending beyond what is rational? It shouldn’t. I’m not advocating higher or lower taxes. But the writers sentence reveals that it actually does do both these things, hence the change in the law is needed and in fact good policy.

  177. I live in a county with more expensive real estate in our urban areas than the county next to us. Although I live in the country, on our back roads it's always obvious when you cross the county line, because you suddenly go from a well-paved road to one with potholes and patches. You want infrastructure? You've got to pay for it. Ditto good schools. Ditto libraries open more than one day per week. Governments pay for stuff with taxes. You satisfied with potholes and failing schools, like Kansas? Great, move there and you can get a lot more house, which you may need since your kids will only be in school four days per week.

  178. "Ditto good schools" If high taxes equal good schools, why aren't all schools in your state good? The truth is that high property taxes = high home prices = fewer poor kids to deal with. That's what liberals really mean by "good" schools.

  179. People want roads. They don't want to educate armies of illegal alien children who should not be here in the 1st place. I have a friend who is retired UC librarian. Her pension: well over $100K. More than she made while working.

  180. Reader, I have no children, but I certaibly want to educate other people's children, REGARDLESS of how they got here. (a) They are children and did not choose their situations; and (b) having "armies" of unschooled kids running around unsupervised while parents work is much more expwnsive than educating thwm. And what do you think those children will do or be when they grow up? Would you rather have them illiterate and alienated? These are the people who will probably be taking care of you when you need a nursing home or assisted living.

  181. Our mortgage is paid and we have one of the lowest real estate tax rates in MA so trump's tax reform actually works in our favor. However our children benefited from one of the best school systems in the state, we have full time police, fire and EMT in our rural town of 13,000. Nearby, CT towns are even closing their volunteer fire departments for lack of funds to just keep the lights on. How much of civilized society are we willing to give up for a paltry tax cut? Why do we value quality of life so little? Should we sacrifice our children's future to get a pocket full of change, especially when states and towns will almost certainly have to raise taxes to provide the services that any first word nation should offer to her citizens? What's on the chopping block? Public education? Emergency first responders? Road repair? Bridge repair? A closed bridge can literally mean the difference between life and death in an emergency situation. Or the difference between your house burning to the ground and your loved ones dying a horrific death. Is an extra $20 a week in your pocket worth the tremendous risk and sacrifice? The USA is already slipping in quality of life status among 1st world nations. I thought trump campaigned (lied) about making us great again? How does starving our federal, state and local governments, compromising our environment, health and quality public education, which is now needed more than ever in a very competitive global economy, accomplish that stated goal?

  182. "Our children benefitted from one of the best school systems in the state" With state and local taxes so high, why aren't ALL the schools in your state equally good? Admit it: what made your children's schools "the the state" was the fact that high house prices/high property taxes kept the number of poor kids in your district extremely low.

  183. Almost everything that you mentioned here has to do with state taxes, not federal taxes. The tax bill does not affect the amount of money your state collects. The tax bill certainly has it's flaws, but don't blame the closure of volunteer fire departments on this bill. Those two things are unrelated.

  184. People want services. They don't want to educate armies of illegal alien children who should not be here in the 1st place. They don't want to pay for healthcare for illegals. I have a friend who is a retired university (California) librarian. Her pension: well over $100K. More than she made while working.

  185. Many of the states with high taxes already receive less in federal benefits than the federal taxes their citizens pay, sending the net funds to poor states. The new tax law exacerbates the problem. It's high time the wealthier states protect its citizens, and let the poor states fend for themselves.

  186. Love it! Exploiting loopholes for the good. The 1% have been greedily using loopholes for years...what's good for the goose......

  187. Why are these states and democrats upset , they wanted to take and limit loop holes from the 1% , they got that .

  188. Wasted effort (years of legal challenges and bad for blue state businesses) and counter productive in the long term (will further drain needed federal tax revenue) We have one task - unseat republicans in 2018 and impeach Putin's puppet.

  189. Correct, the services we are talking about losing if we cut state budgets in blue states to make up for this libertarian assault are: public transportation, education, and poverty programs. Its called Social Darwinism when those born with structural social advantages get ahead, and believe their winner-take-all success is based on their hard work. We can't let the ignorant and the selfish and the sociopathic elements in our country run the show.

  190. Charitable contributions are by definition voluntary. Replacing state taxes with some kind of charity scheme is ridiculous. Maybe this is a wake up call to politicians in high tax states who only know how to tax and tax some more. The gig is up!

  191. Well, maybe we should just give Republicans at the Federal level what they seem to want, no tax money.

  192. Any chance the Democrats in high tax states could reduce their run-a-way spending?

  193. LOL.

  194. You're not specific regarding "run-away" but note that no matter how wasteful, it goes back into the local economy. Whereas the Red states (which are as wasteful and any Blue state), additionally have specific policies and goals to Hoover the pockets of the people into the offshore accounts of the rich.

  195. When Obama and the Democrats passed the ACA, it, too, was a transfer of wealth from the blue states to the red states. It allowed a large expenditure of the Nation's wealth to be utilized to better the lives of the poorer red states in the hope that it would improve the lives of all Americans. No one complained about this transfer of wealth. The recently passed Tax Bill also transfers wealth from the blue states to the red states. But the motive was different. It was clearly articulated that this was intended as a slight to the blue states for being blue. This motive undermines the unity of America. It's despicable.

  196. Adrian Masskant. No one complained about the ACA? "On which planet do you reside?"

  197. equal treatment under law - except in states leaning Democratic. all part of the strategy, folks. he he he

  198. The Republicans who say that high SALT state should simply lower their taxes should note the following: New York falls at the bottom of the list for return on federal tax dollars receiving back less than a dollar for every dollar sent to Washington. Meanwhile red state like West Virginia, Kentucky and South Carolina receive back two or more dollars on each dollar they contribute to federal coffers. Note this table published in The Atlantic.

  199. Perhaps Governor Cuomo should read the recent NYT article “The Most Expensive Mile of Track on Earth” which unfortunately is located in NYC - a tale of rampant over staffing and inflated wages, greedy unions filling their coffers, and politicians doling out contracts like Santa Claus. Sounds like there’s plenty of opportunity for state government to improve efficiency. I would like my state, federal and local governments to use our hard earned tax dollars to efficiently and effectively provide necessary services, to focus on the deliverable - whether it’s a mile of track or a high functioning school system - and not to use our money to hand out jobs and buy political favor. High tax states should look inward and examine how they can provide services to their citizens in a more cost effective manner, not start an unprecedented tax war with the federal government. Like it or not, the folks who passed this horrible tax law are elected leaders whose job is to legislative. Leadership is about exploiting opportunities when they arise. Leaders of high tax states should seize this opportunity to lower the cost burden of providing services, using this situation to negotiate favorable and fair union contracts, property bid capital contracts, etc.

  200. Mia, you hit the nose on the head! Best comment here.

  201. Improving the efficiency of state and local governments and having a fair federal tax code are not mutually exclusive goals.

  202. "Cost effective" is the key word. In my observation most local governments don't cut in a cost effective manner, it becomes survival of the fittest. / I live in a low tax state with low services. When budgets were cut a few years ago, our local Government kept the Management level jobs and let many underlings go. We can't keep teachers, firefighters, police and county deputies because the pay is so low. However our Governor gave his staff huge pay increases this year. / Talk is cheap when it comes to "cost cutting"; a neighbor was complaining how we have to get our teachers from the Philippines (with low pay, no one wants to work here), with my response being is "that's the choice you made with low taxes". He/we aren't willing to pay for what's needed. What kind of services do you really want for our citizens?

  203. It's good that the states are using creative "loopholes" in the increase the deficit bill just like the corporations do. These states are being punished and singled out. But revenge will come soon and swift and the tables will be turned. The Republicans don't have a clue as to what will happen next.

  204. Taxes are how our government raises the money to provide the services the citizens use. The new tax code is a way to choke off services by choking off taxes. Inevitably, lower income people are more in need of government services than rich people.

  205. Inner city schools in high-tax states are horrible (Newark, DC, most schools in NYC). Don't kid yourself that high taxes are giving you good services.

  206. In NJ with its hundreds of municipalities in a small state we never discussed effeciency in government. Rather than merge services such as police, education, and public works, we promote hundreds of fiefdoms where police chiefs of towns with a population of seven thousand retire with a pension exceeding 100K.

  207. Maybe people should start questioning why taxes are so high in these states. Huge pensions? Waste? Corruption? All of the above?

  208. Providing services expected by government, maybe? Kansas is calling, asking us if we've learned anything yet

  209. Don’t forget their support of sanctuary cities where large groups of the undocumented pay very little tax.

  210. Republicans aren't the only ones who can play this game. Perhaps NY, NJ, and other affected states should pass a 50% gross receipts tax on any property that has the word "Trump" in its name on January 1, 2018, the effective date of the new Federal tax law.

  211. Elected Democrats and other Democratic leaders should relentlessly fight to overturn Trump's extreme tax giveaway to corporations and the truly wealthy. Any Democrat who works to tweak minor aspects of Trump's taxes is only normalizing the vicious extremism of the bill. Establishment Democrats should use Mitch McConnell's technique of getting on television daily and screaming agaisnt the Republicans who pushed the bill.

  212. So now DJT's oh-so-transparent plan is to dodge, distract and divert all attention from the millions $$$ he will personally gain from his disastrous "Tax Cuts for the Rich" bill to his fake attempt at "bipartisanship" with Dems on Infrastructure. We've seen it all before, folks... DJT will jerk Nancy and Chuck around once again and then blame them (Dems) when they refuse DJT's impossible condition of building his great, big, fat, beautiful, juicy wall after Trump (in Art-of-the-Deal ruthless style), inhumanely dangles the lives and deportation of innocent Dreamers.

  213. I don’t use it, never have. But legalizing recreational marijuana is such an obvious way to augment tax revenue. Then we can finally stop draining unconscionable sums from our state coffers on enforcement and incarceration due to the insane criminalization of something safer than alcohol. And as an added bonus, state legalization of recreational marijuana thumbs the fed directly in the eye. Win-win.

  214. I can't believe that there are loopholes in a bill so carefully crafted.

  215. Democrats in blue states are taxed highly because we value the things government does for us -- roads, libraries, drinking water, a strong military, a social safety net, and a hundred other things. We voted for higher local taxes because we believe in the power of pooled resources. I gladly pay my taxes because those pooled resources pay for this thing called society that we live in. I am, however, beginning to think that all states should be self-supporting. No federal taxes for anything beyond a tithe to the military. Not even social security. Then, California, New York, and other blue states would keep all of their taxes instead of exporting them to red states. Seriously, why should we pay all of the taxes to make the entire country run while sending our hard earned dollars to red state takers? Yes, that's right. Blue states support red states in how federal funds are distributed. It is time for that nonsense to stop.

  216. And while we're at it, let's make our votes count as well! We pay more for less representation.

  217. Sidbeast, I understand and sympathize with your anger! However you forgot that Social Security is funded by the individual tax we pay for it (take a look check your paycheck stub if you're getting one, or if you're self employed your tax form). People tend to move around in our present society so we pay for the s.s. tax and use the money when we retire regardless of where we live. The Social Security trust fund is over one trillion $ but it will start to diminish slowly in the next decade or so. Remember we are only taxed on the first 118,000 of income. The tax is regressive in that we all pay 15% regardless of income. It would be so easy to fix the need to grow the S.S trust fund simply by raising the income ceiling at which we are taxed for social security. How about 130,000 for instance? It would make the trust fund for another couple of generations at least. Of course many (but not all) members of our financial elite are drooling at the thought of privatizing that trust fund, i.e. getting their greedy hands on it. It's on the Republican agenda for next year.... In the meanwhile, SideBeast, do yourself a favor. Remember "knowledge is power" so get yourself some more of both!

  218. Yes, I agree, it is one thing to help out a red state when there is a disaster, though of course Texas would not vote to help us uppity North Eastern states with Hurricane Sandy mind you, but how is making us blue states pay for the red states needs at all fair? I so wish we blue states could secede from the Southern red states. I mean our taxes going to help the poor there I do not mind, but God knows what kind of graft and racist politics our money is supporting. I wonder if the poor get any help at all. Does anyone from a blue state like to think our money is going to fund voter suppression?

  219. I would have thought that Democrats would support the elimination of this deduction which will cause the rich to pay "their fair share." Why should those who don't pay high local taxes subsidize those who do?

  220. Because the states with high state taxes are already subsidizing the other states, even with existing SALT deductions...

  221. And this isn’t about getting the rich to pay their fair share. It’s about transferring wealth, industry and future growth to the South. Revenge for the “Lost Cause.” Will America’s future be possible with a bunch of knowledge and science averse fundamentalists in charge? Doubtful.

  222. What happened to all of that liberal pablum about one's civic duty to pay taxes and the view that those who seek to minimize what they pay are greedy, selfish and evil? True this is all a purely political exercise in reapportioning the burden of our overblown governments. Sadly, few Americans are prepared to admit that taxes are way too high on almost everyone who pays them. The typical American would be outraged to learn the amount they pay in taxes each year just so government workers have the latest iPhone or laptop. Rather than having this stupid fight about our favorite deductions and tax preferences, why don't we get mad at the real villains and demand that government at all levels reduce their expenditures by one third . . . for starters.

  223. More predictable hypocrisy from the peanut gallery here already. "More efficiency" and "why not just lower taxes" blah blah blah. Of course no one likes to pay taxes. And of course everyone has no problem cutting programs/services/benefits of *someone else.* But when it comes to the programs/services/benefits THEY like/rely on...well then...just try to reduce or remove them and let the howls and whines begin. The only people I'll take seriously in any debate over revenue/spending are people who step up and offer which specific programs/services/benefits THEY like/rely on that THEY are willing to forgo for their tax breaks. The rest are just self-serving hypocrites.

  224. I am all for cutting "anti poverty" and services for illegal aliens. Charity is not the function of government. Another cost savings. Outsource prisons to Mexico.

  225. New Jersey, for one, provides the Federal government with one dollar for every 68 cents it gets back from them. One of the unfairest exchanges of wealth in America. Yet, when a Sandy hurricane happens, the republicans want to short arm NJ on federal aid. Of course the gutless NJ senators and reps allow this to happen without a whimper. NJ, many northeastern states and west coast states contributions enable poor states ( mostly red) to function financially. The new tax bill is an unabashed attack on blue states. The very states that have always fed the government coffers in which the red states feasted from. There is no end to republican's and Trump's evil machinations.

  226. Blue State Democrats are more concerned with "Getting Even" with wealthy Americans and handouts to those that seem to be poor for their entire lives.

  227. This is silly. Our States are not incorporated as charities, and even if you could make charitable contributions to entities that are not registered charities, there is no way you can COMPEL taxpayers to make the equivalent tax amount in charitable contributions. The simplest way to deal with this new reality is to LOWER THE STATE TAXES. That would mean ending welfare as we know it but that is how the cookie crumbles.

  228. and/or spend less on tunnels etc...

  229. You can’t make a charitiable donation mandatory - so that idea won’t work If you make state taxes higher for corporations the corporation will seek to hire in lower taxed states. So that won’t work What can a state do? Take a page from Florida and tax non residents for higher property taxes. Tax the golf courses (I know a guy in the whitehouse who has golf courses in NY, NJ, and CA) Tax investment properties at higher rates. Take a look at HIS businesses and come up with taxes that are tailor made - this is war - is it not? All those foreign business owners laundering their money in expensive real estate should pay a price to the state - in real estate taxes, in purchasing and in selling. Every transaction should cost them - bigly.

  230. Of course they could also reduce state taxes....

  231. If people wanted to live in states with substandard, under financed services, they can currently move to one. Too bad all the high-paying jobs are in states that actually pay for infrastructure, healthcare and education. Social services matter.

  232. "Companies would reduce workers’ pay by the amount of the payroll tax," Excuse me?

  233. Nice article but when I got to this part "payroll taxes paid by employers, similar to existing taxes for Social Security and unemployment insurance" I realized that the author does not know what he is talking about. Both the employer and employee contribute to both. They have no real chance to stop this and frankly I am not worried about people who have more than $10,000 in state taxes. You really are talking about well off people. But of course these are the people that even liberal states worry about. The real issue is should the federal government be subsidizing state governments? Because every deduction you allow means less money for the federal government to spend on everything from health care to the military.

  234. 1 word: Fraud. A fraud perpetrated on the American people by California or any other state which such a plan. A better solution would be to reduce the outrageous taxes these states impose on their citizens, especially on the elderly.

  235. Because services are free right? State workers don't expect to be paid for their jobs? Unlike the federal government, the states actually do have to balance their budgets.

  236. It seems FL and NH can manage without state income taxes why can't NY, NJ or CT? Unions and govt. malfeasance are ruining these states.

  237. We here in California pay more Federal taxes and get fewer Federal benefits than all the Red States combined. Where is the fraud you claim?

  238. Why should low tax state's people subsidize high tax state's people? Its simply wrong. Also I don't see why the left wingers are complaining. They LOVE high taxes! As to the right response from high tax states: lower taxes, change from income to sales taxes, or to payroll taxes, or other creative things. I'm a conservative and libertarian, and don't like the idea of high tax states suing the Feds ... after all, this change just evens the score, not un-evens it. But there's nothing wrong with the high tax states playing games with their tax codes to game the Feds. Of course, low tax states and mid-tax ones like mine can play that game too.

  239. Low tax States aren't subsidizing high tax States, it is quite the opposite - high tax States providing better services to people and higher living standards attract more educated workforce and end up paying more to the federal budget than they are getting back from it. It is exactly the opposite for the low tax States - they pay less than they get, which means that high tax blue States already subsidize low tax States, this law is only exacerbating that problem even more. It is deeply unfair and should be challenged in federal courts.

  240. Doug, you got it upside down. Currently, the high tax states like California and New York are subsidizing the low tax states and this will even be more the case under the tax "reform". Left wingers (what do you mean by that btw?) dislike high taxes as much as right wingers, but at least they understand they get something back for their taxes in a more efficient way than if they had to pay themselves - or would you like to maintain the piece of road in front of your home yourself instead of your town? Sales taxes disproportionally affect the lower income groups, unless you restrict them to luxury goods, cigarettes, soft drugs and alcohol.

  241. To you and the others who are getting your talking points from Fox News - move to another country. Payroll and sales taxes are an inordinate burden on the poor. You favor easing the burden on the very rich who, traditionally, have been taxed at a higher rate, especially back in the 50s and 60s, when this country had a truly progressive tax rate and people who made more money paid a higher share and we actually got things done and built in this country. As for "evening the score," the blue states have paid for the red states' services for decades. I would LOVE to even out that score. We will soon all end up like Kansas, where this moronic dogma has been conclusively proven to be wrong - again. Give it up. Get your numbers straight.

  242. Legal challenges are a bad idea in practice and in theory. The democrats have a bad habbit of running to a judge whenever a law they dont like is passed. Its going to destroy any impartiality the courts had left as well as any power the judiciary has.

  243. Dems have a bad habit of running to judges? Face palm. The Orange Blowhard is notorious for running to judges whenever he wants something. The Reds have stacked the Congress (who writes the laws) and SCOTUS (who interprets them).

  244. Republicans have the same, or worse, bad habit. Wedding cake, anyone?

  245. I think its time for New York State to leave the Union and replace the UK as a new member of the European Union - NYC would remain the most powerful finance place in the world for decades, uniting the current London and New York business. New Yorkers would cease to pay federal taxes, and that would be the end of it - cheers!

  246. HAHA! And what mechanism would enable a State to start a process to leave the Republic?

  247. Sorry NY, CA will beat you to it. If we were our own country we would be thin the top 10 GNPs.

  248. The EU would be glad to have you. Please bring along Massachusetts.

  249. Let's add a provision to the tax code that gives the GOP what they say they want: no progressive taxes, no "redistribution" to reduce inequality. Simply provide that no state shall receive back from the Feds more than they pay in Federal taxes. What could be more truly Republican? Pay a lot, get a lot; pay little, get little. Don't be a Taker! Could be a little rough on the Red states, but hey, it's their responsibility to pay their own way and not extort money from the wealthy. Tell them to get a job!

  250. Taxation without representation. Plain and simple. More democratic votes are cast for president and, in aggregate, for Congress and yet we control neither and our tax dollars will be leveraged to usurping republican-captured states. This cannot and will not stand.

  251. A moment to acknowledge that citizens of our nation's capital continue to be taxed with NO vote at all in Congress -- and high D.C. SALT are among the Blue.

  252. NJ most certainly has representation in the Federal gov't. NJ has 12 US Representatives and 2 US Senators. If your US Representatives and US Senators are not representing you at the Federal Level, perhaps you ought to change that. I'm counting 5 Republican US Representatives from NJ. How did they vote on the tax bill? This can stand, will stand and has stood for more than 200 years!

  253. True, true.

  254. Don't forget the defense budget is largely Red State welfare. If you examine the $640 billion Pentagon "operations" budget, over 70% of those funds go into base operations. All those private contractors who are performing duties like food prep, logistics, maintenance (jobs that were normally part of enlisted personnel's duties) are paid for by taxpayers. That's not even including private security contractors for base operations (let that sink in for a moment). Where are these bases located? Primarily Red States. One forth of the Texas economy is reliant on Pentagon base operations budget. If Republicans want to play budget games, it's time Blue States start pulling the same "state's rights" mantra.

  255. "Don't forget the defense budget is largely Red State welfare." And the spilt blood and guts of the country's military men and women is also borne unequally by the Red states.

  256. California used to have major military bases. A previous republican administration in Washington, DC, closed most of the military bases in California a couple of decades ago so trying to "blame" California for taking advantage of military support from Red States is ironic. The Red States have retained their military bases due to republican pork barrel politics in Washington, DC. California is not an anti-military state. It was punished by another republican administration which deliberately moved military installations from a perimeter state (one more likely to be attacked by enemies of the USA) to repuplican controlled states in order to award those states for voting republican. Red states rely on the federal government funds from Blue state taxpayers to subsidize their local economies. Blue state taxpayers believe in taxing themselves locally for desired services in their states. The so called tax reform bill was a blantant and successful attempt to shift ever more of the burden for Red State finances (many of those states would collapse financially without federal subsidies) to taxpayers in Blue states. As far the comment about moving vans leaving with the belongings of Californias to other states: I have known some Californians (not native born) who have done so over the decades. Many end up not happy in their new Red States with low taxes and low services and xenophobic residents. (Florida seems to be the exception.) Many end up returning even though it is costly.

  257. The lead to this article on the Times' online home page reads in part: "Governments, as a rule, have not sought to exploit tax loopholes. But state leaders said Congress, in singling out certain states, had broken an implicit compact with them." I live in a high tax state, so the change in the new tax law affects me negatively. To be fair, however, the status quo ante already singled out certain states, specifically, low tax states whose citizens essentially subsidized high tax states since citizens of low tax states did not benefit from the state and local tax deduction. To put it another way, under the old rules, citizens of high tax states got to offset those taxes by deducting them from their federal taxes, thus lowering their federal tax liability. Citizens of low tax states got very little benefit from deducting state and local taxes, essentially subsidizing residents of high tax states who got those benefits. How was that any more fair than the new situation which, in essence, provides a more level playing field at the federal level?

  258. Except Federal payments are highly skewed from Blue (higher state tax states) to Red (low state tax states). 9/10 of taker States are Red States.

  259. The flaw in your argument is that the blue states are the economic engine for the Federal Government. Below is a partial list of states' contribution to the Fed vs the states' benefit from the Fed. This new tax bill skews these numbers further in the disfavor of blue states ... and worse, does it just because they are blue. California Fed Taxes Paid: $10,408 Fed Spending: $8,967 New York Fed Taxes Paid: $13,659 Fed Spending: $9,940 Connecticut Fed Taxes Paid: $16,507 Fed Spending: $11,527 New Jersey Fed Taxes Paid: $17,226 Fed Spending: $9,279 Massachusetts Fed Taxes Paid: $15,927 Fed Spending: $11,300 Now the Red States: West Virginia Fed Taxes Paid: $4,005 Fed Spending: $11,496 Mississippi Fed Taxes Paid: $3,836 Fed Spending: $11,469 Alabama Fed Taxes Paid: $5,165 Fed Spending: $11,743 Kentucky Fed Taxes Paid: $7,392 Fed Spending: $10,927 Alaska Fed Taxes Paid: $7,751 Fed Spending: $14,375 (info from the 2014 Pew report.)

  260. Anyone else ever think about the atlas shrugged ideology, only the irony being that the democrats are the ones producing everything and being pushed to the brink. What would happen if the democrats left and went to Toronto or London and took the wealth they were creating with them? The republican states empirically rely on the blue states wealth. It is simple math. Paul Ryan and trump might be careful what they wish for. John Galt appears to be more liberal than Ayn Rand made out.

  261. It has been obvious for a long time that Blue states subsidize poor red states. I've visited every red state, and the number of poor white people and the way they live is amazing. Poverty everywhere, but some things I saw in the richest country in the world were utterly jaw dropping. And they still will vote for the GOP and Trump,

  262. "...and took the wealth they are creating with them." You're kidding, right? Do you think maybe that $4 trillion in newly printed money the Federal Reserve has cranked into the system over the past 10 years might have something to do with all the "wealth" that Wall Street is supposedly "creating"?

  263. Uuuh - they did... Right idea - wrong cities... Try adding Dublin to your list...

  264. I can't see how the payroll tax idea can work. Retirees then pay nothing? Rich taxpayers and all capitalists with investment income pay little or nothing? Low income wage earners making minimum wage cannot take a pay cut even if their employer tried to offset the payroll tax. Dead on arrival, methinks. The charitable contribution concept is intriguing and is where energy should be devoted. What is good for the goose is good for the gander. Contributions to public schools should be just as worthy as contributions to private schools, right? In California where the Dems control Sacramento, they could probably achieve this workaround but Prop 13 might make it hard to reverse the vasectomy if GOP Congress then outlaws charitable contributions to state governments. Putting that realistic risk aside -- Who wouldn't prefer to pay into a charitable fund for essential or good-government causes (education, public safety, etc) and take a 100% state tax deduction while getting to write it off on the federal 1040?

  265. And if most taxpayers prefer to donate to Save the Whales or their local animal shelter? You can't mandate contributions to a specific cause or group.

  266. Actually a state can. Done all the time. Tax credits for specified donations just take a look at the current Cali tax forms. I think that is doable but obviously will require court test

  267. One big way to reduce the tax burden on NY, CA, NJ, CT is to keep these states Federal Tax contribution to the National GDP in our own states - let's see how fast the other state's congress people will scrabble to equalize the Tax contributions to the Fed. Also - I am a total believer in - these states working the system for Trump - Republican Tax Reform loopholes.

  268. One big way to reduce the tax burden on NY, CA, NJ, CT is to keep these states Federal Tax contribution to the National GDP in our own states ================== States don't collect and pay income tax to the federal government. Individuals pay those taxes. Good luck

  269. CA is 13% state income tax.. Jerry Brown just raised gas prices TWICE to pay for new roads .. I seriously doubt he'll help in any way to offset the new tax code. Unless it involves a public sector union - Jerry could care less about the struggles of CA residents.

  270. That 13% rate only applies to taxable income in excess of $1 million. I'd vote for that to be 20%. And California does far more for its residents than almost any other state - we have our own state disability insurance program (every employee in CA has disability insurance, & it's pretty generous - comes in dang handy if you're hurt & can't work); state-mandated paid sick days, too. Improving clean air; clean water. The increase in the gas tax is necessary to fix our infrastructure, since the Feds under Trump are obviously not going to do it.

  271. I adore California. I adore California's magnificent roads. I happily pay my taxes when I can see obvious results. Now you go drive in Kansas and Wisconsin. Prepare for your fillings to get knocked out.

  272. Thanks, Carol. My sentiments exactly.

  273. all my wealthy friends in NYC either have moved fulltime or now spend 6 months and 5 days in Fla. I will be joining in 2018... State taxes are obscene even WITH THE DEDUCTION BYE BYE

  274. All of your "wealthy friends" moving to Florida? BYE BYE? Are you bragging? New York's state budget gets back 89 cents for each dollar sent to the Federal Government. It's a donor state and yet above average in how NY State's children are educated, housed, employed, and given access to medical care. New York City is one of the top tourist destinations because of its multiculturalism and amenities. Florida takes, takes, takes and leaves many of its children vulnerable to undereducation, underemployment, and hunger (though NY City's own statistics on childhood poverty are miserable.) Can I guess that some of your wealthy friends allowed the state to educate their children handsomely? But now the price to stay has conveniently become too high. It's all a game to those who can afford to play.

  275. Enjoy the hurricanes, heat, snakes and alligators. Oh and the mosquitoes carrying diseases like ZIKA. And be careful where you buy a house as the overuse of ground water is causing more and more caveins since the state is underlain by lots of underground springs that are diminishing. That brings me to the subject of clean water since so many of the sources are being contaminated by the intrusion of salt water. Those are some of the reasons we moved north. And I haven't even mentioned the stand your ground law which gives someone the right to kill you if you "scare" them in any way.

  276. What drives the high taxes in States is the expectation of services the citizenry has come to expect and often take for granted. This includes snow plowing and sanding of roads, garbage and recycling programs, a large number of school districts that are more locally controlled, and police , fire and EMS services. Once again the blue states are punished not only for how they vote but by simple geographic location. The maintenance of roads due to the four seasons is going to be much more expensive in New York than Florida. President Trump and the Republicans are imposing their political will unfairly and speak out of both sides of their mouths. They speak of rebuilding and improving our infrastructure and taking care of our Veterans, all the while cutting support for these programs in budgets. The VA has been informed, cuts are coming. The Republicans miss the simple fact that services and support use a large number of employees to deliver the aforementioned needs of the citizenry. There are instances where technology can cut the costs of services, such as toll collecting. Technology comes with a caveat, it must be updated and when it fails, the cost of repair can be substantial. We , as a Nation, cannot cut our way to excellence.

  277. Remember the Kansas!

  278. Most California roads are located where it's warm and dry.

  279. What drives the high taxes in States is the expectation of services the citizenry has come to expect and often take for granted. This includes snow plowing and sanding of roads, garbage and recycling programs, a large number of school districts that are more locally controlled, and police , fire and EMS services. Once again the blue states are punished not only for how they vote but by simple geographic location. The maintenance of roads due to the four seasons is going to be much more expensive in New York ======================= Actually, here in Colorado we have all of those services (with high quality) and we fund them with moderate property taxes and a maximum income tax rate of 4.6%. That's also in a state with "four seasons" weather.

  280. Part of the reason why low tax states have been able to keep taxes low is that many of them receive more in services from the Federal government than they pay in Federal taxes. The opposite is true in most high tax states. This federal redistribution of tax monies towards low tax states, mostly red states, and away from high tax states, mostly blue states, amounts to a subsidy that allows taxes to remain low. This has been true for decades and has amounted to transfers of billions to subsidize low tax states. Politicians who hector blue states to lower tax rates should be reminded of this longstanding redistribution.

  281. You hit the nail on the head. This is precisely why Mitch McConnell's home state of Kentucky has an increasing amount of millionaires (himself worth over $32 million) and is one of the poorest states receiving the lion's share of Federal taxes. These are the folks who keep crying state's rights, it seems like they can take care of themselves with all those millionaires not paying taxes.

  282. It's time to cut of the red state welfare. They say they don't want it, and blue state don't want to pay anymore. Why does it continue? The good will is gone.

  283. I as a liberal Democrat planned on voting for any Republican candidate for governor of New York because of the state of our Subway system, hoping that acts of pretest like that would increase accountability. However, if NY passes something that allows this this, I would vote for Cuomo and would personally donate to his reelection campaign: "states encourage residents to donate money to their state governments, then let the governments credit those donations against their state income taxes."

  284. You are the reason we are in this mess

  285. Acts of protest in 2016 got us Trump and Republican majorities in Congress. How has that helped?

  286. In densely populated states like CA, NY, NJ, CT and MA -- home to major ports, large multinational corporations, scientific and business innovation (e.g., Silicon Valley / Route 128), the capital markets and lenders to farmers and energy companies in Red States -- we need to fund infrastructure (including public transportation) in ways that most other states do not. The rest of the country, including the Red States whose congressmen just choose to punish us, benefit immensely from the economic foundation and stimulus we provide to the rest of the country. These five states are major international gateways and sources of income for the Red States' wheat, meat, corn, bacon, oil and gas, not to mention leading tourist destinations (SF, LA, NY, Boston). I wish there was a way to impose duties on Red State products and an airport surcharge on Red State visitors, knowing full well that would violate inter-state commerce laws.

  287. I would have a very different (and more tolerant) view of NYS/NYC taxes if they were primarily funding infrastructure necessary to support economic activity. However, it's the extensive social welfare spend that really drives our excessive tax levels.

  288. I have to laugh at the charitable contribution idea. It isn't new: there are a number of private K-12 schools that have adopted it to make "tuition" tax deductible. However, for the "donation" portion to qualify as a charitable contribution it must be voluntary. There may be some citizens in places like - say, New York and San Francisco - who'll be willing to make voluntary contributions to their cities, but I don't think you'll find many elsewhere.

  289. ? I bet everyone would gladly/eagerly voluntarily donate an equivalent amount to what their State tax burden above $10K if it would be used as offset against Federal taxes.

  290. Stratman, I think you will find that the progressive proposal does not pertain to municipal governments but state governments. And as you reveal your disdain for anybody outside of San Francisco and New New York City, you just revealed the basic problem for progressives, snobbery.

  291. Only if they understand/feel that their state government needs the SALT money to provide different services for them.If people feel SALT money is wasted by state gov then why would they voluntarily donate the money.Fed gov is only going to tax some part of it,remaining stays with them to spend/save.

  292. It's weird to see Democrats whining about paying more taxes. Taxes for everybody else = good, taxes for liberals = bad. President Trump and the Republicans merely reduced a tax expenditure that benefited high tax states at the expense of low tax states. The SALT deduction distorted housing markets and state competitiveness. It's part of the reason NYC subways cost $3.5bn per mile, as the system of graft and corruption feeds on the high local tax dollars enabled by the SALT deduction. Indeed, elimination of the SALT deduction will force states like NY to fight corruption, rather than embrace it. With a more level playing field, talent, labor and jobs will find their way to the most optimal outcome, which may not be on the coasts. It's also interesting to read that Democrats are wary of efforts to cut taxes, because their agenda is based entirely on raising taxes. I am thinking Americans may be better stewards of their own money. But I keep remembering how Obama taught us that we didn't earn/build that. In Progressiveland, your money belongs to the government, so they can allocate it to their partisan friends. Why do you think Washington D.C. and the political class did so well during the Obama years? Anyway, the SALT deduction elimination is inherently equitable to all but those who profited from its existence.

  293. You mean those states who provided for high quality services are being hurt in order to subsidize states who rely on the federal government to provide their services?

  294. Your premise is wrong. I pay more tax under the Affordable Care Act and don't mind because it enables more people to access health care, which I already have. Paying more in taxes by reducing my SALT deduction so the GOP can answer to their donors is problematic, not to mention a transparent attack on Blue states. Greed and fear, the defining tenets of the current GOP.

  295. The SALT deduction is in the Constitutional amendment that allowed the Federal Government to collect income tax in the first place. Time for more discussion about this.

  296. It is understandable that the states who were targeted for tax increases for obvious political pay back would try to find a way around this unfair treatment by the Republicans in Congress. This was an effort to make generous socially progressive states, the skin flint Republicans abhor, to use a razor thin congressional margin to force changes on states they do not control. All this talk about infrastructure repair is out the window since the states have taken over primary responsibility to pay for infrastructure up keep. This greed fest luxuriates in the warm glow of the Wall Street boom which was going strong with taxes at 35%.

  297. Why is it that the only way the nation's tax code can change is toward greater complexity? It's certainly not because it is the only way to distribute the nation's wealth more equitably. Thanks GOP.

  298. In NJ, one thing I can say is that there are too many townships. Too many towns, too many sheriffs, police departments, fire departments, etc. A consolidation of all the townships and boroughs would help reduce costs, or at least a consolidation of services.

  299. And just think of the benefit of putting all those people out of work. Time for those takers to become real makers and when it takes longer for a fire truck or ambulance or the police to get to you in a real emergency, you will just remind yourself of all the money saved by cutting those services!

  300. Good for NJ, NY and CA and other state legislatures. I have come to expect good services from my state and local government. It is one of the reasons I don’t mind paying SALT. My schools are excellent, roads are paved, neighborhood is safe and air and water is cleaner than it would be without my state regulations. States should also consider legislation to help retirees who are facing a loss of these deductions. Pension taxes could be taken from the pension administrators thereby never showing up as income. It is similar to the charity donation one can make via one’s IRA administrator and a required minimum distribution does not show up as income. Lowering the punitive income brackets will nullify gops vindictiveness.

  301. Your schools are excellent because high property taxes = high home prices = fewer poor kids in the district. If high taxes translated to good schools, no one in Newark or NYC would move to the suburbs.

  302. "Lowering the punitive income brackets will nullify gops vindictiveness." Yes, they have been particularly vindictive towards the wealthy by limiting their SALT deductions.

  303. Honeybee, the schools in Texas are only as good as the property taxes collected in the district. Same in other red states. Wealthy areas of Dallas have better schools than small town or poorer areas of your state.

  304. How do some states provide the “level of services that residents expect” without having the punishing tax burdens that exist in NY, NJ, Ca, and Ct? They live within their means. The end result in 5 years will be a significant reduction in state and local taxes. Residents who have the greatest burden will move to other states and the loss of revenue for high tax states will not be recoverable from those who remain behind

  305. It's not just about "levels of service." It's about the fact that high-cost, high-income, high-tax states subsidize the "some states" you speak of, receiving LESS back from the federal gov'ment than they pay into the Treasury. The "some states" you'd like to deify are the welfare queens, depending on others to fund their public costs. Make it across the board that no state receives back from the feds more than it pays in federal income tax, and then we can talk about state and local tax deductibility on the federal tax return.

  306. It’s more complicated. Higher-wage states, mainly coastal and blue, create their own economies. Think of the NYC region - when you have very high earners setting the pace for the economy it puts pressure on all other aspects of that economy. If you think of real estate, for instance, higher incomes result in higher real estate /housing costs - and for police or firefighters, etc, etc, to compete they in turn MUST have incomes that allow them to exist within those economies. Last I checked, it was still essential to have police and fire protection- and teachers - and all other aspects of society. How do the rich expect to have cleaning people and nannies, etc, etc??

  307. And yet no one is moving to Kansas, the poster child for low-tax, low-investment, negative return trickle-down ideology.

  308. I agree with the article's parting words of Mr. Barnes, the only way to combat this unconstitutional, inequitable taxation is for Democrats to win back both the Senate and the House. Unfortunately, this is only the first of two steps: they must also win back the White House in 2020. If 'Part I' is achieved, they will never must a veto-proof repeal, and any passed tax correction will not become law. The Democrats could nibble around the edges, and attach amendments to Omnibus and other spending bills, but those would be bandaids and not put a serious dent in the harm done to middle class families in the most affected states. The 'charity switch' concept is novel, but I imagine would not pass muster in the courts,

  309. "but those would be bandaids and not put a serious dent in the harm done to middle class families in the most affected states. " What member of the middle class is impacted by this tax law change? There is a $10K deduction that remains so the ONLY people Impacted are the wealthy. Why do the progs want tax laws that help the wealthy?

  310. I don't want tax laws that help the wealthy and the corporations, they already receive plenty of help via loopholes, write offs, tax havens, etc. - and now the largest cuts of any category. I would like to see tax laws that are equitable across all economic strata. The Republican tax reform just passed is heavily favored to those two groups (and well documented), and now the states that are impacted have to scramble to re-level the playing field. It won't be a simple task.

  311. Perhaps the states can lower resident taxes and instead levy huge taxes on federal assets within their jurisdictions. Currently Uncle Sam is taking far more than he gives in high-tax blue states, so it's time to even the playing field.

  312. "Perhaps the states can lower resident taxes and instead levy huge taxes on federal assets within their jurisdictions." Like what? "Currently Uncle Sam is taking far more than he gives in high-tax blue states, so it's time to even the playing field." That's complete nonsense and totally false. What is true is that Red voters in ALL states pay more in taxes and get less in benefits than Blue voters in all states.

  313. That's just not true. Can you cite any study which upholds your specious claim?

  314. It appears from a lot of the comments how unaware many people are that the high-tax states already suffer a net outflow to the Federal Government in relation to the dollar value of the amount they receive; at one time in the 2000s, I read that California only got 75 cents back for every dollar in Federal income tax it remitted, yet it provides a huge percentage of the country's GDP. Many of the poor red states receive more than they remit. That issue aside, the idea that Democrats "like" to pay taxes is inane; perhaps a better way to explain it is that they feel it's patriotic to support their country by helping to fund it. But aren't high-tax state residents already bearing that burden disproportionately? And who *wouldn't* complain about an obviously political decision to punish blue states to help transfer wealth to the very rich?

  315. That's what we get in a country that elects a narrow minded vengeful president who has no experience being anything more than a selfish brat. Especially when it's combined with a majority party that sees anyone or state that isn't like them as elites rather than as fellow citizens. This has nothing to do with sensible tax policies, concern for the welfare of Americans as a whole, or even real long term goals. All the GOP and Trump care about is revenge for not voting for them and their questionable policies. Let's see what their excuses will be when major cities in blue states can't fund the things that keep us humming as a country from coast to coast. We are supposed to be the United States of America not the Untethered States of America. Trump is treating us like the Unnecessary States of America even though we send more money to DC than we get back. I fervently hope that there is a way NY and other states similarly affected can find to lower the amount of money they send to DC. Then we'll see how the poorer states do when they have to cope on their own without the additional funds we provide. Maybe they'll learn the true meaning of welfare: taking care of their citizens without relying on the federal government they claim to despise while taking from it at the same time.

  316. Create a mechanism that allows an employee to let his employer pay a tax, that would be deductible as a business expense in exchange for an equitable reduction in wage and an elimination of a state income tax. Granted this might put some union contracts through the wringer.

  317. Isn't there a legal argument against double taxation? States and the Federal government are part of the same government structure. In a rational world, the different layers of the government should either have completely shared tax rules (the way state and county taxes work - in PA, 3.07% for the state plus up to 1% for the county), or should come in a certain picking order, in a way that the next one doesn't tax the money paid to the previous layer (the way payroll tax reduces taxable income). Republicans love the argument that states are the more basic entity, so in a layered approach the states should come before the Feds. Then, the money already taken away by a state is not really part of one's income as far as the Feds are concerned.

  318. I'm really getting tired of the argument that blue states send money to red states. "States" don't send any money, and as a percentage, receive very little to or from the federal government. Money is paid by individuals living within states, and most money is returned to individuals through Social Security, Medicare and Medicaid. The political makeup of the "state" as a whole is irrelevant. In any event, the argument that blue states have a high tax burden because they pay for more local services is just nonsense. Just a few days ago, there was an article about how union rules and other laws make subway construction in New York cost over 5 times as much as it does elsewhere. Blue states have higher tax burdens not because of useful spending, but because of overly generous salaries and pensions to public sector employees as well as overly generous Medicaid spending (New York spends 50% more than the national average on Medicaid per capita). There are ways to provide good schools, libraries and parks without spending the amount of money the blue states spend.

  319. But few in the tax and spend states want to hear the truth

  320. @Jon W- I've forgotten, please remind me again: Why are folks on Medicaid or other public assistance? Please don't insult me by giving the stock answer; they are lazy and need to get off their butts or birthing "too many" children.

  321. What you say makes no sense at all. Many red states have the worst public education, healthcare, and other social programs.

  322. Since residents of high tax states are happy and proud of the generous services their states offer, why are they not then happy to pay for these services themselves? Why insist that the rest of the nation subsidize your desired spending levels? Leveling the playing field will help us understand how much people truly value the services provided. When people are forced to pay themselves for what their government is actually doing, you probably won't have many more subways built at $3.5 billion per mile with 80% of that siphoned off to pay for political favors.

  323. The top rate was lowered to 37% from 39%. Why not impose a millionaires tax? It's time to recapture some of the windfall coming to the very wealthy. As for all who fear corporations fleeing NYC, SF, Boston and other major blue states, they moved their back offices years ago. They don't move their corporate headquarters because, let's face it, the top employees don't want to move to Mississippi, Alabama, Oklahoma, South Dakota, or even Florida. Yes, the taxes are lower, but the educational systems are much worse, as are cultural options. Look at the Koch brothers - they don't live in Kansas but on the upper east side. Wonder way??

  324. I live in NY, and have something to say to those crying about low-tax states “subsidizing” high-tax states like NJ, NY, and CA: Those states already pay far more in federal taxes than they receive. The fact is, WE have been subsidizing the rest of the country all along, even with the deductions for state and local taxes. It just makes me sick to hear conservatives whine about “liberal” fiscal policy while they milk the teat of successful liberal states to fill the fiscal voids left by their own nonsensical policies. Maybe instead of ridiculing these states for their high taxes, people should consider why it is that they have high taxes, yet are STILL prosperous enough to give away money to so many low tax states that can’t make ends meet.

  325. True.