The present federal tax code allows deductions for state income taxes. This is as it should be. Why? Because we should not have to pay taxes on what the locusts consume before we harvest the crop.
This should be obvious. Let’s consider the doctrine of the tithe. A farmer should pay a tithe on that portion of the crop that he harvests, not counting the replacement seeds saved from the previous year. He pays on his net return. If he benefits from a harvest, he pays the tithe. What about that portion of the crop that is eaten by locusts or other critters before he harvests it? He owes God no tithe. For the exegesis on this, see Chapter 37 of my economic commentary on Leviticus. Download it here.
We should extend this principle of justice to all federal incomes taxes, including Social Security and Medicare taxes. No one should owe anything to the federal government that state governments have already confiscated.
This should be obvious. It is not obvious to Donald Trump’s tax code authors.
It is also not obvious to the Heritage Foundation, known as a conservative “think tank.” For its defense of a federal tax reform that would remove the deduction for state income taxes, click here.
How much money is at stake? The Feds will collect an extra $63 billion a year. That will come out of taxpayers’ wallets.
If this bill passes both houses of Congress and is signed into law, the law will be discriminatory against residents of states other than these, which have no income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee (salaries), Texas, Washington, and Wyoming . . . plus Texarkana, Arkansas. There, the locusts are forced to find other ways to eat the crops besides taking their cut off the top before the farmers harvest them.
There is resistance in Congress to this proposal. I hope the challenge forces Republicans to remove this provision from the bill. The federal locusts get too much of our crop already. To force us to pay income taxes on what state locusts have already consumed adds insult to injury, plus adds more injury.
Let’s hope this turkey does not make it to Thanksgiving. It needs to be roasted, carved up, and glazed with sugar for Halloween treats. It’s either that or Trump’s trick.