Trump’s tax cuts are punishing states that voted for Clinton, data suggest

“Loyalty is very important to me,” President Donald Trump once said.

And if people are disloyal, “I always find a way to get even.”

A MarketWatch analysis shows that the states that voted for Trump in the 2016 election will get the majority of his tax cuts — even though they only pay a minority of all federal taxes.

That’s according to data from the Internal Revenue Service, and an independent study of the tax reforms. The net benefit for the states that supported the president are likely to come to $35 billion in this tax year alone, analysis shows.

Using data from the IRS and the U.S. Census Bureau, people in ‘Trump’ states pay an average of $7,800 in federal taxes per person versus $11,070 per person in states that voted for Hillary Clinton.

It’s “an economic civil war,” said New York governor Andrew Cuomo at a press conference recently. The tax giveaway “literally restructured the economy to help red states at the cost of blue states.” He called it “a diabolical, political maneuver.” The tax cuts “financed the Republican state-tax cut from the Democratic states,” he said, adding, “I mean, if people actually understood what it was that they were doing there would have bene an uprising.”

“It is not a New York-only phenomenon,” Cuomo told a news conference last month. The new tax structure “encourages high-income New Yorkers to move to other states.”

MarketWatch looked at the calculations conducted by the Institute for Taxation and Economic Policy, an independent Washington, D.C. think-tank. Bottom line: States that voted for Trump will get 56% of the tax cuts, or an extra $35 billion.

Yet according to the Internal Revenue Service’s most recent data, those states were only paying 48% of federal taxes.

The difference per person is not trivial. Using data from the IRS and the U.S. Census Bureau, people in the “Trump” states pay an average of $7,800 in net federal taxes per person.

People in the states that voted for Hillary Clinton? $11,070 per person.

New York Democratic Congresswoman Alexandria Ocasio-Cortez was even dragged into the debate recently following news that her mother had moved to Florida, and told a reporter it was partly to save on taxes.

And that was before the latest tax cut, which will widen the gap

The tax reform law is already being cited as a reason that people are allegedly leaving the high-cost, “high-tax” Democratic states of the northeast and the west coast for the cheaper, “low-tax” Republican states of the south and west.

New York’s new Democratic Congresswoman Alexandria Ocasio-Cortez was even dragged into the debate recently following news that her mother had moved to Florida, and told a reporter it was partly to save on taxes.

And United Van Lines caused a stir earlier this year when it noted big outflows in 2018 from New York and a few other northeastern states. However, the company’s overall picture was more mixed than the headlines suggested. It also reported outflows from conservative Kansas, Montana and Iowa, and inflows into liberal Vermont, Oregon and Washington State.

The taxes paid by “red” and “blue” states may add slightly to the economic appeal of moving south and west. The bigger economic appeal lies in lower costs, particularly land.

According to Payscale.com, it costs less than half as much to live in Austin, Texas as it does in New York. And, as reported here, you can now buy an entire town in Georgia for the price of a condo in San Francisco.

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