U.S. House Speaker Paul Ryan (R, Opportunism) has announced the G.O.P. tax bill is “great” because it gets the federal government out of the business of subsidizing high tax states. Ryan said the rest of the country is “propping up profligate, big-government states.” He said, “States that got their act together are paying for states that didn’t.”
U.S. Treasury Scretary Steve Mnuchin made a similar claim: “We are getting the federal government out of the business of subsidizing states. That is going to impact high-tax states.”
Piffle. That’s a damned lie.1
Ryan and Mnuchin are attempting to justify the G.O.P. ending the tax deductions for state and municipal sales and income tax. Their claimed justification is that the states with the highest local taxes enjoy a big subsidy under current tax law.
The premise is false. States with higher local taxes pay more to the federal government per capita than they get.
Connecticut residents paid an average of $15,643 per person in federal taxes in 2015, according to a report by the Rockefeller Institute of Government. Massachusetts paid $13,582 per person, New Jersey paid $13,137 and New York paid $12,820. California residents paid an average of $10,510.
At the other end, Mississippi residents paid an average of $5,740 per person, while West Virginia paid $6,349, Kentucky paid $6,626 and South Carolina paid $6,665.
Connecticut, Massachusetts, New Jersey, New York and California are generally states that vote Democrat. Mississippi, West Virginia, Kentucky and South Carolina generally vote Republican.
Low-tax red states also fare better when you take into account federal spending.
It’s pretty much the same for pork. Mississippi received $2.13 for every tax dollar the state sent to Washington in 2015, according to the Rockefeller study. West Virginia received $2.07, Kentucky got $1.90 and South Carolina got $1.71.
Meanwhile, New Jersey received 74 cents in federal spending for tax every dollar the state sent to Washington. New York received 81 cents, Connecticut received 82 cents and Massachusetts received 83 cents.
Ryan and Mnuchin are simply lying.
It’s ll about punishing the states that have the temerity, the gall, to vote for someone other than Republicans. It’s about revenge.
Remember, understanding “tax reform” means tracing who’s special interests are being served. It’s not about fairness. It’s about who got – or bought – the politicians’ interests.
Dermot Cole offers a host of additional reasons to be deeply suspicious of the bum’s rush the G.O.P. is taking to enacting this pork package. It’s too much to expect the Alaska delegation to be honest or fair. But contact their offices and tell them you’re not falling for it.
- Mark Twain, “There are three kinds of lies: lies, damned lies and statistics.” ↩