Hacker News Reader

Comment by ghouse | Hacker News Reader

> Both are (in theory) receiving the same benefits from the Federal Government and should pay the same in taxes.

New York gets about $0.80 for every $1 of taxes paid. Texas gets about $1.50. [1]

[1] https://www.theatlantic.com/business/archive/2014/05/which-s...

OP is talking about comparing families specifically. This talking point doesn't mean anything on the level of a single taxpayer.

You could argue that the family in Texas is getting more services for their tax dollar. But, that is almost certainly false, because people who actually make enough to pay taxes don't tend to consume the kind of services that cost tons of money (aka. social services).

Both states still recieve the same benefits from the federal government, it's mostly just demographic and economic differences that cause different states to receive different amounts of aid. Or do you really think West Virginians, who are mostly poor, should receive exactly the amount as New York, who is much more rich overall?

> Both states still recieve the same benefits from the federal government, it's mostly just demographic and economic differences that cause different states to receive different amounts of aid. Or do you really think West Virginians, who are mostly poor, should receive exactly the amount as New York, who is much more rich overall?

That isn't correct. Pork spending and state-targeted spending to bribe lawmakers has been a traditional political activity since the founding of the US.

You think it's just an accident that the rich states are high tax? No, the rich states have done much more to invest in education, safety nets, and regulation (work place safety, environment, police activity, etc.). That is why they have better economies. This tax bill just takes a look at all that investment and says: nope.

What's worse is that it actively sabotages responsible governance so rural and red state voters can get their revenge for being left behind.

That is why they have better economies.

That's a bit of a stretch, no? The EU has higher tax rates than the US coastal states and their economies generally lag the US.

And Texas has been one of the fastest growing states in the US, yet has some of the lowest taxes.

Should I go on?

> You think it's just an accident that the rich states are high tax? No, the rich states have done much more to invest in education, safety nets, and regulation (work place safety, environment, police activity, etc.). That is why they have better economies. This tax bill just takes a look at all that investment and says: nope.

This right here is the issue: removing the SALT deduction discourages public investment that is a net win before considering the distorting effect of federal taxation, while preserving the deduction means that federal taxes don't have a distorting effect. I've written up a very simplified scenario illustrating this:

https://news.ycombinator.com/item?id=15855955

Reply on news.ycombinator.com