Ray Dalio’s team projects life without the state and local tax deduction will result in higher effective taxes in high tax states, more flight from those states and lower tax collections.
The Wall Street Journal sees some of the effects in California, where Gov. Jerry Brown argues that state employee pensions are set by law, not by contract. The case could have repercussions in North Carolina, where judges have claimed that the state cannot charge retired state employees health insurance premiums, which resulted in an end to those benefits for employees hired after December 31, 2020.
