State and local deduction

'One of the most costly tax expenditures, for example, is the deduction for state and local taxes, which in effect subsidizes high-tax jurisdictions by softening the blow of high state and local tax burdens. Eliminating this deduction would make voters in states such as New York, New Jersey and California more tax-sensitive, which might make them more likely to back state and local candidates who promise a more cost-effective government.

 

Elimination of the deduction would also be a bonanza for the U.S. Treasury. In fiscal year 2011, the state and local tax deduction cost the federal government $70.2 billion in forfeited revenue. In April, the Committee for a Responsible Federal Budget estimated that eliminating the state and local tax deduction would raise $1.3 trillion relative to current policy (the tax rates that prevail today) and $950 billion relative to current law (the tax rates that will be in place if we go over the fiscal cliff) from 2013-2022. This alone would go a long way toward meeting Obama's revenue goals.'

 

http://blogs.reuters.com/reihan-salam/2012/12/14/tax-hikes-conservatives-can-love/

 

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Best wishes,

John Coffey

http://www.entertainmentjourney.com