Fiscal federalism and the deductibility of state and local taxes under the federal income tax
By: Louis Kaplow
Contributors: Harvard Law School. Program in Law and Economics
Series: Discussion paper -- no. 167; Discussion paper (Harvard Law School. Program in Law and Economics) -- no. 167
Publisher: Harvard Law School
Published: 1995
Place of publication: Cambridge, MA
Language: eng
Number of pages: 93
Subjects: Income tax deductions for taxes; Income tax deductions
Description: Whether state and local taxes are deductible is believed to have important effects on revenue, tax equity, and the operation of state and local governments. This article's analysis of deductibility draws on previous work that addresses the fiscal activity of state and local governments in order to determine the incidence of both taxes and the benefits they finance. The desirability of deductibility is assessed not only by reference to whether it is required by a conceptually pure income tax but also in terms of how it serves the underlying objectives of the income tax. The results of this investigation contradict many of the arguments offered by advocates and opponents of deductibility.
Notes: Subsequently published in Virginia Law Review, Vol. 82, No. 3, April 1996, 413-492

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