Many Californians face a big financial hit under the Republican tax plan, which would eliminate a major tax break that benefits state residents more than those anywhere else in the U.S.
The federal deduction for state and local taxes allowed Californians to reduce their taxable income by $101 billion in 2014, according to an analysis by the nonpartisan Tax Foundation.
The tax outline released Wednesday by President Trump and top congressional Republicans would ax the break, which largely benefits residents in states that are Democratic strongholds.
About 44 million taxpayers claimed the deduction in 2014, including 6 million in California, according to the Tax Policy Center.
The deduction lowers taxable income but only partially translates into less taxes paid. Still, it reduces federal tax revenue nationwide by $96 billion this year, according to the Treasury Department.
That makes it one of the most costly breaks in the individual tax code. Eliminating it would increase federal revenue by about $1.3 trillion over 10 years, the Tax Policy Center said.
The Tax Foundation found that 88% of the benefit of the deduction in 2014 went to people with incomes of more than $100,000.