著者

赤石 孝次

出版者

長崎大学経済学会

雑誌

経営と経済 = 經營と經濟@@@Journal of Business and Economics (ISSN:02869101)

巻号頁・発行日

vol.77, no.4, pp.45-86, 1998-03-25

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This paper reviews issues with analysis put forth in the Treasury Ⅰ(1984), Treasury Ⅱ (1985), and in congressional testimony, which has argued for the repeal of the nonbusiness state and local taxes deduction for itemizing taxpayers. In offering several arguments in support of its repeal, the Treasury Department has denied the deductibility on the basis of the two basic rationales; that is, the deduction is not necessary to define the federal income tax base properly under the ideal fiscal federalism, and the deduction cannot be justified on the rate-limiting rationale under the rate reduction proposal. But, it arrives at the consistency with the proper treatmnet of the state and local taxes under the comprehensive income tax by substituing the marble cake type federal system with the layer cake type federal system. By identifying issues behind the justification for eliminating the deductibility, this analysis suggests that the Treasury's arguments for repealing the deductibility has several policy implications; reducing the total business tax burden, reducing the size of government at all levels, and using the revenue for the federal income tax rate reduction.