The New York Times reports on how a U.S. House vote to make the tax cut for millionaires permanent — a vote in which Arkansas Republicans concurred — is causing some Republicans problems, particularly from suburbs in states such as New Jersey and New York. One reason, in addition to the continuing favoritism to the wealthy:
The tax cut caps the deduction for state and local taxes on itemized federal income tax returns at $10,000. It’s punishing in high tax states where a lot of people have high incomes.
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Funny thing. Arkansas is a high-tax state (though low income generally), with a 6.9 percent income tax on top-tier income. The loss of the deduction could be harmful to many of those who have traditionally itemized deductions in the past, though the change is offset by a higher personal deduction and lower tax rates on the highest income earners.
According to Arkansas figures, more than 400,000 taxpayers itemized deductions in 2016. Some 85,000 reported income of $100,000 or more, the range when the limitation could begin to come into play.