Proposals pending in Congress to alter the limitation on the state and local tax deduction have put Connecticut between a rock and a hard place. How should our Congressional representatives balance the competing issues of reducing income inequality nationally versus protecting our state’s unique interests?

Ever since the federal income tax was adopted in 1917, payments for state and local taxes have been exempt from federal taxation. Income, property and sales taxes paid to states and municipalities have qualified as “below the line” itemized deductions, similar to deductions for medical expenses, home mortgage interest and charitable donations that reduced “adjusted gross income” (AGI) to “taxable income.” The policy principle, in place for more than 100 years, determined that personal income already paid as taxes to states and municipalities should not be subject to a second bite of federal taxation.

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