A Stitch in Haste

I've blogged repeatedly on the "death of fiscal federalism" (i.e., the notion that federal taxes should only pay for federal government functions) and the inequities of federal taxation of, versus subsidies to, various states. In one sense the phenomenon is one of "blue states" subsidizing "red states" (i.e., blue state residents tend to have higher incomes and therefore higher federal tax rates). But in another sense it's red states subsidizing blue states (since blue states tend to have higher state and local taxes and therefore their residents benefit disproportionately from the deductibility of those taxes). It's also the Politics of Pull (i.e., which politicians can generate the most pork). And of course everybody subsidizes Alaska.

Here's one small example: The Tax Foundation has an updated study on which states' residents pay the Alternative Minimum Tax (click image to enlarge):



New Yorkers (myself included) get disproportionately hit by the AMT. Which got me to thinking -- what are my loyal public servants in Washington doing about it?

So I jaunted on over to senior Senator Charles Schumer's (D) website to see how he's fighting the AMT:

I urge the President to work with Congress to reform and simplify the AMT. Frankly, dealing with it should be a higher priority than making all of the President's tax cuts permanent...

Not abolish it, but "reform and simplify" it. I guess Schumer's perfectly content with some New Yorkers paying the AMT, so long as they're not "his" New Yorkers. And of course, what's far more important to Schumer is increasing taxes on some New Yorkers by raising regular federal income rates (remember: going from a lower tax rate to a higher tax rate is a tax increase, regardless of what sophistry -- i.e., "making cuts permanent" -- you hide it behind).

How about the junior Senator, Hillary Clinton (D)? What does her website say about the AMT?

Your search returned no results.

Maybe if the AMT included gains on cattle futures she'd be more interested.