New Yorkers will scarcely believe it, but yesterday Senator Schumer criticized a tax reform proposal because it would “sock it to the rich.” The proposal, one of many being considered as part of President Bush’s plan for tax simplification, is the elimination of the deduction of state and local taxes. “In New York City,” the senator said, “people with incomes over $200,000 will see their federal taxes rise on average by more than 20%.”

To see Mr. Schumer come out for wealthy taxpayers indicates that something is awry. The state and local deduction, after all, creates what is essentially a regressive tax across the nation as a whole. Those who benefit most are the ones with the highest incomes in the states with the highest taxes. Since the top federal income tax rate is 35%, the deductions effectively reduce the top state and local income tax rate by 35%.

“This encourages states to impose higher tax rates than they might otherwise adopt, have governments provide services that the private sector might better be able to deliver, and to finance such services with deductible taxes rather than nondeductible fees that might be more efficient,” economist Bruce Bartlett has written. “Low-tax states and those without income taxes in effect underwrite these larger governments and higher taxes.”

That’s why it’s not surprising that Mr. Schumer would want to retain the state and local deductions. The deductions help lighten the heavy tax burden that New York’s state and city governments have imposed on their citizens. In effect, the “red states” subsidize New York and California by paying a higher average federal tax rate.

“Protecting the federal deduction for state and local taxes is my no. 1 priority as a new member of the Finance Committee,” Mr. Schumer said at an Association for a Better New York breakfast yesterday. The senator feels so strongly because “a tax on a tax [is] inherently unfair,” as he put it. “We should be against all forms of double taxation.”

Yet the last time we checked, it wasn’t possible for individuals to deduct New York City taxes on their state income tax returns. Nor does the government allow federal deductions for Social Security taxes, gasoline taxes, and a host of others. If Mr. Schumer plans to be consistent about eliminating “double taxation,” we expect he would propose legislation introducing a host of new deductions.

While you’re holding your breath, there’s no question that New York would be hard hit by eliminating the state and local deduction-at least in the near term. That’s why Governor Cuomo was so vocal an advocate of retaining the deduction when the Reagan administration proposed eliminating it in 1985. Mr. Schumer called for an effort to block the reform similar to the one that was mobilized at that time.

Much has changed since then, however. For one thing, more and more New Yorkers are hit by the alternative minimum tax, which means a growing number of New Yorkers already lose the deduction for state and local taxes. New York City residents who rent rather than own their homes may also be indifferent. People who aren’t eligible for mortgage interest deduction, and so don’t itemize their deductions, don’t benefit from the state and local deduction, either.

Compared to 1985, a larger share of New York residents will be indifferent as to whether the state and local tax deduction remains. But such people do have an interest in New York’s tax rates overall-especially New York City residents, who suffer the highest combined state and local tax burden in the country. If the current system creates an incentive for higher taxes, New Yorkers may be able to benefit from a change that will pressure the state and city into granting more tax relief.

Any move to eliminate the state and local deduction would accompany more fundamental tax reform. So it remains to be seen how an entire reform package, taken as a whole, will impact New York. But we find it sensible for the country to move to a system that punishes rather than rewards states and localities for raising taxes and government spending, which is no doubt what, at the end of the day, is bothering the senior senator from the Empire State.