The Trump Administration is currently proposing to either eliminate or cap the deductibility of state and local taxes. This is a fight we have not seriously faced since the tax reform act of 1986. But there are some estimates that this deduction costs the federal government over $1 trillion over 10 years, making it a serious target in tax reform. As we did in 1986, we are launching a campaign against “double taxation” to help the White House and Congress understand what is at stake in this fight. As part of the “Big 7” State and Local Coalition, which includes the Governors and State Legislatures and Cities and Counties, we have met with many of the experts who led the double taxation fight in 1986 to help us understand how the issue played out previously, and what strategy might work best with this Congress and Administration.
In April, the Big 7 sent our tax letter to all of Congress, letting them know we intend to fight hard to defend tax policies that are truly the historical bedrock of the federal, state and local partnership.