[T]he deductibility of state and local taxes (including property taxes) is expected to result in $81 billion of lost revenue for the federal government in 2015, according to the latest OMB estimates. For another, the policy only benefits particular kinds of taxpayers. For example, it benefits those who itemize their deductions, rather than opting for the standard deduction. This is often characterized as regressive, because itemizers tend to be much wealthier than those who take the standard deduction. Furthermore, its value often varies heavily from place to place. This can be seen on a map we recently published of the values of state and local deductions taken per return.
Source: Tax Foundation
This policy is a kind of ad-hoc, incomplete, and arbitrary subsidy for state and local tax revenues. It benefits federal taxpayers extremely unequally, and it costs a lot of money that could be used for lower rates.
Saturday, September 19, 2015
Map Of Areas Of US That Most Benefit From Deduction For State And Local Taxes
Posted By Milton Recht
From Tax Foundation, "The Biggest Loser of the Presidential Campaign So Far: the State and Local Tax Deduction" by Alan Cole:
Posted 9/19/2015 08:45:00 AM