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Comment by briHass | Hacker News Reader

I assume you're taking a swipe at Team Red, but do remember that the recent TCJA had a provision that removed the ability to deduct state/local (SALT) taxes from your Federal taxes due, above a certain amount. One could consider this very fair: if you argue for higher (Federal) taxes, you should pay what's owed, regardless of what you paid to any local governments, especially since you have much more control over where you live and the taxation policies at the local and state level.

The uproar about this change from Team Blue was palpable; this was clearly a targeted attack on liberal, high-tax areas. The cutoffs for the changes were well above an income level of $150K, which meant it went after the 'rich' that Team Blue always positions as the enemy, but none of that mattered.

Nobody wants more taxation when it actually hits their pocketbook. If there's anything the constituents of the two major political parties can agree on, it's that.

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It was a tax cut bill with tax increases targeted at political enemies. There are many other loopholes that could have been closed but Trump was all about attacking political enemies. The anger wasn't at the tax increases it was about the abuse of power.

Somehow the Red "cut the taxes and spending" never give back the net inflows they take from Blue states.... Blue states have higher taxes to care for their citizens so they have to take less in Federal handouts.

There aren't really blue states. Only blue cities.

https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.pn...

What's the distinction? I always assumed "blue states" meant a majority of voters in that state voted blue, likewise for red states. Otherwise you might as well say "there's no blue cities, only blue neighbourhoods" and keep getting more granular down to the individual voter.

The distinction is that cities are blue and non-cities aren't, as a rule. "Blue states" are just states where the majority of the population lives in cities.

City folk aren't real muricans

That's not how it works:

https://worldpopulationreview.com/state-rankings/donor-state...

California is a net recipient of federal money (though not by a lot). The biggest donors are the blue states in the northeast. But plenty of blue states are recipients and the biggest recipients are the swing states, because politicians shamelessly buy their votes.

And the reason the states in the northeast pay the most isn't because of state-level benefits reducing the need for federal programs (which rarely if ever happens). It's because those states are disproportionately the wealthy people who pay the most taxes.

But getting rid of the SALT deduction didn't care about that. Wealthy people in California lost more than equally wealthy people in New Hampshire, even though California is a net recipient and New Hampshire is a net donor, because New Hampshire has lower state and local taxes.

A state being a net contributor generally means they have a lot of high paying jobs and successful companies concentrated in their state. Michigan is actually a good example as you can see when the big 3 auto companies were at their peak the state was a net contributor, but it has been a receiver since their decline.

But that's not how the federal government is supposed to work? The whole point is for them to engage in redistributive policies, which means you inevitably have "never give back the net inflows they take". I'm sure economically unproductive areas (eg. rural areas) "never give back the net inflows they take from" economically productive areas (ie. major cities), but we don't give people living in cities a tax credit.

This also points to a weird but true situation: Many blue states would be financially better off (or at least neutral) to eliminate federal programs and replace them with state programs, because the smaller the federal budget, the smaller the net outflow from blue cities.

But then they weirdly push for the opposite to the financial detriment of their own constituents, including the lower income ones who could have higher state benefits than existing federal benefits if the feds weren't taking so much of their state's money.

Best guess for why this happens is that the blue team is more captured by government sector lobbyists at the federal level, who don't want to lose jobs to state level government workers.

Then how did the high tax states get high tax?

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