Speaker’s ‘new’ math
The usually well-informed speaker of the U.S. House — at least when it comes to tax issues — just picked a fight he didn’t need and can’t win, because for once the facts are not on his side.
Paul Ryan, who desperately needs a win on a proposed sweeping tax cut and reform bill, didn’t endear himself this past week to those of us who live in high-tax states.
Ryan insisted in a speech to the conservative Heritage Foundation that the rest of the country is “propping up profligate, big-government states” that levy high taxes on their residents and spend recklessly.
“States that got their act together are paying for states that didn’t,” the Wisconsin Republican said. Well, just a darned minute. The state-local tax deduction allowed on federal tax returns has become one of the most contentious issues in the widerranging tax debate. Not surprising, it’s used by 44 million people and amounts to a revenue loss to the government of about $1.3 trillion over 10 years. Opposition to ending the deduction (a move that appeared to punish blue states) has united a boatload of lawmakers from both parties in those states, state and local officials and business groups.
But far from being “profligate,” the very states targeted by some in the GOP — places like New York, New Jersey, California and, yes, Massachusetts — are the states that send billions of dollars more to the federal government than they get back from the federal government.
A study by the Rockefeller Institute of Government, based on the budget year ending Sept. 30, 2015, found that New York contributed $48 billion more to Washington than it got in return; New Jersey, $31 billion; California, $17 billion and Massachusetts nearly $16 billion. That means Massachusetts gets only 83 cents back for every dollar its taxpayers send to the feds.
As the Rockefeller Institute report concluded, “Understanding how the federal budget currently is distributed across the nation is a crucial first step in understanding whether proposed federal changes are fair and appropriate.”
It’s a little something the speaker might ponder before he risks alienating votes he needs to court in places that have the most to lose.