Blue state tax shock syndrome

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Many taxpayers, almost exclusively in blue states, are getting shocked by their tax bills this year and, of course, they’re blaming President Trump and his tax reform.

But they are far off the mark. Trump’s tax bill was rooted firmly in the social justice progressive principle of fairness — the same principle widely promoted by all of the Democratic candidates for president. The social justice logic is that it is unfair for taxpayers throughout the country to subsidize the big-spending, progressive notions of the blue states. The rest of the country did not elect the state and local officials who created these programs and then raised state and local income taxes, property taxes and sales taxes, or sneaked them in through tax-supported bond issues.  

{mosads}Trump is simply saying that, if blue-state taxpayers elect these officials and want these programs, they can pay for them without the rest of the country subsidizing them through a federal tax deduction for state taxes.

And, to be clear, there is no class warfare here. The only taxpayers who are really affected are the upper middle class and rich blue state voters who itemize their deductions.

Nine out of the 10 highest income tax states in the country are blue states. California’s state income tax, for example, is 13.5 percent. Oregon weighs in at 9.9 percent. New York’s combined state and local income taxes put it right up there. California and many other blue states also add in high property and sales taxes.

Rather than criticize Trump, blue-state voters should look in the mirror and ask, “What are we getting for these huge state and local taxes?”

California a great place to start. California used to have one of the best public school systems in America — now it’s one of the worst.

California decided to spend nearly $100 billion on a high-speed train, that no one would ride, to literally nowhere. Having wasted billions, this shocking window into the Green New Deal was finally canceled.

In 2014, California’s political leaders anguished over the “100-year drought” and pressured Californians into voting for Prop 1, an $8 billion program to build water conservation projects. But, by 2018, virtually none of the money was spent. Why? Because many leaders in Sacramento had no interest in water conservation. In 2014, during the peak of the “drought,” the state was pouring hundreds of billions of gallons of fresh water into San Francisco Bay, rather than giving it to its parched citizens. Huh? Since 2014, nearly 2 trillion gallons of fresh water have been wasted. Why? Because California “conservationists” wanted to protect the delta smelt fish, which, according to some recent fish studies, may not even be around any longer.

California voters apparently will swallow any story and subsequently have agreed to over $10 billion more in water “conservation” projects that may never happen and are not needed — this year, California is looking at record rainfall, record snowpack, and record water. There was no “100-year drought.” But, water is reliable power politics in California and taxpayers don’t seem to care if they’re getting hosed.

“Conservationists” in Sacramento have argued against effective forest management programs meant to curb the massive, quick-spreading California wildfires that have led to huge damage in the past several years and pleas for federal disaster relief.

The biggest budget item in California is public welfare (California has 12 percent of America’s population and over 30 percent of its welfare recipients), and that number will grow sharply as California provides free public services for millions of new undocumented immigrants crossing the border and entering sanctuary cities.

And, in the last election, Californians elected a governor who proposed state single-payer health care, which many estimate may double California taxes.

No wonder companies and middle-class taxpayers are fleeing California in record numbers, reducing the tax base and increasing the tax burden on remaining individuals.

Why would California taxpayers expect the rest of the country to bail them out if they support this kind of stuff?

New York is no better — virtually a carbon copy. As a recent example, New York drove away Amazon, a headquarters deal that would have created tens of thousands of jobs and broadened the tax base. New Yorkers can thank their “leaders” for higher unemployment and higher taxes.

These blue-state dystopian nightmares go on and on. Clearly, California, New York and other progressive blue states are free to elect whomever they like and to allow their leaders to enact whatever programs they want. The Trump tax program, however, makes clear that the rest of the country no longer is willing to subsidize such chaos. Blue-state voters need to straighten out their own state and local governments.

The irony, of course, is that blue-state taxpayers think of themselves as the elite, the best, the brightest. That makes it even more entertaining to the rest of America as political Darwinism takes hold and blue states commit fiscal suicide as their tax bills come due.

Grady Means is a writer and former corporate strategy consultant. He served in the White House as a policy assistant to Vice President Nelson Rockefeller and as a staff economist for Secretary Elliott Richardson of the U.S. Department of Health, Education and Welfare. Follow him on Twitter @GradyMeans.

Tags California Donald Trump Income tax New York Progressive politics Property taxes Tax Cuts and Jobs Act

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