Why should you pay federal taxes on state taxes? Consider that it's long been a complaint that it's "double taxation" to pay individual taxes on dividends which already got taxed at the corporate level. Imagine if, on top of that, you got taxed on the quantity that was paid in corporate taxes, that you didn't even receive. I imagine quite a lot of outrage if liberals proposed that, because it goes even beyond what is already an intuitively unfair situation to a lot of people.