Red vs. Blue: Who subsidizes who?
It's an old debate over whether red states or blue states pay in more than their fair share of taxes verses what they get back. I've had the same discussion enough times that I want to preserve my usual arguments here for quick reference. SALT (state and local tax) deductions are a de facto subsidy paid by low-tax red states to high-tax blue states to make the high state rates feel about one-third lower. Essentially, money that would have gone to the feds from a blue state gets shifted directly to that state rather than make the round-trip. But that doesn't get counted in the transfer. One counterargument to this is that a state that taxes its people more to pay for its own programs is taking care of its own and doesn't need to ask for money from the government. But that sidesteps the fact that, to do it that way, someone else needs to pick up the slack. In effect, Texans pay more in federal taxes so Californians can pay less of what ultimately ends up in West Virgi...