Government
The Tax Bill Provision That Could Hit Cities Where It Hurts
The State and Local Tax Deduction is regressive. But eliminating it the way the GOP bills propose could be even worse for America.
On Monday, Congress started the process of hashing out differences in the Senate tax bill—passed early Saturday with last-minute changes scrawled by hand in its margins—and the House’s version from November.
The two bills contain plenty that city leaders may find unpalatable. But one feature that has them up in arms is the drastic rollback of the state and local tax (SALT) deduction. Taxpayers in well-off urban areas in Democratic-leaning states like New York and California have the most to lose from this provision. But cities, which levee taxes of their own to pay for goods and services that their constituents need, are also likely to see a negative effect on their bottom lines.