The following article by Capri Cafaro, Executive in Residence at American University, was posted on the Conversation website December 7, 2017:
While Washington is claiming victory, states are crying foul.
Late last week, the U.S. Senate passed its version of the tax reform package that cleared the House a few weeks earlier. Within the hundreds of pages of legislative language in each bill lay a number of provisions that have significant impact on state governments, including modifications to the state and local tax deduction.
Under current tax law, individuals who choose to itemize and deduct eligible expenses on their federal tax return are able to deduct state and local income, sales and property taxes. Both the House and Senate billseliminate the so-called “SALT deduction” for state and local taxes while capping the property tax deduction at US$10,000.
As a former Ohio state senator, I served on the Senate Ways and Means Committee for a number of years. I also went through five state budget cycles over 10 years. Because of that experience, I believe the federal changes to the SALT deductions will be detrimental to American families and have long-term negative impacts on balancing state budgets. Continue reading “The GOP tax plan, state and local taxes deductions – and you”