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Federal tax reform may be saving money for states, even high-tax ones

APRIL 17, 2019 | by Liz Farmer | GOVERNING

Many states that lobbied against federal tax reform’s limit on a certain tax deduction are now benefiting from a potential effect of that 2017 policy change. Tax reform capped the state and local taxes (SALT) that filers can deduct from their federally declared income at $10,000. … But as more people turn to municipal bonds, seemingly as a way to lower their federal tax burden, the result is lower borrowing rates for state governments, which saves money for them. …” (Note: Meanwhile, are federal taxpayers better or worse off in the long run? The ones who don’t buy municipal bonds, I mean.)
 

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