That legislation reduced individual tax rates by closing loopholes and raising corporate taxes, and it was designed not to add to the deficit. It limits the amount of state and local taxes that workers can deduct, particularly workers in highly taxed, traditionally liberal states. They are pushing legislation that could allow higher-earning individuals to bypass the limits on state and local tax deductions. Another would convert state income taxes to an employer-side payroll tax, which would still be deductible on federal tax returns. PhotoThe state and local tax deduction seems particularly ripe for congressional fighting in the months to come.

Source: New York Times February 23, 2018 21:06 UTC