Assessing The Federal Deduction For State And Local Tax Payments
AbstractThis paper examines the distributional and behavioral impacts of ending the deductibility of state and local taxes against the federal individual income tax. I carry out a number of distributional analyses — considering both variation across income and across states — of the subsidy from deductibility as well as the distributional impact of potential partial reforms. I also consider how behavioral responses affect the distributional analysis. Using a large panel of data on state and local governments, I find that deductibility increases reliance on deductible taxes and increases state and local spending out of own-source revenue.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 64 (2011)
Issue (Month): 2 (June Citation: 64 National Tax Journal 565-90 (June 2011))
Other versions of this item:
- Gilbert E. Metcalf, 2008. "Assessing the Federal Deduction for State and Local Tax Payments," NBER Working Papers 14023, National Bureau of Economic Research, Inc.
- Gilbert Metcalf, 2008. "Assessing the Federal Deduction for State and Local Tax Payments," Discussion Papers Series, Department of Economics, Tufts University 0721, Department of Economics, Tufts University.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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