Dilbert_X wrote:I assumed that if a state had high taxes and those taxes are deductible from Federal taxes then people in those states would pay less Federal tax.
I have no idea why anyone would think that tax brackets should be based on the local cost of living, that would be impossible to calculate for one thing. As far as I know nowhere in the world does that. If you don't like it feel free to move somewhere with a lower cost of living.
High living costs generally equate to high income and high standard of living. Boo hoo.
This is one of those Libertarian pipe-dreams which isn't going to happen, except anything could happen under Trump so watch this space I guess.
It's got nothing to do with libertarianism. There are places in this country where land and cost of living is dirt cheap. Home prices are lower, taxes are lower, and people make less money, but you need less to get by. So, someone making half of what I make can have the same quality of life but end up paying much less in taxes because of the progressive tax bracket system. Seems fair
The point of the progressive tax system is to start taxing people's disposable income at increasingly higher rates because the theory is that the money is less needed once basic necessities like housing and food are covered, yes? Doesn't work when there is such a huge disparity in cost of living.
And yes, the cost of living is already calculated in the US down to the county level. It's how the military calculates its supplementary subsistence payments, for one, and I think social security is adjusted too.