| "... both Democrats and Republicans are considering caps on federal income-tax deductions.That could be very bad news for residents of New York, New Jersey and other states and cities that rely heavily on their own income taxes. Such a cap would reduce the value of the deduction for state and local income taxes, which has been part of the federal tax code for a century (though the deduction has been diluted by the alternative minimum tax). That could substantially reduce middle-class disposable incomes in high-tax states, which, in turn, would put pressure on those states to cut taxes and the services they have long chosen to provide....The deduction is Washington's way of supporting states that support their most vulnerable citizens and neediest cities." |
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