President Trump: The NEW one and only politics thread

The reason to argue that state and local taxes should be deductible is that you are getting double taxed -- taxed on income you never saw. First you get taxed at the state level. If there is withholding, you never even see the money. Yet, the Federal government turns around and taxes you on that money you never even touched. ... as income. I'd argue that is a more legit deduction than the home mortgage interest deduction, for which the basis is a decision by a person (something they can control) to borrow money, and for which the person receives a benefit (buy a home) in return for the interest they pay in exchange. That deduction is a simple, random handout.

From a political perspective, anyone paying a lot of state income tax in a high tax state such as New York or Cali, takes a hit with the elimination of the deduction. and the legislators from those states are going to face heat if it is eliminated.

The reason to eliminate it? We are running huge budget deficits, most of which is spending that is locked in on entitlement programs which are costing more and more. This whole exercise is a farce, but to the extent that they are going to play it out, they are going to try to pretend that they can somehow cut taxes, keep increasing spending the way we have (and have plans to moving forward) and not have our national debt keep exploding. So they are playing around the edges to find new revenue, and if they do away with the state and local tax deductions, it means a little bit more in tax receipts (but an insignificant amount relative to the overall debt we are adding on at an exponential pace).