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HomeIllinois NewsThe current tax code promotes bigger government

The current tax code promotes bigger government



Tax-time-topEliminating the deductibility of state and local taxes is a possible offset to lowering tax rates. Jared Walczak explains how the deduction encourages bigger government at the state level

“Just as the state and local tax deduction disproportionately favors wealthier taxpayers, it also benefits states which combine high incomes and high-tax environments. Reliance on the deduction varies widely: the average value of the state and local deduction as a percentage of AGI in the ten states with the highest reliance on the deductions is 6.09 percent, whereas it is only 3.81 percent in the bottom ten states. In New York, the deduction is worth 9.1 percent of AGI; the median across all states is just under 4.5 percent. More staggering, though, is the fact that just six states—California, New York, New Jersey, Illinois, Texas, and Pennsylvania—claim more than half of the value of all state and local tax deductions nationwide, with California alone responsible for 19.6 percent of the national tax expenditure cost.

“To some degree, this is a function of population. Any tax provision, no matter how neutral its application, will flow more to states with higher populations. The state and local tax deduction, however, expressly favors higher-income earners and state and local governments which impose above-average tax burdens. The deduction’s effect is for lower- and middle-income taxpayers to subsidize more generous spending in wealthier states like California, New York, and New Jersey, reducing the felt cost of higher taxes in those states. As the Urban-Brookings Tax Policy Center has observed, state and local governments ‘are able to raise revenues from deductible state and local taxes that exceed the net cost to taxpayers of paying those taxes, in effect allowing those jurisdictions to export a portion of their tax burden to the rest of the nation.’” [Internal citations omitted.] [Tax Foundation]


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  1. Reducing School administrators by 7 to 1 will make it possible to reduce education cost. At the same time it will place more money into the class room.
    Illinois public school in Illinois spent about 1 billion dollars just on PR. This canbe better spent on education
    God Bless Illinois
    Carl Lambrecht

  2. I have seen a large waste problem in local schools. For example:
    One grade school in my area had a paper recycling bin, in which the public was invited to deposit old newspapers.
    At the end of one school year, I found several dozen complete, packaged reams of 8-1/2 X 11 paper of all colors in that container, and in the dumpster next to it, two perfectly serviceable children’s classroom desks.
    This was just ONE school of the six in our district. How much worse is the problem if all
    six schools are involved in it?