San Diego Law Review

Document Type



The Tax Cuts and Jobs Act of 2017 (TCJA) made many changes to federal income tax law, but none of them may be as important to the functioning of our federal system as the changes the Act made to the deduction for state and local taxes. The Act, by decreasing taxpayer savings for state and local tax expenditures in both obvious and obscure ways, has substantially increased the burden of paying state and local taxes and is a major threat to state and local government ability to tax for public benefits. The threat to state governments is demonstrated by the recent lawsuit filed by four states contesting the constitutionality of the provision.

The enclosed article examines the deduction for state and local taxes from the unexplored perspective of the conflicts in federalism where the federal and state governments share common tax bases. This article suggests that the SALT deduction is not an unnecessary subsidy to states and their taxpayers, but is instead a natural resolution of a problem of double taxation that is commonplace where two or more nations or two or more states have sovereign tax powers. This article proposes eliminating the burden of federal-state double taxation by providing a tax credit for state and local taxes which would be available to all taxpayers.