Bring On The Deductions
Thank you! I sort of hinted at
this long ago, but Adam O'Neill of the Lowest Deep gets at
the issue more clearly. Democrats should happily endorse the elimination of the local/state tax deduction on progressivity grounds.
The one fear is that, without the deduction, high-income folks in blue states would start clamoring even harder
to lower state taxes—and given that these people tend to have a lot of sway, it could lead to a real shrinkage of blue-state government. On the other hand, the elimination of the state/local deduction would likely come in tandem with a whole bunch of other goodies for wealthy blue-state folks—like the elimination of the AMT—so maybe they wouldn't lash out too strongly. And if they do, well, they can blame the Republicans that raised their taxes. California as a whole may lean blue, but it also raised more money for Bush than any other state but Texas.