Oregon, New York Top List of States Hit by Ending Tax Deductions
(Bloomberg) -- The House tax bill that Republicans released Thursday would eliminate individual tax breaks for state and local income tax deductions, while preserving a break for state and local property taxes.
The property tax deduction would be capped at $10,000 under the bill.
Ending the income tax deductions could affect a number of states that rely heavily on income taxes as opposed to property taxes. An analysis by Bloomberg Economics shows Oregon, New York, Massachusetts and Virginia are the states most reliant on revenues from the tax. The levy generated more than 60 percent of the taxes they each took in last year.
High-income households facing large state income tax bills will be most susceptible to the planned deduction changes. On average, 28 percent of U.S. households earned $100,000 or more in 2016 -- when isolating the four states most dependent on income tax revenue the average jumps to 32 percent. The widest impact may be felt in Massachusetts, where 37 percent of households earn a six-figure salary.
Connecticut and New Jersey also registered high reliance on state income taxes, according to the analysis.
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