[gruez]

>It's particularly offensive to see the state and local tax deduction (money that actually goes to help one's fellows in the ways they see fit, without being beholden to the whims of the "donor") capped while 503c "donations" remain an unlimited deduction.

The point of charitable deductions is to incentivize certain types of behavior (ie. charitable donations). On the other hand the SALT deduction is effectively the federal government subsidizing high-tax jurisdictions at the expense of low-tax jurisdictions. The first seems far more defensible and in line with the federal government's mission[1], than some sort of mechanism to pad the finances of certain states. This doesn't necessarily exclude redistribute policies by the federal government entirely, but doing it by tax rate is baffling no matter how you look at it.

[1] and no, this argument doesn't work for the SALT deduction because state/local taxes aren't optional

[Spooky23]

Not really. Flyover and southern states in particular mooch off of the productive locales.

So not only do I need to pay more taxes for the US government to fund almost double my states pro rata aid to places like West Virginia and Mississippi, but I get to pay even higher taxes because my locality actually provides things like sound education.

You know what, I think we should exercise the people’s desire for small government and relocate military bases to the places that pay for them.

[gwbrooks]

> So not only do I need to pay more taxes for the US government to fund almost double my states pro rata aid to places like West Virginia and Mississippi, but... (snip)

Wouldn't the most effective solution be to reduce the number of things the federal government does? Rich blue states make their choices and keep more of their revenue within state boundaries and residents of red states get to decide if they like their current choices lower (or no) federal subsidy.

Practically speaking (not politically speaking), that seems like a point the left and right should be able to agree on.

[Spooky23]

I’d prefer to live in a modern society where we get to share the immense wealth of our nation in a way that promotes the general welfare.

I’ve run into so many people in my time who’ve had to suffer in various ways because of senseless circumstances. One person lost their home due to a medical condition and the associated costs. Had it happened 6 months before his employee health plan changed, his family’s life would have taken a dramatically different path.

[inglor_cz]

My European experience says that even relatively small countries the size of Mississippi themselves have a fair share of folks kvetching that the richer parts subsidize the poorer parts. Few places are small or homogeneous enough not to experience that. A continent-wide country like the US can hardly escape the same.

It is even worse if there is an ethnic difference in the mix (e.g. the Flemish vs. the Walloons in Belgium).

Also, I wonder whether New York / California liberals would really welcome soldiers among them and whether the military could recruit enough people there. Amazon got kicked out from New York for being too capitalist.

It definitely seems to me that the coastal elite wants a strong military to protect their trade empire, but preferrably located far away and with someone else's kids doing the dangerous parts of the job.

[corrral]

A crucial (though obviously not the only!) purpose of the US military is to provide a jobs program with nearly European/white-collar-US level social benefits (healthcare, college, retirement, even housing) to people with few options. It stands to reason this means volunteers disproportionately come from states with weak economies.

[anamax]

> I get to pay even higher taxes because my locality actually provides things like sound education.

Which your area benefits from....

[yial]

I’m not sure about the wealth of the country , but many people still don’t have running water or plumbing.

https://www.washingtonpost.com/national/after-generations-of...

That’s a problem that seems to Mostly being addressed by nonprofits very slowly, and not the government …

[gruez]

> Not really. Flyover and southern states in particular mooch off of the productive locales.

Addressed in my original comment (although it was edited in a few minutes after initial posting so I'll let it slide):

>This doesn't necessarily exclude redistribute policies by the federal government entirely, but doing it by tax rate is baffling no matter how you look at it.

[kortilla]

> I think we should exercise the people’s desire for small government and relocate military bases to the places that pay for them

Do you know what military bases do? They aren’t there to protect just a local region.

[nosianu]

But that's not the point. Aside from what military does when military does something, military installations are a huge factor in the areas where they are. When Trump threatened to remove US military bases from Germany - where I live - the main issue here in Germany was the significant economic impact on those local areas, often in less developed more remote regions.

https://www.dw.com/en/german-towns-face-economic-hit-should-... -- "German towns face economic hit should US troops go"

Much of the military is used by politicians as an economic tool for certain regions, independent of their fighting value.

So, you certainly have a mostly local economic impact of military bases.

https://www.areadevelopment.com/siteSelection/june09/militar...

https://www.tpr.org/military-veterans-issues/2020-06-22/texa...

OPs flippant comment reminds me of the equally un-serious suggestion I read somewhere, some time ago, that people should pay for their jobs so that it can be made visible how valuable they think a job is.

[User23]

Your offer is acceptable.

[lmm]

Tax deductions shouldn't be incentives for random policy ideas, they should keep the tax system fair by taxing people on income that really is theirs to dispose of freely. The fact that people don't have any choice about whether to pay state or local taxes is precisely why they should be able to deduct them from their federal taxes.

[gruez]

>Tax deductions shouldn't be incentives for random policy ideas

Taxes are one of the main ways the government tries to influence behavior (eg. sin taxes, green energy incentives). What do you suggest should take their place? Or do you think that government shouldn't be in the business of influencing behavior entirely?

[lmm]

If the government wants to pay people money out of the general taxation fund to undertake certain behaviours, let it do so directly, where we can see it and account for it, rather than through deductions.

[cycomanic]

That's actually a very good point. Tax deductions in contrast to direct payments typically favor high income individuals over poorer people. At the same time for the government to get the greatest impact of your policy, which typically means influencing the behavior of the maximum amount of people. Again this would point to targeting the poor&middle class.

[sokoloff]

One of the largest* tax deductions comes from the paying of people’s wages for jobs. That’s a tax deduction where the economic benefit of the overall transaction goes much more to the wage recipient than to the entity taking the deduction.

It seems unreasonable for employers to not be able to deduct that amount and for the government to somehow pay them a fraction of what it costs to employ people.

* - I suspect it’s the largest overall, but didn’t have time to do the research to satisfy myself that it’s the single largest, but it’s clearly one of the largest.

[gruez]

> One of the largest* tax deductions comes from the paying of people’s wages for jobs. That’s a tax deduction where the economic benefit of the overall transaction goes much more to the wage recipient than to the entity taking the deduction.

To be fair it's not wages that are benefited specifically here, it's business expenses in general. If anything, wages are treated worse than other expenses (eg. buying a printer), because they're subject to payroll taxes. As for why expenses are deductible in the first place, that's done for a good reason as well. If you don't do that, you end up taxing x% for each step in the value chain, which would give huge tax benefits to conglomerates (which own the entire value chain) compared to small businesses.

[winstonewert]

Well, you do have a choice, you could move to a lower tax jurisdiction. Different jurisdictions provide different trade-offs in terms of the tax burdens and services rendered. You can move to a jurisdiction that provides your preferred trade-off.

Furthermore, there are lot of costs which you arguably can't avoid: food, medical, housing etc. Should you be able to deduct those off of your federal taxes as well since you can't really dispose of that income freely?

[lmm]

> Well, you do have a choice, you could move to a lower tax jurisdiction. Different jurisdictions provide different trade-offs in terms of the tax burdens and services rendered. You can move to a jurisdiction that provides your preferred trade-off.

If you take that attitude then that invalidates the original argument - in that case, surely it's just as reasonable for the federal government to incentivise local mutual support cooperatives (which is what high-tax jurisdictions ultimately are) as it is to incentivise 503cs.

> Furthermore, there are lot of costs which you arguably can't avoid: food, medical, housing etc. Should you be able to deduct those off of your federal taxes as well since you can't really dispose of that income freely?

Yes, absoutely! The fact that you can't do that unless you structure yourself as a business is one of the great injustices that leads to the rich paying a much lower real tax rate than the poor.

[renewiltord]

States' rights require states' rights to their money. Federal income tax should be near zero and the Senate representatives should offer treaty money.

Enough theft from my pocket. I'll fund my fellow man. But to fund a man who calls himself my enemy and removes my freedom: it takes a Big Government fanatic to require that.