October 4, 2017
An expensive tax break used by more than 40 million American tax filers to deduct state and local taxes may not be included in the proposed tax reform being crafted by U.S. lawmakers and the White House Administration. The framework for the major tax overhaul unveiled last week included a proposal to fully repeal the break.
Now, lawmakers in high tax states are concerned about a backlash from residents whose tax bills may increase. The deduction is estimated to cost $1.3 trillion over the next decade, and its repeal was viewed as integral to paying for the tax revisions.
An alternative is being considered that would allow taxpayers to choose between deducting mortgage interest or state and local taxes, a limit on the deduction or a special tax break for middle-class families that live in areas with high property taxes.
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