It's pretty clear that Federal income taxes are going to up, ostensibly only on the upper 1 or 2 percent, but of course really paid by all of us. (You low information voters out there that haven't yet figured this out are just going to have to sit this discussion out.) Part of this will likely be a further descent of the Federal alternative minimum tax into the middle class, which limits or eliminates otherwise legitimate deductions, among them state and local taxes. Some of this will likely find its way into the 1040 form itself, applicable to potentially anyone currently using Schedule A.
Enter now Minnesota Governor Mark Dayton who also demands a "fair" share of the same money of the same set of targeted taxpayers in the form of still higher upper brackets. If the basis of that reported income is no longer net of state and local taxes, this is a tax on money they never saw. Equivalently, it is a tax rate increase, applied to the income actually realized, an increase whether the DFL keeps its word on raising taxes or not.
Decades ago, we used to be able to deduct Federal taxes on our Minnesota income tax returns. This was eliminated in the name of simplication, fairness, and / or disguised increases; I forget which. But if the result of that plus President Obama's significant tax increases is that nobody on either return gets to deduct the taxes paid on the other, this is double taxation. Surely liberals and conservatives can agree that's not "fairness," certainly not the original intent and design. Since the President appears not to be listening to anybody, including our Governor Dayton, we must solve this problem here in Minnesota.
"Sometimes the old ways are the best," says James Bond in his latest film. Depending on what actually happens in Washington, the old way of deducting Federal income taxes on our state returns may be the best as well.