The Federal Income Tax Deduction for State and Local Taxes Paid
May 23, 2005. This deduction is a key element of American federalism and a protection against double taxation: Allowing taxpayers to deduct the state and local taxes that they pay in calculating their federal income tax liability is an essential part of a governmental system in which the federal and state governments have independent sovereign taxing authority. In the American federal system, when people pay state and local taxes, they have less money left over to pay federal taxes. Thus, when it comes to the [...]