DTGT
Ramblin' Wreck
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- 530
Your taxes get increased by the amount of lost tax revenue. Your taxes are higher than they would be if the deduction did not exist.
Anybody listening to Richt Show?
- Thread starter bartoma
- Start date
AE 87
Helluva Engineer
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- 13,016
I know you have that you have put me on ignore, but I'm pretty sure that this is statement in bold is simply not demonstrably true. Near as I can tell, it seems to assume that State expenditures are fixed so that revenue lost by deductions must be made-up thru higher taxes elsewhere.
However, two factors undermine this assumption. 1) The State Legislature passes a budget each year, theoretically based on expected income including the exemptions. So, a State could decide to lower expenditures rather than raise taxes, if it were necessary to compensate for deductions. So it does not follow that taxes are necessarily higher than they would be without deductions. 2) It seems to me that states grant most tax deductions for a perceived benefit to society or community life, benefits which lead to ultimate, if difficult to quantify, savings and revenues for the State.