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Old 02-09-2018, 03:55 PM   #104
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Join Date: Feb 2009
Posts: 4,220
Originally Posted by spence View Post
By this logic any deduction by anyone is subsidizing something...that doesn't make a lot of sense.

If there is a certain amount of money government says it must collect in taxes in order to operate, and it collects less from someone because of a deduction, it must make up that amount and get it from someone who can't make that deduction.

And, if the deduction makes it more feasible for a state to raise your taxes because they will be defrayed to the extent that you save in federal tax because of the deduction, then the state is subsidized the amount that your deduction saves you and makes it easier to pay your state tax.

The topic is if blue states contribute more net Federal tax revenue than they consume in Federal funding.

On this point the answer is yes they do.
That's your topic, not mine. The subject is obviously more complex and less meaningful than your "topic" makes it out to be--in many ways. Social Security and transfer payments and food stamps, blah, blah, are "entitlements." The states have no say in whether recipients are "entitled." These transfer payments are to people, not to states. And if those people move to other states, they take their entitlements with them. And states switch from red to blue or blue to red from election to election. Having more "entitled" persons living in states is not as economically useful to states as having wage earners. States can't directly collect taxes on the entitlement payments. And wage earners can spend more taxable money as well as be directly taxed on their wages. And, if it were so profitable to have federal transfer entitlement holders, the blue states should make it more attractive to draw them to their states. I don't know of any efforts to attract more federal welfare recipients to blue states.

Who contributes more to the federal coffers has no special relevant meaning. Is it something to boast about? Is it some sort of bragging rights? It seems what is more important is what amount states force their inhabitants to "contribute." I'd rather brag on living in a state that took less of my money than living in one that took more. But if you're proud of paying more state and federal taxes, then by all means, make that your meaningful topic.
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