Final answer:
State and local taxes on income allow for a more customized approach to address specific needs and policy goals within communities, provide better insights for revenue allocation, and offer room for policy experimentation.
Step-by-step explanation:
The question refers to the distinctions between federal taxes and state and local taxes. One of the benefits of having state and local taxes on income, instead of collecting all such taxes at the federal level, is the allowance for a more tailored approach to taxation that can address specific local needs and policy goals. State and local governments have better insights into the needs of their communities, which means they can allocate tax revenue more effectively within their jurisdictions. Additionally, this system permits a certain degree of experimentation with tax policies at a smaller scale, which can be instructive for other states considering similar measures.