“Writing Off” Tax Giveaways: How States Can Help Balance Their Budgets by Reforming or Repealing Itemized Deductions

“Writing Off” Tax Giveaways examines options for reforming itemized deductions in the thirty-one states, plus DC, that offer such deductions. The study, released on August 24, 2010, focuses on five potential reforms: repealing itemized deductions entirely, capping the maximum size of itemized deductions, converting itemized deductions to a credit, instituting a phase-out for upper-income taxpayers, and decoupling from the portion of the Bush tax cuts that repealed the federal “Pease” phaseout. The study finds that every state offering itemized deductions could raise much needed revenues without imposing tax increases on low- and middle-income families by enacting at least one of these reforms.

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