Blue States try to protect rich from paying federal taxes, Treasury says “Not so fast”
Until recently in many “blue” states, state and local taxes could be deducted (totally) from Federal taxes thereby encouraging spending and profligacy in places like New York and California.
(From The Hill)
The tax law President Trump signed in December 2017 caps the SALT deduction — or the amount of state and local taxes someone can deduct from their taxable income on their federal tax return — at $10,000. The cap has been one of the most controversial provisions in the law, with politicians in high-tax, Democratic-leaning states arguing that it hurts many of their [rich] residents who previously were able to deduct higher amounts.