1、 https:/crsreports.congress.gov Updated November 14, 2017Key Issues in Tax Reform: the Deduction for State and Local TaxesA key component of tax reform proposals is their treatment of federal tax expenditures or revenue losses attributable to provisions that adjust income taxes away from a “theoreti
2、cally normal” tax system. Tax reform proposals in the 115th Congress include modifications to the federal deduction for state and local taxes, which is among the largest tax expenditures in the federal income tax system. Debate over modifications to the current state and local tax deduction includes
3、 discussion of issues related to the interaction between federal, state, and local governments, along with the distribution of the total tax burden across jurisdictions and households. Current Law Generally, taxpayers may deduct state and local taxes paid from income when filing a federal tax return
4、. Individual taxpayers must itemize deductions (rather than use the standard deduction) on their income tax return to claim the deduction for state and local taxes paid. The federal tax savings from the deduction on state and local taxes paid is equal to the taxpayers marginal tax rate multiplied by
