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Ending the Local Tax Deduction

9 Pages Posted: 21 Jan 2016  

Gladriel Shobe

Brigham Young University - J. Reuben Clark Law School

Date Written: 2015

Abstract

Under this proposal, local taxes would not be deductible for federal purposes, but state taxes would continue to be deductible. A deduction for local taxes is less justified because they provide benefits to local taxpayers in ways that make them more similar to a purchase of private goods, for which a deduction is generally not allowed. State taxes, on the other hand, are more likely to be redistributive, and a deduction for them is therefore more appropriate. The proposal is estimated to raise $45.1 billion in 2016.

The proposal is made as a part of the Shelf Project, a collaboration of tax professionals developing methods for raising revenue in ways that improve the fairness and efficiency of the tax base. Shelf Project proposals imitate committee reports in describing current law, discussing the reasons for change, and explaining the proposal.

Suggested Citation

Shobe, Gladriel, Ending the Local Tax Deduction (2015). Tax Notes, Vol. 149, No. 7, November 16, 2015, p. 955. Available at SSRN: https://ssrn.com/abstract=2719308

Gladriel Shobe (Contact Author)

Brigham Young University - J. Reuben Clark Law School ( email )

430 JRCB
Brigham Young University
Provo, UT 84602
United States

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