taking tax breaks with a grain of SALT
concert with blue states enjoying large deductions. Such a change in the tax code wouldn’t be “fair.”
THE FREE MARKET VERSUS POLITICALWASTE
What will limit city and state spending is the basic truth that market-driven wealth allocation always and everywhere trumps politicized allocation. SALT’s revival. For one, conservatives should be much more confident about their economic view of the way the world works. Government spending, whether by city, state, or national governments, is economically harmful. What will limit city and state spending is the basic truth that market-driven wealth allocation always and everywhere trumps politicized allocation. To which critics will ask an obvious question: If state and local taxes are once again fully deductible against the federal tax bill, what’s to keep states from taxing and spending with abandon as a way of shielding their citizens from federal taxes? The question is a good one, but one that unwittingly supports Still not convinced? Ironically, what has you skeptical should have you supporting SALT revival. Think about what happens if cities and states choose excessive spending to massively shrink the federal tax bill of their citizens. The local waste will limit the flow of dollars to the U.S. Treasury, which means that the economic damage will be more limited (think local) in scope... which is kind of the point. The 10th Amendment in the
That’s one way of looking at it, but it’s much less fair that so many of the blue-state rich folks endure so much federal taxation simply because they’re rich. Indeed, while the top 1% account for roughly 40% of total federal tax revenue, Loyola University economics professor Walter Block calculates that the top one tenth of 1% of Americans account for 19.5% of total federal revenues. Talk about unfair! And that’s only part of the story. Too often those red states which are worried about “a big fat tax break for the rich” miss the fact that federal taxes paid by the rich are very much a tax on all of us. Lest readers forget, every dollar that the U.S. Treasury collects in taxes is an extra dollar of control that Pelosi, Kevin McCarthy, Chuck Schumer, Mitch McConnell, and President Biden have over the economy. Government spending is a tax. And contrary to Keynesian economic theory that says spending is an economic stimulant, logic indicates the exact opposite. Politicized allocation of wealth, which is all government spending is, is by its very name an economic somnolent. Looked at from this angle, Americans should cheer any scenario that reduces the flow of dollars to Washington. A revival of SALT would obviously shrink the flow. Simplified, a tax on Mark Zuckerberg is a tax on you, me, and the fellow behind the tree.
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August 2021
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