Bullettin n. 1/2011 | ||
June 2011 | ||
Gilbert E. Metcalf |
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Assessing The Federal Deduction For State And Local Tax Payments | ||
in National Tax Journal , 64 June , 2011 , 565-90 | ||
This 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. | ||