Friday, December 8, 2017

‘Evil’ #TaxCuts? Nope, It’s Blue-State Panic



...If you know anything about California, you likely now know why good old Governor Moonbeam is freaking out. California may be filled with natural wonders, but it’s also a Democratic area chock full of people who earn $200,000 or more — and it’s also known for high state-level income taxes, with a top marginal rate of 13.3 percent. In the bad old days, Californians could count on simply deducting this highway robbery from their federal taxable income, masking the state’s shenanigans and blunting the financial pain. The GOP tax bill yanks what is essentially a federal subsidy away, forcing blue-state residents to face the reality of their local high-tax, high-spending regimes....

This is basic federalism at work. In theory, it should encourage accountability, particularly among high-tax states long dependent on the federal tax code to soften the blow. But as we all know, accountability is no fun. Public panicking and blaming “the rich” — this is all rather hilarious, given that high-income earners in blue states are the losers here, with middle-class taxpayers and small businesses largely on the winning end — is apparently a far more amusing use of time. Thus, moving forward, when Jerry Brown moans about the tax bill benefiting “the rich,” please loosely translate it as this: “Quick! We need a distraction! California has long been soaking its upper middle class. The GOP tax bill will make it crystal-clear that a significant chunk of this tax burden is coming from . . . from . . . US!” ...