Proposal Would Hit Blue State Taxpayers
Can't remember if I posted on this before, but it has been in the press.

As President Bush lays the groundwork for a possible overhaul of the U.S. tax code, one option under consideration would deal its biggest financial blow to citizens of blue states such as California and New York. Some conservative activists are urging the Bush administration to scrap the federal deduction for state and local taxes as part of a broader plan to revamp the nation's tax system...Taxpayers in California and New York, for example, which have top state income tax rates of 9.3% and 6.5% respectively, would be highly affected; residents of Florida and Texas, which have no state income taxes, much less so.
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That's quite a bite. So, New Yorkers would pay 9.3% of their income to the state, and then pay federal tax on that portion of their income as well. Ow.