Quote:
Originally posted by taxwonk
Because the principal of comity requires that one sovereign not impinge on another sovereign's more direct claim to taxes. In the foreign arena, this is accomplished through both tax treaties and the foreign tax credit. In the U.S., it's accomlished by the federal government not laying claim to tax on dollars already claimed as tax by the several States.
It's federalism at work. Federal tax policy doesn't favor one state's choices over another's. Federal tax policy recognizes that it cannot claim as taxable income money that has already been claimed as tax by the state. The Peoples' right to choose not to favor higher tax rates is preserved through their power to either vote or move.
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On para. 1, how is what you say consistent with the AMT, which removes the deduction for state income taxes?
on para. 2, it favors the choice between sales and income taxes (or did for years). And why can't it "double" tax--we do it at the federal level alone, and it's done at myriad other levels as well, including by the states, who tax income that's also taxed by the federal gov't. I don't recall a deduction for federal taxes on any state income tax form I've completed (for at least four states).
