Under our current tax structure, people working in states with state income taxes can deduct those state taxes from their federal taxes they owe. They pay LESS to the federal treasury than those who live in states with low or no state income tax. The higher the state income tax, the more they deduct from their federal taxes.
A worker living in Texas, Washington, or Nevada, with zero state income tax earning the same wages as those in New York, California or Illinois with high state income taxes end up paying a bigger federal government tax burden.
Why do workers in states that blow up their budgets every year with lavish entitlements and welfare programs get to pay less in federal taxes just because their governors and state legislators do not control their spending? California chooses to spend on underfunded lavish pensions, sanctuary city costs to provide food and shelter and education and healthcare for illegals, etc. As the result, California has one of the highest state income tax rates in the country, and then all of the rest of us outside of California get to pay the shortfall that California workers write off of their federal income tax returns. And they do not even say “thank you”. They keep voting in big-spending legislators and governors, so they should pay for what they spend on state services. Socialism is not cheap.
As long as the federal tax code allows state income taxes paid to be written off of federal tax returns, their is little to no incentive to control state spending. Once workers in New York and California feel the full negative impact on their paychecks due to their state’s spending, perhaps they will make better political choices for their State governments.