https://www.apnews.com/2f83c72de1bd440d92cdbc0d3b6bc08c
So you remove this pressure valve and skew those numbers to an even wider margin and you have, I would say justifiable, consternation about what we are doing here when the people who have been paying the bills are asked to pay more.
Arguably, it would make more sense to allow a deduction on state income tax for federal tax paid. That way the federal tax -- which (in theory, at least) pays for services that benefit all states -- is imposed consistently across all the states. Individual states can then decide how much to tax their citizens to pay for the state's local services, without skewing how the federal tax burden is applied.
Because a state can often do a more effective job of using the money than the federal government.
> and therefore shift the burden of paying for federal services to other states
If you look at the states with high enough income taxes for this to all be relevant, they tend to be "donor" states that pay a lot more to the federal government than they get back.
It might be a good idea to even that all out, but eliminating the local and state tax deduction doesn't help.
That's just a general argument for preferring local taxation and services over federal ones. I don't think it follows that states should be able to undermine federal taxation by increasing their own taxes. If you believe the federal government should be smaller, and state/local governments bigger, then make that case directly and argue for an overall reduction in federal taxation.
Assume for now that we accept the federal government is entitled to raise money for its programs by taxing people's incomes (yes, some people might disagree, but that's a different discussion). Why should a state be allowed to reduce the federal government's take, and therefore shift the burden of paying for federal services to other states, by choosing to increase its own local tax?