It is virtually impossible to defend the part of the Internal Revenue Code that provides for a deduction for individuals who pay State and Local income taxes (“SALT”). The deduction is simply a subsidy for those states who levy high income taxes on their constituents. It actually incentivizes those states to levy high taxes, knowing that their constituents will have their federal taxes reduced as their state taxes go up. But this is patently unfair to constituents who live in low tax states, whose share of the federal tax burden therefore goes up.
Senator Chuck Schumer is leading the attack against proposed Tax Reform legislation that would eliminate the deduction for SALT. But since there is no rational argument to attack the proposal directly, he argues that the tax deduction is fair because NY (and other big blue states) send much more tax money to Washington than they get back.
But this is hypocrisy of the highest order. It is Schumer’s own preferred legislation that causes this imbalance. He has successfully advocated for policies that greatly increase the size of the federal Government (sends money to DC), that increase the welfare state (benefits going disproportionately to the poorer parts of the country), and substantially raise the tax burden on the wealthy (many of whom live in NY). So he created the problem and is now asking to be bailed out?
As I have repeated many times before, If Kansas ever gouged its farmers, or Texas ever gouged its oilmen, like New York legislators (like Schumer) gouge their financial community, they would be run out of town!