A raft of organizations that represent state and local governments — including the National Governors Association, United States Conference of Mayors
and the National Conference of State Legislatures — quickly denounced the measure, saying it would upset the balance between local and federal interests and undermine growth.
The Partnership for New York, an association of large employers, estimated
that the value to New York City taxpayers of itemized deductions for state and local taxes was $7.7 billion in 2014, or about $6,600 per affected taxpayer.
Taxpayers in 10 states — California, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania, Texas
and Virginia — claim more than half of the total deducted, according to the Tax Policy Center.
Members of Congress generally take a “political Hippocratic oath” to “never be seen to do obvious harm,” he said,
but eliminating the deduction, which would raise taxes and undermine the ability of cities and states to tax, would violate that precept.
Other interest groups have also registered their opposition, like the National Association of Realtors, which said eliminating the state
and local deduction would help to “nullify the current tax benefits of owning a home for the vast majority of tax filers.”
Patrick McGeehan and Adam Nagourney contributed reporting.
Though residents even in some states with low income taxes, including Florida, Nevada
and Washington, also benefit because they can deduct general sales taxes instead, the center said.
That money is particularly tempting because most of the other big-ticket items in the tax code — including the deduction for mortgage interest
and charitable contributions — have been labeled off limits by the White House and House Republicans.