The Tax Cuts and Jobs Act (TCJA) made significant changes to several areas of the tax code including the limitation placed on the State Tax Deduction. On its website, the IRS publishes data detailing the itemized deductions claimed for a given year by state. The most recently published year available is 2017, prior to the enactment of the TCJA. To project the impact of the TCJA on the State Tax Deduction, you have created the following Tableau visualization, which uses the following assumptions and calculations:

• Average Tax Rate: divides Income Tax Before Credits by Taxable Income Amount
• State Tax Deduction: sums State and local income taxes amount, Real estate taxes amount, and Personal property taxes amount

1. The State and local general sales tax amount was excluded from this analysis

• State Tax Deduction * ATR: multiplies the State Tax Deduction by the Average Tax Rate
• Impact: divides the State Tax Deduction * ATR by the Income Tax Before Credits
• Ranked Impact: orders the States from most impacted to least impacted (1-51)

Mouse over the visualization to reveal specific amounts for use in answering the following questions. Adjust the sliders on the visual to determine proper responses.

Texas has the second-highest population in the United States but is ranked 43rd for potential impact by the TCJA limitation on State Tax deductions. What is likely driving this limited impact?

State:		TX
Taxable Income Amount:		1,303,495,028
Income Tax Before Credits:		274,691,550
Average Tax Rate:		0.21073

State Tax Deduction:		42,158,050
State Tax Deduct * ATR:		8,884,161
Impact:		0.0323
Ranked Impact:		43