“Decisions at the federal level have consequences for states. Therefore, no fundamental tax reform can succeed without an intergovernmental effort,” added Gov. Steve Beshear of Kentucky, a Democrat. “We also need to protect our ability to innovate because what we’re doing at the state level on tax reform can help drive what happens at the national level.”
The state and local tax break is one of the bigger ticket deductions, along with those for charitable giving and mortgage interest. State and local officials have also pushed to protect the municipal bond preference, which is one of the primary ways they finance infrastructure projects.
Both Democrats and Republicans in Washington have called for overhauling the tax code. But the two parties are still far apart over how much revenue the government should collect, which remains a big hurdle for coming together on a reform plan.