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December 29, 2017

Checkin' In With the #SalonHot25: David Frum Has a Great Idea of How Liberal States Can Avoid the "Unfair" New Rules on Deducting State and Local Taxes: A National Carbon Tax!!!

True Conservatism and Enduring Principles you can rely on:

Here's some of this crook-backed Renfield's simperings:

Those extra funds, squeezed disproportionately from states like California, Maryland, New Jersey, and New York, just suffice to offset the revenue loss from the GOP's tax cuts to corporations and pass-through businesses.

Hang on, buddy. Those states impose those taxes themselves, and citizens of those states routinely elect politicians who say we should tax people at higher rates.

Why shouldn't they actually have to live by their own decisions, instead of being subsidized by the rest of the country (by allowing them to deduct their high state taxes from their federal tax payments), and thus held harmless from their own political prescriptions?

He goes on to say that the move should not be undone, because this true blue conservative just generally likes higher taxes. And he's not quite done yet.

Rather than restore these deductions, which have subsidized bad policies, especially in the blue states, the right way to redress Republican sectional chauvinism is by addressing the biggest subsidy to the worst policies of the red states--and especially their profligate spewing of greenhouse gases. Just as the blue states have used the mortgage and state-and-local deductions to offload the cost of their generous state governments, so red states have inflicted on others the climate consequences of their lifestyles.

The map of carbon-intensity by state looks like the map of state and local spending, upside down.

The top five most carbon-efficient jurisdictions are D.C., New York, California, Vermont, and Massachusetts. The five worst: Wyoming, North Dakota, West Virginia, Alaska, and Louisiana.

A carbon tax of $15 per ton would raise something over $700 billion over the next 10 years. That money would a) very neatly balance the 2017 GOP revenue raid on blue-state tax deductions, b) reduce the current carbon-dioxide emissions trajectory by about 10 perent, and c) reduce by half the GOP plan's estimated increase in the federal debt. The revenues from the tax would help to avert the impending cutbacks in Medicare and other health programs about which the GOP House leadership is now noisily contemplating.

It's very odd that the "conservatives" claiming to be most filled with Sacred Honor are simultaneously the most liberal, isn't it?

Meanwhile, Vox is also trying to cook up schemes to help wealthy liberal taxpayers avoid paying the higher taxes they all claim they want to pay:

Under current law, taxpayers not claiming the standard deduction can deduct both their state and local property taxes, and either their state and local income taxes or their state and local sales taxes, whichever is higher. The Republican bill added a new $10,000 maximum for all state and local tax deductions, effectively raising taxes on wealthy people in those states and reducing a key federal subsidy that makes it easier for states to charge high taxes on rich residents.

A few possible options have emerged to evade the new limit, reduce taxes on blue state residents, and reduce future pressure for state tax cuts that the federal law could create. New York Gov. Andrew Cuomo, a Democrat, and the government of DC are urging residents to prepay their 2018 property taxes in 2017, so they can still be deducted. Another route would be for states to create dollar-for-dollar tax credits for all charitable contributions made to the state government. Charitable donations are still deductible under the GOP, so reclassifying state taxes as charity would enable residents to still deduct them at the federal level.

But perhaps the most promising option, teased by a large group of tax law experts and vocally championed by prominent liberal economist Dean Baker, is for states to repeal their income taxes and replace them with employer-side payroll taxes. This might appear like a minor technical change. But it would not only totally offset the new limit on deducting state taxes -- it would amount to a sizable tax cut for many middle-class families and would vastly simplify tax preparation by freeing people up from filing their own state taxes.

So the idea is to make the employer pay taxes, not the employee. This is thus not income to the employee, and so escapes the tax.

Note that this burdens job creation.

Also note that since people can still in fact deduct state and local taxes -- up to $10,000 -- Vox is now championing various dodges so that high income people can specifically avoid "paying their fair share."

Strange, isn't it? It's almost like it's all just a culture war, and that progressives believe in exactly none of the things they claim to believe.

You want to pay higher taxes, babies?

Well here's your big chance.

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posted by Ace at 12:23 PM

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