'Blue' states may lose in Bush tax plan

[CatWoman]

Washington --- President Bush's plan for "revenue-neutral" tax reform needs losers to balance its winners, and people who take the federal deduction for state and local taxes may be in administration planners' sights, news reports say.

That could leave the so-called blue states seeing red.

In the past election, the states that collect the most income tax were solidly "blue" supporters of Democratic challenger John Kerry.

Eight of the 10 states with the most revenue in 2000 voted for Kerry: California, New York, Pennsylvania, Massachusetts, Michigan, Illinois, New Jersey and Maryland. Only Ohio and North Carolina favored Bush.

The federal deduction for state and local income taxes "predominantly benefits the blue states," said William Gale, a tax policy expert at the Brookings Institution, a liberal-leaning research group. "There is definitely a political calculation to this."

But before conspiracy theorists get too carried away, political observers note that by eliminating deductions for state income taxes, Bush would be inflicting political pain on two of the nation's most prominent Republican governors, George Pataki of New York and Arnold Schwarzenegger of California.

http://www.ajc.com/today/content/epaper/editions/today/news_146a9c8e15507108003d.html

[durablend]

1. Boy THERE'S a big shock...

:eyes:

[regnaD kciN]

6. Talk about political calculation...

This is not just to "punish" the blue states. It's to give the citizens there such a de facto tax increase that they'll be suddenly receptive to Republican policies. Since they won't be able to eliminate the hike in their federal taxes, they will have no alternative but to demand steep cuts to state and local taxes instead -- thus starting the states on a "race to the bottom" mentality that will make voters prime targets for Republican "we're being taxed to deeeeeeeeaaaaaaaath" demagogues like Tim Eyman up here in Washington.

[Jawja]

47. Well, there are folks

in Red States who take the property tax deduction.

Won't it affect them as well?

[tk2kewl]

2. what a dick

first our money gets spent on shit like faith based initiatives and books that tell us the Grand Canyon was formed yesterday, then when we want to make up of for that crap by spending more of our money on common sense education for our own kids we can't deduct it.

I say its Tea-Party-Time!

:mad:

[radiofreesrini]

55. tea party indeed

time for a "mosh on washington"...

[Leilani]

3. And these are the states that support all the red states.

What an outrage!

[Cobalt Violet]

36. We have Taxation without representation.

[Lizzie Borden]

45. Yes we do.

[bluedeminredstate]

4. Stupid question:

What exactly is "revenue-neutral?" I have the basics, but I need a simple, dictionary-style explanation. Anyone want to help a poor values-challenged elite ignoramus?
:dunce:

[ozymandius]

7. "Revenue netral" is codespeak.

In many cases it is tantamount to "robbing Peter to pay Paul" - as the old adage goes.

Revenue neutral, in this case, means that the Bush administration has afforded the means with which to pay for this initiative inside the proposal itself. Revenue reductions will be offset by increases in other potential revenue sectors.

[tommie_kicks]

22. Paying Paul means...

that Paul (top 1-5% of the country)robs Peter (95-99% or the country)to pay for Bush's tax cuts to top elite/wealthiest in our country.

Removing tax breaks for state and federal taxes or removing deductions for property taxes is no biggie for the weathiest... as most of them have enough tax breaks to not pay much (if anything)anyway.

Kerry wanted to tax those over $200K to pay for Peter to get a tax break. Exact opposite of what Bush reportedly is wanting to do.

What's Bush got to lose now? NOTHING... He already duped those that voted for him and unless he changes the law (which he and Arnold are trying to do) he can't run again in 2008 anyway.

It's at least 95% of Americans that will be the losers and considering most of the so-called "Red" States were likely light blue or pink at best... it certainly affects alot more people than what this article is referring to as "blue" states. The article assumes that all states are mostly solid red or solid blue, but that is not the case at all.

[Chipper Chat]

10. It's akin to "Healty Forest Initiative"...

and other "Newspeak"

[0007]

31. Yes, in other words we're so

...... screwed

[genius]

5. Time to secede

[Cobalt Violet]

37. I think that idea will grow over the next few years.

I hope so.

[lexicon089]

54. Actually..this is one factor in the 1st (un)civil war

During the buildup to the civil war, besides the obvious factor of slavery, taxation was one of the things that had the southern states seeing 'red' so to speak.

The tarrif of "abominations" (as deemed by southern lawmakers) was just one of numerous barely-vieled attempts to bring the cotton industry to its knees, basically it caused all southern states to pay HUGE amounts of taxes to the federal government to be able to have cotton exports.. oddly enough it lowered taxes on exports of (northern)steel

Also there were several other things that drove the southern legislators crazy that had nothing to do with slavery and everything to do with taxes. But i'm not here for a history lesson.

All I can say is that taxation can be a driving force for succession, it was in the revolutionary war and it had I believe a huge influence on the civil war in the US.

[Fla Dem]

8. Will also hurt lower income-lower middle income taxpayers.

I now live in Florida where we do not have a state income tax, so it wouldn't impact me. But most of my life I lived in Massachusetts at one time known as Taxachusetts. Before I made enough income, or had enough deductibles to itemize, the state tax deduction was just about the only thing I could look forward to when I did my federal income tax.

So once again, after giving tax cuts to the top 2% of income earners, a big tax cut to corporations, the Bush administration is sticking it to the little people again.

[Boosterman]

11. Yeah but this is a chance for us

If Bush taxes all the lower-middle classes then we can hopefully swing a lot of rural/moderate votes our way. Hey I am an optimist :)

[Ian David]

16. How can we legaly secede?

Fuck the red states.

They can have their bible, I just want my Constitution.

www.fuckthesouth.com

[NMDemDist2]

18. FYI Massachusetts is 35th lowest state taxes in the country n/t

[Cobalt Violet]

35. Its between 5% and 6%

And we have a 5% sales taxes with food and clothing being exempt.

[NMDemDist2]

39. interesting article here with graph

http://money.cnn.com/pf/features/lists/taxesbystate2004/

[Deja Q]

9. This is unity? Bull shit. And when * talks of taxes, he's only hurting

the economy by plasying his partisan game.

Secede now, blue states.

[welshTerrier2]

12. housing prices, banks, schools and more ...

another effect of this will be to drive down housing prices ... if you view your mortgage and your real estate taxes less any applicable tax deductions as your "net monthly rent", many will no longer be able to afford to spend as much on housing ... essential, bush will be giving the blue states a rent increase ...

the effect of this will be to drive down housing prices in the blue states ... it will also cause an increase in foreclosures ...

increased foreclosures will hurt the banks but what will hurt them even more will be a decrease in the size of the average mortgage ...banks make money by lending money ... of course, it is also possible that if the real estate tax deduction were eliminated, home buyers would need to borrow more money to help defray the increase ... but others might not qualify for larger mortgages ...

other affected industries will include the building trades and real estate sales ...

many states are already facing severe budget problems ... the elimination of state and local tax deductions will kill them ...

if the federal deduction were eliminated for local taxes but not for state taxes, it could cause an interesting shift from using the local property tax to fund the school system ... perhaps schools would then be funded using a more equitable state-wide formula ... as things stand now, most wealthy communities have far better schools than poorer communities ...

[tommie_kicks]

23. or the States like Florida & Texas will start paying state income tax?

[Longgrain]

13. This burns me up...

The article reads...

"That could leave the so-called blue states seeing red."

Well I'm already seeing red!
:grr:
I'm from one of those eight states, and have two unemployed family members, credit card dept up to my ears, and have received no state income tax return for the last two years.

I'm sick of paying for the sins of Bushco. and the ignoramuses in the red states...

(not you red state DUers though, you guys are alright! :hi: )

[jdj]

14. Only OH and NC maybe DIDN'T favor Bush...

We'll never know.

[mulethree]

15. Don't forget the local (property, school) taxes

If your federal tax rate is 25% and you effectively save $1000 of a $4000 annual school tax, thats a $1000 federal subsidy to your local schools.

More since the lost $4000 deduction will push some people to a higher tax bracket.

I believe it's more federal $s for education than any direct $s like Department of Education budget.

[DaveofCali]

17. They have us in the Blue States as slaves....

[struggle4progress]

19. North Carolinians could scream about this Bush tax hike.

There's enough electoral votes here to matter.

[Sleepless In NY]

25. struggle4progress.... any chance Edwards can influence

the N.Carolina electors? They still have yet to cerify.

[struggle4progress]

41. NC has a "faithless elector" law which would fine electors who ...

... don't vote as advertised. I personally think it's unconstitutional, since it interferes with the real intent of having an electoral college -- but I really don't think any of our conservative NC electors would be likely to change.

Nor do I see how a populist Dem like Edwards, the target of Repub vitriole since he defeated Faircloth, would stand a chance of swaying Repub electors to vote against W. In the last few weeks, I have often found the possibility of "faithless electors" to be a pleasant and soothing thought, but I think the real effect, of asking Edwards to lobby for this, would simply be to convince him that I was dangerously unhinged.

[Sara Beverley]

20. It never seemed to bother Reagan supporters when his tax cuts cost

them deductions for state and Fed sales taxes, gasoline taxes, credit card interest rates, auto loan interest, and deductions for medical expenses by increasing the deduction threshold from 3% gross salary to 7%. These Republican supporters love to pay increased taxes under the guise of tax reductions. Remember, they support the elimination of inheritance taxes ("death taxes") even though ONLY inheriters of $1.5 million or more pay taxes.

Just remember, the very wealthiest people already have significant ways to avoid paying these taxes. In the end, only the working poor and middleclass will be paying these taxes. Since Reagan's first term in office, the average American worker has lost at least $3,000 per year in tax deductions as a result of so-called "tax cuts" largely supported and voted for by the Republicans. I bet the mortgage interest deduction will be next on the list.

[Sirveri]

48. If they killed the mortgage deduction, civil war.

Seriously, there would be a wave of defaults, everyone would be up in arms, I doubt it could ever pass muster and get into the house or the senate. The poliwogs would know how pissed their constituents would get and they would kill that bill.

[shuffnew]

49. Yes, and the elite builders might abend...

and maybe the Repukes wouldn't get support from the builders anymore and Bush's Clear Channel highway support signs from Charles Clayton Builders on I-4/Fairbanks in Orlando might disappear and maybe Perry Homes (Houston, Tx) would no longer give the Swift Boats vets millions each year, etc.

They would be idiots to try to remove mortgage interest or your home property tax federal tax deductions... but, then it certainly would not be the first time they have been idiots!

[democratreformed]

52. I was newly married, young, and stupid during the Reagan years.

I bought the "cutting taxes" line hook, line, and sinker until I actually DID my tax return. I was so pissed off to find out that all the deductions had been taken away. That's why I never trust the "cut taxes" line to this day. They never CUT taxes - they just rearrange them.

[Name removed]

21. Deleted message

Message removed by moderator. Click here to review the message board rules.

[progdonkey]

24. those "political observers" are idiots, then...

So a plan that would compromiise two moderate Republicans sitting atop solid blue states has absolutely no cynical political basis? Nothing would suit the extreme RWers more than to hobble the moderate members of their party: if Arnie and Pataki become politically compromised by this issue, then they will have to either run to the Democrats or run to the extreme right; either way the result is a Republican Party purged of moderation.

[Sleepless In NY]

26. progdonkey You are so right! Excellent post.

Sounds exactly like the conservative game plan. Neither Pataki nor Arnie would be where they are today in these states, unless for their moderate views. And moderates don't seem to be welcomed in this republican party. Look at how Arlen Spector (R Pa.) folded. There has been alot of talk, that Pataki won't be running again, that he might accept a position in the bush administration. And if Pataki runs against Elliot Spitzer, he is going to lose anyway. Arnie is another story. Remains to be seen where his loyalties lie.

Blue States have got to do something.

[murielm99]

27. If they remove deductions for local property taxes,

they will infuriate a lot of farmers and agribusiness people. Farmers pay huge property tax bills.

They are mostly repukes, and in red states.

They could anger a lot of farmers. Some of them could be convinced to turn Democrat.

Farmers understand their taxes, and tax law. They would understand what is happening more than many others.

[FLSurfer]

28. Why don't Blue states get rid of

their state income tax? Then force the Feds to give them more money,
making themselves more like the red states.
I am thankful I don't have to pay a state income tax in Florida, but never understood why other states do.

[NashVegas]

32. Let's See

I grew up in a blue state with income tax (NY) and currently live in a red state (TN) without.

NY used the monies gathered for a wealth of services (most necessary, some cultural) and depending on what county you lived in, reasonable sales taxes with exemptions for various essentials. Some blue states have even more reduced sales taxes.

TN has an across the board 9.x% sales tax on everything you can't eat, and on anything you can eat that has sugar in it. All other food has an 8.x% tax.

And this tax is on everything including services and medicine.

Some of our local libraries are closed on Fridays because of budget shortages.

As long as you have a state government that spends its money wisely (and I don't know that I'd say TN does, considering all the fraud involved in construction projects) and gives you a break on sales taxes, state income tax isn't necessarily a bad thing.

[FLSurfer]

33. that makes sense. State sales tax allows for more services.

I don't understand tax laws well, and its an honest question.
But, here in Florida, my libraries are open our sales tax is reasonable( 6% with exemption for all drugs and most food).

Do we have better management? Get more money from the feds?
Tourist dollars?

How do we do it?

[bklyncowgirl]

29. I'm seriously screwed.

We own a three bedroom ranch on a small lot in New Jersey. Our property taxes are 5 grand a year and rising--when we bought the house two years ago they were a little under 4000. My husband works in New York. I work in NJ. We get to deduct his contribution to the State of New York from our New Jersey taxes but since my salary is higher than his we still end up paying. When I do my taxes electronically the audit control always pipes up with a warning like--"Your deductions for state and local taxes far excede the national average." and then the comforting "If you live in a high tax state you may disregard this warning"

Hopefully the big contributers to the Republicans who live in the high tax states like New Jersey and New York will be kind enough to persuade them of their folly.

[NashVegas]

30. This Just AFTER Allowing Income-Tax Free State Folks to Deduct Sales Tax!

What a giveaway to the wealthier residents in the red states!

[Heidelbaugh]

34. Property taxes

I didn't read the full article (I didn't want to register). Are they really talking about property taxes? I would think that would be political suicide. There were a lot of Bush voters in the new neighborhood across the street from me, and their property taxes are 9,000.00 per yr on average ( I live in PA). A lot of people are buying houses they can barely afford because of low interest rates, this would financially be devastating. From what I read it sounding like they were talking about income taxes only. I can't tell you how bad it would be for me if they took away the deduction for property taxes.

[go west young man]

38. Hence my name...

I think we should all pack up from the South and head to New Mexico, Colorado and beyond. We would leave a big financial hole over here on the East Coast and then suceed from Jesus Land. Out there would be tons of new wealth what with all of us arriving. We would have better education, stem cell research, healthcare for all of us, basically be the America we've always strived for. Who's with me?!!!;)

[Carolab]

50. I AM!!!

I am ALL for seceding. If they want to kill the Federal government--then FINE! KILL it already. And stop TAXING ME!!! I'll be glad to pay state and local taxes instead for state and local services. My state reps are mostly Dems. We just need to get rid of our Repuke governor. And, IF WE GET RID OF THESE CORRUPT VOTING MACHINES, next election WE WILL do just that!

[ExclamationPoint]

56. THERE's THE PROBLEM!

We WOULD leave a financial hole in the East Coast and suceed from Jesus Land if we moved to the west. If we moved west are problems WOULD be solved. But the problem is that sometimes even progressives are too sentimental to move. Just thinking about leaving the East Coast makes me cry. We would have to change human nature to undertake such a change.

All problems seem to arise in the country when facts fight with human ideas and nature.

[moose65]

59. Astounded

I live in NC, which is one of the two red "donor" states... and I am just astounded to read about the property taxes in NJ and PA... I pay about $500 a year in property taxes here in NC. My county has one of the lowest tax rates in the state. BUT, if I lived in the Northeast, I'd be damn angry if Dumbya eliminated that deduction. Sheesh! I just can't imagine paying that much in property taxes.

Do you have county as well as municipal taxes? I know that in some of the northern states, there's no such thing as a "county" as far as tax purposes go. What about sales tax? Here in NC it's 7%, except on food, which is 2%. I am woefully ignorant of tax policies around the country!

[htuttle]

61. Sales tax here in blue Madison, WI is 5.5%

That includes a very small (less than 1%) city sales tax, I think. Statewide it's 5%. There is no county sales tax. No sales tax on most food, unless it's considered 'ready to eat' (like junk food or something hot from the deli).

That's one of the differences. In NC they are shifting the tax burden to the poor by financing the government with a higher sales tax (which is always regressive).

Property taxes are comparatively high here, but that's because we prefer to have good public schools. :shrug: It's worth the money.

[L84TEA]

40. This will hurt his wealthiest supporters in those states.

Because they reap the benefits from the income tax returns from the middle class. This is a bad idea.

[fortyfeetunder]

42. Tax diddling = US financial Armageddon

Reading this reminded me of the other DU string on a potential US financial "Armageddon". I can't see how this diddling with "revenue neutral" is going to benefit the country as a whole, particularly when we have yet to recover from the recession, burgeoning national debt, and a potential endless occupation in Iraq.

[For PaisAn]

43. What about having to claim state refund as income?

In NY we have to claim previous years state refund as income. Will they be doing away with that also? If not then this is really a double whammy.

[ktowntennesseedem]

44. It all looks so good on paper!

Poor pitiful George. Like so many of their plans, it works great when its all black-or-white, up-or-down, red-or-blue, good-or-bad, etc. Unfortunately, in the real world there are many different shades and colors, many viewpoints and opinions, and both pros and cons in every scenario. What is poor Georgie to do?

:nopity:

[Strawman]

46. Hold up, that's not a "double tax?"

Like that horrible "death tax" on millionaires that they're looking to permanently get rid of?

I suppose then they'll just make it seem like the state income taxes are the problem and try to push every state onto the sales tax alone. Then the overall tax burden will actually be regressive. Now it's pretty damn close to flat which is bad enough: 19 cents on the dollar for the rich and 18 cents for the rest of us. Unfuckingbelievable.

[FighttheFuture]

51. "Ownership" bullshit!

"But during his presidential campaign, he promised to use his second term to put an even greater emphasis on promoting an "ownership" agenda."

Where the dems, and so many others, keep missing the boat is the greatest "ownership" we have is in our government of, for and by the people. Such a wedge has been created within peoples' minds that they are not the government and are "owned" by it. Stupid!! America is one of the few countries (perhaps the only one) founded on the notion that the people own the government and not the other way around. In the Constitution is stated the right to overthrow tyrannical governments (including our own). We must take back the concept that true ownership is in participating and owning your government. Not some millionth piece of one of thousands of sociopathic corporations. You have less "ownership" over your life the BushCo/Republican way than you ever had in our democracy and your single vote.


"To spur Americans to own shares of companies, Bush wants to further reduce taxes on dividends, interest and capital gains. He argues that by reducing taxes on investments, the government could help Americans become more financially secure while creating new pools of capital to fund economic expansion and job creation. "


yada, yada, yada. I've still never been able to really grasp why so many feel that passive investments should be given a free ride on the back of than labor. Yeah, spur investment, etc. (there is the historical reasons of have vs. have-nots, which is not lost on me). What many don't get is even with the same, or higher tax on investments (passive income), there would still be investment (in fact there is a tremendous amount of capital in this world with no place to invest). Any return is better than no return, and the investments would be better researched, to boot! Enron and other scandals would be less likely because of even greater oversight demanded by lower returns because of taxes! (that's how it used to work). Many who labor have no disposable income to "invest", and that is a trend that is on the upswing, under BushCo. Why are those who are most hurt by this, labor, the majority, too stupid to see it? Greed? Bad education? Trusting lemmings? What?

[lexicon089]

53. Well no shit shirlock

What did you expect.

[bones_7672]

57. Am I supposed to feel good about living in a RED state? n/t

[IndianaGreen]

58. I dunno, I live in a red state

and I see nothing good happening in the next four years.

[indepat]

60. You're either with us or again' us

[genieroze]

62. Are you suprised?

[greenohio]

63. Ohio would get pounded by this.

We'd turn blue for sure if he makes this mistake.

[alexisfree]

64. straigth out with it..