RevenuesOption 51
Eliminate the Deduction for State and Local Taxes
| Billions of dollars | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2015-2019 | 2015-2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in Revenues | 25 | 101 | 100 | 106 | 112 | 117 | 122 | 129 | 135 | 142 | 445 | 1088 |
Source: Staff of the Joint Committee on Taxation.
Note: This option would take effect in January 2015. Estimates are relative to CBO’s April 2014 baseline projections.
In determining their taxable income, taxpayers may choose the standard deduction when they file their tax returns, or they may itemize and deduct certain expenses (including state and local taxes on income, real estate, and personal property) from their adjusted gross income, or AGI. (AGI includes income from all sources not specifically excluded by the tax code, minus certain deductions.) The total value of certain itemized deductions—including the deduction for state and local taxes—is reduced if the taxpayer’s AGI is above a specified threshold. This option would eliminate the deductibility of state and local tax payments.