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Key policy issues of progressivity, the study is used to evaluate state and local tax changes, including the impact of local sales taxes. The study indicates that sales taxes are more regressive than the property tax, but less so than many excise taxes, such as the taxes on motor fuels and cigarettes. However, these formal measures of fairness differ from popular notions of fairness based on what ordinary people think. While studies show sales taxes to be regres- sive, surveys indicate that many people consider the sales tax to be fair, simply because the taxis collected only at the time of purchase. This straightforward definition of fairness and its relative simplicity (to the layperson, at least) may explain why the sales tax tends to be the least disliked of all tax types. Federal deductibility State and local sales taxes are not deductible on federal income tax returns. But local income and property taxes continue to be deductible from federal gross income. As a result, a portion of every dollar of local income or property tax revenue paid by local residents is exported to taxpayers in other states through the federal tax system (though Minnesotans likewise pay a portion of other states' income and property taxes). In contrast, the resident portion of local sales tax is fully borne locally. The extent to which this deductibility issue might affect taxpayer attitudes regarding the selection of local revenue options is not clear. Summary of Issues A report by the National Conference of State Legislatures provides a concise sum- mary of the issues described above: Local option taxes allow local people to have more control over tax decisions and improve local flexibility to meet regional service needs. However, they may create local accountability problems, hamper state flexibility and impose additional administrative and compliance costs on businesses and individuals. They also may affect the balance and fairness of the state-local system and create harmful competition between local governments. 10 Observing that there is no ideal mix of taxes, each state is advised to weigh the trade-offs in the context of their history, geography, competitive position, and tax system characteristics. 10 Criticallssues in State-Local Fiscal Policy, A Guide to Local Options Taxes. National Conference of State Legislatures. November 1997. p.l 14