2. DQ.01-12 (Algorithmic) Discussion Question 1-12 (LO. 2) A provision of the Code allows a taxpayer a deduction for Federal income tax purposes for some state and local income taxes paid (with an overall limit of $10,000). a. Does this provision eliminate the effect of multiple taxation of the same income? This deduction provides relief. b. Assume that a taxpayer, an individual, has itemized deductions that are less than the standard deduction. Will the taxpayer benefit from the deduction for state and local taxes paid? because the deduction or state and local taxes paid allowed in addition to the standard deduction c. If the taxpayer itemizes deductions and is in the 10% tax bracket, each dollar of deduction for state or local taxes reduces his or her Federal income tax liability by If the taxpayer is in the 32% tax bracket, the saving is