GOP's New Plan Hikes Taxes On Americans In Blue States

Sahil Kapur – February 27, 2014, 6:00 AM EST

A central feature of the House Republicans' ambitious new tax reform bill would raise taxes disproportionately on residents of blue states -- especially middle-to-upper income people who live in New York and California.

The sweeping proposal released Wednesday by Rep. Dave Camp (R-MI), the House's top tax writer, eliminates the deduction for state and local taxes, which lets taxpayers who itemize deductions subtract general state and local taxes when calculating their federal taxable income. It's currently the seventh most expensive tax break in code, costing the federal government about $1.1 trillion in revenue over a decade, according to the Congressional Budget Office.