Whenever a Democratic administration attempts to raise the tax rate on the ultra-wealthy among us in an attempt to get them to pay their fair share of the tax burden you will inevitably hear the cries of “redistribution of wealth,” followed by the ultimate buzz word, “socialism.”
Well, the recently-enacted Republican federal tax plan does exactly that, it redistributes wealth. HOWEVER, it does so in a new and innovative way by shifting financial resources from the highly-taxed, so-called “blue” states such as Maryland, New York, Connecticut, California, and New Jersey to the so-called “red” states such as Mississippi, Louisiana, and Alabama to name just a few.
An individual in Mississippi who ordinarily takes the standard deduction on his federal return will see that deduction rise from the first $12,000 to the first $24,000. Big windfall.
In Maryland, an individual who ordinarily itemizes (because in such a highly-taxed state, state and local taxes are a major item to deduct), those middle class deductions, according to the federal tax plan, are either no longer allowed or significantly capped. Disaster!