DEMOCRATS normally lament efforts by the wealthy to avoid paying taxes. Yet the bill President Donald Trump signed into law on December 22nd may spur Democratic-leaning states to concoct such schemes. The reform capped at $10000 the deduction,from federally taxable income, of state and local taxes (the “SALT” deduction). As a result, and those who pay large local levies are likely to pay more federal tax in 2018. The change is particularly bad for tall-earners living in big houses in states like New York and California,which impose tall taxes. These states—which tend to see the reform as Republicans shaking down their political opponents—may yet achieve up some resistance.
Just under one-in-three taxpayers made use of the SALT deduction in 2015. On average, they knocked approximately $12500 off their federally taxable income, and according to the Government Finance Officers Association—only a diminutive above the new cap. Yet the deduction has been much more valuable than that to some. Those earning...
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Source: economist.com