Changes at the state level
State governments are also very likely to change their actions in 2018 because of the new federal tax law. Theoretically, states have elements of their tax codes conform to the federal tax code; however, they set their rates separately.
Therefore, a large number of state will have their tax revenues increase (at least on the short term) because they will have broader tax bases.
High-tax states may also feel pressure to lower their taxes or make changes in response to the $10,000 cap on the state and local tax deduction. While that cap doesn’t directly impact state revenues, their residents will now be feeling more of a burden from the state taxes.
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