Do you know that California disallows federal tax deduction from state income tax? I am surprised to find out about this today. There are only 6 states including Oregon allowing deducting federal tax from state tax.
Since we are now paying more federal tax after partially losing SALT deduction, we the taxpayers need to find a way to reduce state income tax to get it back. One way is to reduce state income tax rate. The other way could be allowing federal tax deduction from state income tax
That’s really interesting. I never paid attention to it either. Shouldn’t this be as big an issue in CA as the SALT cap?
The dollar amount is exactly the same. X * Y === Y * X. X federal tax rate, Y state tax rate.
So mathematically, their bigness are exactly the same.
Can deduct SALT from earned income
Can deduct Fed tax from earned income
Since SALT and Fed tax acts on earned income, don’t you find it odd?
Actually if you think more, SALT deduction does not make sense. If state has a 100% tax rate, Federal tax would become zero.
The key is not deductions, it’s very important to have a low tax rate. Deductions are complicating things and make people overestimate their tax liability.
Exactly. Opposite is also true 
100% Fed tax rate would mean zero state income tax.
State income tax rate would only need to equal federal rate to make federal income tax zero. That would essentially defund the federal government and give all control to the states. The federal government would be limited to payroll taxes, corporate taxes, and a few other taxes it collects.
It’s a deduction, not a credit
Good catch. I was thinking credit.
But States (except 6) don’t allow Fed taxes to be deducted from income to calculate State Tax hence Fed tax rate does not affect State income tax!
You are missed the drift. The discussion is about the ludicrousness of allowing deductions of SALT and Fed Tax either way.
Guilty as charged! 