Tax reform will reshape life in blue states with high taxes: Varney

FBN's Stuart Varney says will support the Republican tax bill even though it will hurt high-income earners.

The New York Times has a headline this morning, which I agree with: "GOP tax plan could reshape life in the U.S."

Now The Times takes issue with many aspects of the tax plan. Frankly, they don't like any of it.

But the item that will reshape our lives is ending the deduction for state and local taxes—this terrifies The Times because in the big Democrat states, where taxes are very high, local politicians and Democrats all will have a very hard time raising taxes in the future. And they really want to raise taxes! New York, New Jersey, California and especially Illinois, are all struggling to pay pensions to retired government workers. Struggling? No, they are desperate.

But if the tax deal goes through, middle and upper-income people in those states will be paying more to the federal Treasury. There's no way they will accept higher taxes at the local level as well.

And of course, history tells us that when squeezed, rich people move, further depriving blue states of the money they desperately need.

That means “watch out,” because those pensions can't be paid without further cuts to services like education and health. That’s why The Times says the tax plan will reshape life in the U.S.—Correction, it will reshape life in blue states with high taxes. It is actually a bonanza, a huge plus for Texas and Florida and Nevada and any other state with low taxes. They will gain people and money.

Let’s be clear—I and many of my colleagues will take a hit. You make good money in a high-tax state and President Trump's tax plan will hurt you financially, even though you thought tax reform would put more money in your pocket.

But I still support it. I want to see America return to growth and prosperity. I want to introduce youngsters to a dynamic economy. They don't know what it means or how it feels.

That’s what scares The Times.