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".... by eliminating the state and local tax deduction (SALT) in the new federal tax bill, the Republican Congress and Donald Trump may be giving all of those states every incentive to legalize recreational marijuana."
Ironically, in getting revenge on blue states by eliminating the state and local tax deduction (SALT) in the new federal tax bill, the Republican Congress and Donald Trump may be giving all of those states every incentive to legalize recreational marijuana today – and eventually legalize other drugs too.
Take New Jersey and New York. Both are very high tax states where eliminating the SALT deduction will hit residents and local governments especially hard. Now that New Yorkers and New Jerseyites are going to see their federal taxes rise by as much as 7 to 8 percent, they're going to have to find savings somewhere.
The state next door sees its residents cross the border to gamble and they inevitably say to themselves, "Why are we losing all of this revenue to Indiana/ New Jersey/ Arizona?" Then they authorize their own casinos to try to recapture the revenue (and it's far easier to justify the decision when the state next door is already doing it). The elimination of SALT is going to do the same thing for recreational drugs. Phil Murphy, New Jersey's governor-elect, has already pledged to pass legalization of recreational marijuana. Most New Jersey insiders think the legislature will go along. Once cannabis becomes legal in New Jersey and available for purchase to anyone over the age of 18, New Yorkers are going to start flooding into dispensaries in Hoboken and Jersey City to buy weed without having to take any risk.
Cities and states will need new money to satisfy one group of powerful constituencies (big campaign donors like public labor unions, progressive policy groups, hospitals, nursing homes, etc…) but they'll also need to avoid raising taxes to avoid angering another power constituency (the voters).
Commentary by Bradley Tusk, a political strategist and venture capitalist who leads political advisory firm Tusk Strategies.
originally posted by: LogicalGraphitti
I must be missing the point. If the new fed tax law prohibits me from deducting state tax, how does that hurt the state? It's me that loses and legalizing pot won't help me.
originally posted by: Regnor
a reply to: visitedbythem
Were you smoking at the time?