What does a TRUMP presidency look like?

[Admiral Yi]

Now you are implicitly conceding that deductability *does* in fact subsidize local spending, but advancing a new argument that the subsidy is in fact worthwhile, because of the additional income, and hence the higher federal tax revenues, it generates. 

I'm not making the concession, just responding to the assumption in the prior post.  The SALT deduction is one of the few constants of the federal tax regime - it was even there in the tax struck down in Pollock before the adoption of the 16th amendment.  The principle is basic - the federal government shouldn't be able to tax monies already appropriated by the state government in tax.  It's not a credit for tax paid, it's simply an exclusion from income taxation of that already taxed by a co-sovereign.  It's not a subsidy to the state for the feds to refrain from taxing money the state collects in taxation, its just the basic operation of federalism. 

I like this argument better, but I still see some problems, specifically in determining causality.  A large part of urban spending goes to crime prevention and social programs.  These don't generate higher incomes, they mitigate the consequences that come with population density.  Not all urban centers are productive either.  Take a look at any rust belt shithole.  It would be very hard to ascribe the success of NY finance to the NY state education system, or the success of Silicon Valley to Berkeley or Cal State Fullerton.

It's an economic question, so one can argue about causality until the end of time without coming to any definitive answer.  High tax relative tax levels are certainly no guarantee of economic success.  Weak state taxation OTOH is often correlated with poor economic outcomes and there is quite a bit of developmental and growth literature on this.

As to the specific examples, the strength of the NYC area in financial services and media is almost certainly connected to the density and amenities of the commercial district and the surrounding residential areas, which entails high infrastructure cost.  In California, the public university system generates 2/3 of the STEM graduates in the state (half UCal half CSU), I am reasonably confident this contributes to the strength of the tech industry in the state.

You're surprisingly resistant to the word subsidy.  Would it help if we changed the terminology, to something like "financial incentive" or "monetary encouragement?"

The constitutional issue you raise is totally orthogonal (the best word ever) to the question of financial incentive.  Legal permissability or impermissability doesn't affect whether the law in question acts as a monetary encouragement for certain behavior, or whether that behavior is desirable from the POV of the granter of that encouragement.

As to the value of the monetary encouragement, one thing missing so far is mention of the sign and the magnitude of the benefit.  Does one dollar of tax foregone because of the SALT deduction generate more than one dollar of federal tax revenue because of increased income?

[Oexmelin]

Trump of a thousand pages.

[sbr]

Forget all the economic and legal mumbo jumbo, why should my money be taxed twice?

[Jacob]

Forget all the economic and legal mumbo jumbo, why should my money be taxed twice?

Because "haha look at the big city liberals cry".

[Admiral Yi]

Forget all the economic and legal mumbo jumbo, why should my money be taxed twice?

Because "haha look at the big city liberals cry".

Before responding you probably should have taken into consideration the fact that double (or triple or quadruple) taxation also includes things like personal taxation of dividend income and capital gains, inheritance taxes, sales taxes, etc.

[Eddie Teach]

Progressives shucking principles for tribalism is proof that Trump has won. 

[garbon]

Progressives shucking principles for tribalism is proof that Trump has won. 

I've no idea what you are talking about.

[Eddie Teach]

Well, Jacob's description of taxes as sticking it to "big city liberals" for one.

[Barrister]

Forget all the economic and legal mumbo jumbo, why should my money be taxed twice?

Because "haha look at the big city liberals cry".

Jacob you're aware we don't have any provincial tax deduction in Canada, right?  Our income gets "taxed" twice, by both the Feds and the province.

While theoretically we could deduct based on provincial taxes, you'd just have to raise base rates to compensate so I'm not sure what that would accomplish.  Although we don't have the same level of disparity in provincial income tax rates

[Jacob]

Well, Jacob's description of taxes as sticking it to "big city liberals" for one.

I think that's the motivation for the proposed changes. Do you disagree?

[Jacob]

Jacob you're aware we don't have any provincial tax deduction in Canada, right?  Our income gets "taxed" twice, by both the Feds and the province.

While theoretically we could deduct based on provincial taxes, you'd just have to raise base rates to compensate so I'm not sure what that would accomplish.  Although we don't have the same level of disparity in provincial income tax rates

That's not really relevant though.

[Eddie Teach]

Well, Jacob's description of taxes as sticking it to "big city liberals" for one.

I think that's the motivation for the proposed changes. Do you disagree?

I think it's to keep as much revenue as they can while still being able to call the bill a tax cut.

But motivation aside, I think that one particular change is a good thing. A bit hypocritical to say one's for high taxes, but only if they're funding his children's school and parks he can walk to.

[Admiral Yi]

I think that's the motivation for the proposed changes. Do you disagree?

That's not what sbr asked.

[Jacob]

That's not what sbr asked.

Totally was.

But, you know, feel free to answer the question you think sbr was asking.

[Jacob]

I think it's to keep as much revenue as they can while still being able to call the bill a tax cut.

But motivation aside, I think that one particular change is a good thing. A bit hypocritical to say one's for high taxes, but only if they're funding his children's school and parks he can walk to.

Not as hypocritical as it is to claim to be for low taxes and then raising taxes on people.