Kotlikoff: Tax Reform in Red and Blue

A new study shows that the benefits of tax reform vary widely – and the most important reason is a new $10,000 limit on itemized deductions for state and local taxes. As a result, high-tax states which tend to be Democratic had smaller gains than low tax states which tend to be Republican. For example, Among the 12 states where the average household has the smallest gain from tax reform, 10 are reliably blue states in presidential elections. Among the 10 states where the average household had the highest gains from tax reform, half are reliably red states in presidential elections. Click here to read more.