2005 ADOPTED RESOLUTIONS
URBAN ECONOMY POLICY

PRESERVE DEDUCTION FOR STATE AND LOCAL TAXES

WHEREAS, State and local taxes have been deductible from Federal income taxes since the first Federal income tax in 1862, and

WHEREAS, The President has appointed a panel to recommend changes to the Federal tax code to simplify the tax code so as to reduce the costs of administration and compliance, to share the benefits and burdens of the tax system in an appropriately progressive manner, recognizing the importance of homeownership and charity, and to promote long-run economic growth and job creation, and

WHEREAS, State and local taxes create and support the environment that allows business to grow by paying for the roads on which commerce runs, the schools that educate the labor force of the future, the police who provide security, the courts that settle disputes, the collection of trash, the provision of water and the many other services and infrastructure investments that make our economy possible, and

WHEREAS, Eliminating the deduction for state and local taxes would not simplify the tax code, since the deduction is already clear and simple, and

WHEREAS, Eliminating the deduction would not improve taxpayer compliance or simplify tax administration, since there is now a simple and well-established system to report to the Federal government and the taxpayers just what their deduction should be, and

WHEREAS, Eliminating the deduction for state and local taxes would increase the unfairness of the Federal tax system in two ways. First, families would effectively be taxed on money they do not have. Second, because state and local taxes vary around the country, denying the deduction would mean that families who have the same after-tax incomes could be taxed differently at the Federal level depending on where they lived, and

WHEREAS, Eliminating the deduction for state and local taxes would effectively impose on everyone one of the more unfair aspects of the Alternative Minimum Tax, which denies the deduction for State and local taxes, THEREFORE, NOW BE IT RESOLVED THAT the United States Conference of Mayors calls on the Presidentís Advisory Panel on Tax Reform to preserve the deductibility of State and local taxes in any recommendations it makes, and

BE IT FURTHER RESOLVED THAT the United States Conference of Mayors calls on the President to preserve the deductibility of State and local taxes in any tax proposals he makes, and

BE IT FURTHER RESOLVED THAT the United States Conference of Mayors calls on the Congress to preserve the deductibility of State and local taxes.

©2005 The U.S. Conference of Mayors
Tom Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Tel. 202.293.7330 ~ Fax 202.293.2352
info@usmayors.org