"they should tax Democrats and all liberals only"
ccp: You aren't going to like the 'blue state penalty'. It doesn't follow your motto above. http://dogbrothers.com/phpBB2/index.php?topic=1791.msg101397#msg101397
Of the big 3 deductions, mortgage interest, charitable giving and state/local taxes, only the first two survived the first draft.
The problem with this has to do with tyranny of the majority and consent of the governed. The penalty doubly applies to people who live in the blue states but oppose the big government, blue state model.
Take my state for example, please, take it. Hillary won MN by only 1.5%, down 10 points from Obama's 11.5% win in 2008. Meanwhile, Republicans won the State House and Senate, while a lame duck sits in the governor's mansion with pen and phone - no new tax cuts.
In one sense, I agree with the proposal. High income tax states should not get a break on federal taxes just because they tax themselves to death at the state level. We still need a military, and to fund research on spotted frogs, or whatever the feds do with the $4 trillion we give them.
On the other hand, property taxes can be a very unfair form of taxation. A homestead property doesn't have a stream of income or revenue to tax or pay a tax from. The homeowner does, but that is already double taxed progressively on the income side.
Imagine a retired person or couple on a fixed income. Property taxes go up and up over time; income does not. The longer you live the more you are unable to live in the house you bought and paid for over your adult lifetimes. We encourage home ownership for a reason, then we force people out with the other arm of the same big government - right at the point of their life where it is hardest to move. Why would we value borrowing to buy a house over a person's 'contributions to their local schools and communities. It makes no sense.
Therefore, Doug's compromise. Remove the state income tax deduction, but retain the property tax deduction.
While appearing to care and be more fair and inclusive, this will capture vast majority of the revenue IF they really do double the standard deduction.