Blue states are donor states

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I usually focus on property taxes, but this week I want to write about income taxes. I am a Democrat and I believe in a progressive income tax, but I do not think New York Democrats should support any increase in federal or state income taxes unless some serious changes are made.

New Yorkers are net “donors” of billions of dollars to the federal government and Nassau County residents are net donors to both the state government and the federal government. By donors I mean we send billions of dollars to our federal and state governments that don’t come back. In fact, most Blue (Democratic) states are net donors to Red (Republican) states. (Texas is an exception – it is also a donor.) Nassau, Suffolk and New York City are donors, while upstate New York and the Midwest, Southwest and Southeast states are “takers.” Why?

When federal programs under FDR’s New Deal and Lyndon Johnson’s Great Society were created, federal officials believed, rightly, it was incumbent upon advanced industrial states like those in the Northeast, the now Rust Belt, and the west coast (now blue states), to help those poorer, less advanced states to catch up with us in programs related to education, healthcare, civil rights and social services. Today, however, we are subsidizing those states with our federal tax dollars, while our residents are crushed by property taxes and decaying infrastructure (a major exception is the federal money now coming home to respond to Superstorm Sandy).

People are leaving our state and moving to the states we are sending our federal dollars to assist. We are subsidizing our competitors. While our “rich” people are paying high income taxes, that money is not coming back to help the hardworking middle class and lower income families that are living in our midst and are getting crushed by high property taxes. We shouldn’t support higher income taxes unless all of that new income tax revenue, or at least a large portion of it, comes back to our local governments — and consequently our residents — in the form of revenue sharing and, thereby, property tax relief.

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