Budget Deficit? Let Blue-Staters Pay!

Republicans have come up with the ideal way to keep taxes low in the red states, but still close the budget deficit: make the blue states pay! What was that about no taxation without representation?:

On the one hand, gutting the mortgage-interest deduction seems progressive, because the deduction now favors the well-off: The mortgage deduction gets more generous the more expensive the home you buy, and the more income you have. And property taxes are generally a function of home size and value. On the other hand, regional variations in home prices and state and local taxes would heavily skew the burden of these tax changes onto blue-staters. Who has the most to lose if the mortgage deduction is capped at $313,000, and if you can no longer deduct local taxes from your taxable federal income? People who live in places where (a) real estate is expensive; (b) states and/or cities tax income; and (c) property taxes are high, to support local schools and services. In other words, people who live in California, Seattle, the entire Atlantic seaboard from Maryland up to Maine, and well-off suburbs of Chicago. If you live in a $300,000 McMansion in a state with no income tax, like, say, Texas or Wyoming, these changes aren't likely to affect you at all. But if you just bought a $700,000 house in Takoma Park, Md., you're screwed three ways.