The State and Local Tax Deduction and Fiscal Federalism

168 Tax Notes 2429 (2020)

24 Pages Posted: 18 Feb 2021

See all articles by Alex Zhang

Alex Zhang

Emory University School of Law

Date Written: June 30, 2020


This Article examines the state and local tax deduction as a mechanism of fiscal federalism, by analyzing the effect of the deduction, calculated as tax expenditures by state, on the imbalance of federal expenditures. It argues that, on the whole, SALT deduction was an effective, albeit imperfect, means of mitigating the imbalance of federal expenditures before the 2017 tax legislation. TCJA’s limit on the SALT deduction vastly undermined this effectiveness, while underscoring the inherent defects and obstacles in advancing federalism with a tax measure.

Keywords: tax law, federalism

Suggested Citation

Zhang, Alex, The State and Local Tax Deduction and Fiscal Federalism (June 30, 2020). 168 Tax Notes 2429 (2020), Available at SSRN: or

Alex Zhang (Contact Author)

Emory University School of Law ( email )

1301 Clifton Road
Atlanta, GA 30322
United States

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