There are two separate arguments I can think of for deducting state taxes. First, the federal tax rates are heavily graduated on the grounds that it's less bur

There are two separate arguments I can think of for deducting state taxes. First, the federal tax rates are heavily graduated on the grounds that it's less burdensome to tax people that make more money. But in states with high (also graduated) income taxes, high taxpayers aren't personally making that money (in any meaningful way), nor are they generally getting it back from a proportionally higher amount of government services. States are essentially redistributing income from high-income taxpayers to beneficiaries of social insurance programs and state residents overall. From that perspective, it might make more sense to tax the increased level of state services as income to those who receive it. With a flat federal tax it would make no difference in total collections, but with the graduated federal income tax this would be a much lower on average tax rate. Second is much simpler: most of the state government spending is on education, social services etc... things that are in line with tax-deductible charities. So it's not inconsistent to have state taxes be deductible too (of course getting rid of both deductions is also an option).