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It's not clear to me why the federal government should accommodate the state taxation structures. That is, uncapped deductions effectively mean that federal tax
by tacitusarc 6y ago
It's not clear to me why the federal government should accommodate the state taxation structures. That is, uncapped deductions effectively mean that federal taxes are applied after state taxes. Couldn't states provide a deduction based on federal taxes if they think this is unfair to residents?
- dragonwriter 6y ago> It's not clear to me why the federal government should accommodate the state taxation structures. There is potentially an argument for no SALT deduction, though I think a lot of factors (including federalism) weigh in favor of it, and that it is on-balance justified; its something on which there is reasonable disagreement. But that’s not the debate. The debate is between a limited SALT deduction designed to create federal pressure to force the more successful states to adopt tax and spending policies more like the least successful states, and an unlimited SALT deduction that lifts the federal governments thumb off state tax policy.