SALT Deductions Are State and Local Issues --- Not Federal

After the Republican Party unveiled its new tax reform plan Thursday, critics of the proposal, including some Republicans from blue states, decried the fact that the plan would eliminate the so-called State and Local Tax (SALT) deduction.


The current SALT deduction benefits residents paying high state and local property taxes, mostly in blue states like California, New York and New Jersey. Some Republican lawmakers from those states came out in opposition to the elimination of the deduction, calling it unfair.

I beg to differ. What is actually unfair is that residents in some blue states paying massive amounts in property taxes each year expect their fellow Americans in more conservative states with less expensive property taxes to absorb the burden of their sizeable federal tax deductions.

Think about it: why should it the problem of someone in Missouri that state and local governments in New York State, for example, are apparently so fiscally irresponsible that they need to raise property taxes to an absolutely asinine level?

The fiscal burden on blue states to balance their budgets should have nothing to do with red states. If states and localities want to provide expensive benefits and services to their residents — fine.


But they need to figure out a way to pay for it and they need to be alright with paying those taxes in addition to their federal taxes. If blue state residents are not willing to do this, then perhaps they should consider moving somewhere with lower state and local taxes.

If enough blue state residents abandon costly state and local taxes, blue states and localities in those blue states will then be forced to revisit their approach to fiscal responsibility. Maybe then they will realize that demanding taxpayers in fiscally responsible states effectively bear the burden of taxpayers in fiscally irresponsible states is not only wrong but that it also won’t work.


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