Actually it's the opposite. For many years taxpayers in lower tax states were subsidizing those in places like New York because the deduction was allowed. If your crooked state government is raping you on property taxes why should you be allowed to take a deduction on federal taxes which decreases your federal liability? Those federal taxes you didn't pay have to be made up by other taxpayers, taxpayers that are usually located in states with more sane property tax policies.
NY state taxpayers have historically paid more revenue via income taxes to the federal government than is received back to the state in federal government spending. Federal spending in NY on a per capita basis is on par with the total federal spending per capita (US). NY though, pays federal income taxes at a higher per capita rate than the US average. That means that NY is actually subsidizing other states. This redistributive function of the federal tax system is by design, to subsidize poorer states in the system.
Property and local taxes should be deductible because they reduce net income. If someone has less net income, their federal tax liability is reduced. Some people are ok with and believe it’s good policy to effectively tax a tax. I oppose this perspective because in my mind, it smacks of double-jeopardy.
The idea that NYers are subsidized by the lower tax states because they can write-off a greater number of taxes paid, supports the idea that the larger pool of revenues of the federal government are in fact the property of the federal government. Same thinking goes into the statement made by opponents of tax cuts, who beg the question - how are we going to pay for this tax cut? This perspective is rooted in the belief that tax revenue is actually the government’s money, not the taxpayer’s.
After the last round of tax cuts, government revenues increased. The issue here is not on the revenue side, it’s on the spending side. Spending needs to be reigned in...taxes can and should be cut further.