It’s Time To Stick It To the Blue States

After years of campaigning for higher taxes, it is beginning to dawn on liberal residents of blue states that the effects, for them, will not be pretty. Most of the nation’s “rich”–those earning over $250,000 a year, or, depending on President Obama’s mood, $175,000–live in the blue states. Moreover, the deductions that are likely slated for reduction or elimination, including state taxes and home mortgages, mostly benefit blue state residents. So the New York Times, a prime agitator for higher taxes, appears to be having second thoughts:

As they continue to wrangle over the year-end fiscal deadline, both Democrats and Republicans are considering caps on federal income-tax deductions.

That could be very bad news for residents of New York, New Jersey and other states and cities that rely heavily on their own income taxes. Such a cap would reduce the value of the deduction for state and local income taxes, which has been part of the federal tax code for a century (though the deduction has been diluted by the alternative minimum tax). That could substantially reduce middle-class disposable incomes in high-tax states, which, in turn, would put pressure on those states to cut taxes and the services they have long chosen to provide.

The Times doesn’t disguise the ideological basis for its sudden enthusiasm for tax preferences:

Over time, the deduction has become the equivalent of a subsidy from the federal government to states that believe in a strong and active government. That may infuriate conservatives in low-tax states like Texas, who hate subsidizing states with different views of government’s role, but it’s actually a good thing for the country.

Sure it is. But, hey, if you’re going to raise taxes on “the rich,” something’s gotta give. A lot of conservatives are now saying, let the stuck pig squeal, and let’s stick it to blue state liberals, good and hard. Who knows, maybe before long the Times will figure out that the “rich” disproportionately constitute its readers. Raising their taxes will reduce the discretionary income they have to spend on items like newspapers. It’s just another illustration of the adage that every cloud has a silver lining.

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