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I don't think that's how it is supposed to work.

Of course you're right.
However, since we're discussing the overall fairness of the federal tax system, it is certainly relevant where all that tax money is spent.
Under the current system, federal tax and spending policy already amounts to a large subsidy paid by the high-tax states to the low-tax states (on average).

With the changes under the Trump reform, if the deductability of state taxes is eliminated, that wealth transfer from high to low tax states would increase dramatically, as the burden of financing the federal budget is shifted even further to the high tax states.

So you really can't make the argument that deductibility should be eliminated because "low tax states are subsidizing high tax states", since it's really the other way round already, and this would just make it much worse.

Not to mention the fact that this will hurt the ability of the high tax states to make the required investments to maintain their ability to continue paying these subsidies in the future.
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