r/GreenAndGold

So I am curious about a hypothetical.

Say you live in a country with a federal structure, where an LVT would be the domain of the states, and the federal government levies a significant income tax.

States are ordinarily restricted from pursuing a LVT of significant impact, because people would be effectively “double taxed”. (At least that’s how people see it.)

But, hypothetically, a state could allow you to claim your income tax as a deduction to offset the amount due for your LVT.

My sense is, this would allow a state to pursue a LVT that recoups 100% of the rental value (or close to it) and still get most or all of the benefits of an LVT.

But I am curious as to whether other folks here think this would work?

Edit: To be clear, this is about the state government. Assume you have zero influence over the federal government, could the state government do this and still get the benefit of a meaningfully significant LVT?