@CTL
“residents of your state can’t pay higher Federal Taxes than residents of my state. The Federal tax rates are uniform across the country.”
You’re smarter than you pretend to be with this argument. Obviously, Federal tax rates are nominally uniform across the country. However, people who pay SALT and deduct accordingly from their Federal taxes, practically speaking, pay a lower rate than similar taxpayers in other states. This is a Federal subsidy to your state, paid for (in part) by mine.
“Loads of residents of my state don’t itemize or aren’t affected by the 10K cap on state tax deductions.”
Your initial complaint belies this argument.
The people who pay most of the taxes most likely do itemize, and presumably more people itemized when there was no cap on the SALT deduction.
Here’s the bottom line: With no cap on the SALT deduction, people who pay SALT don’t really pay SALT, they simply shift money from the Federal government to their state. With a cap, this is still true, albeit to a lesser degree. This means that of two people in identical financial positions, the one in Texas pays a higher amount in taxes to the Federal government than does the one in California. This may not show in an analysis of “tax dollars sent to Washington” versus “money received back,” but it is effectively a Federal subsidy to California, paid for by the people of Texas.
If California wants to offer high pensions to its employees and expensive services to its residents, that’s fine with me. The people of California can do whatever they want. The people in my state have chosen not to pay for these things, which is our prerogative. If we don’t pay to have these things here, why should we pay to have them in California?