GOP tax plan targets itemized deductions ( mortgage interest, charitable donations, health benefits)

[Omaha Steve]

Source: AP-Excite

By STEPHEN OHLEMACHER

WASHINGTON (AP) - A GOP plan to raise taxes by $290 billion over the next decade would limit deductions for mortgage interest, charitable donations and state and local taxes as part of a deficit-reduction deal. Some workers could also see their employer-provided health benefits taxed for the first time, though aides cautioned that the plan is still fluid.

The plan by Sen. Pat Toomey, R-Pa., who serves on the 12-member debt supercommittee, would raise revenue by limiting the tax breaks enjoyed by people who itemize their deductions, in exchange for lower overall tax rates for families at every income level. Taxpayers who already take the standard deduction instead of itemizing - about two-thirds of filers - could see tax cuts. The one-third of taxpayers who itemize their deductions might find themselves paying more.

The top income tax rate would fall from 35 percent to 28 percent, and the bottom rate would drop from 10 percent to 8 percent. The rates in between would be reduced as well.

A GOP congressional aide said the plan is designed to raise taxes on households in the top two tax brackets. That would affect individuals making more than $174,400 and married couples making more than $212,300. Some Republicans say the plan offers a potential breakthrough in deficit-reduction talks that have stalled over GOP opposition to tax hikes and Democrats' objection to cuts in benefit programs without significant revenue increases.

Read more: http://apnews.excite.com/article/20111117/D9R2C3K82.html

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In this Nov. 15, 2011, photo, Sen. Patrick Toomey, R-Pa., rushes through the Capitol to a closed-door meeting with other Republican members of the Supercommittee, in Washington. A GOP plan to raise taxes by $290 billion over the next decade would limit deductions for mortgage interest, charitable donations and state and local taxes as part of a deficit-reduction deal. Some workers could also see their employer-provided health benefits taxed for the first time, though aides cautioned that the plan is still fluid. The plan by Toomey would raise revenue by limiting the tax breaks enjoyed by people who itemize their deductions, in exchange for lower overall tax rates for families at every income level. (AP Photo/J. Scott Applewhite)

[4dsc]

1. Attacking the middle class and poor again

When this this madness stop?

[leftyohiolib]

2. 2012 if enough people vote the correct way

[leftyohiolib]

3. dupe-

[Gman]

4. No! This is a non-starter

[droidamus2]

5. Smoke and mirrors

This looks like smoke and mirrors to me as it wouldn't surprise me that the wealthy with access to good tax accountants would just be able to shift the loses they might incur by losing some selected deductions to other remaining deductions. Why is it that the top rate has to fall 7% while the lowest rate (those that could use the money the most) only goes down 2%? The fact is the greediest all will not be happy until their 'stated rate' is 0% (I would suspect that very few of the uber-rich actually pay the full 38% income tax as per Warren Buffet). Another question why not get rid of all deductions and tax all income whether from wages or investments? On top of that pass a law that when it comes to the federal tax deductions of any kind will never be allowed. If you don't ban all 'deductions' in perpetuity what keeps the wealthy from having their lobbyists work to reinstate or add new deductions that only apply to the wealthy. To me the whole idea of 'raising taxes' by lowering the rates and closing some loopholes sounds like they think the general public is stupid or at least doesn't understand how the wealthy are able to game the system.

[DallasNE]

9. There Is No 38% Bracket In Current Tax Rates

That is what it would be if the Bush tax cuts were allowed to expire. And that is what this is really all about. Not letting the Bush tax cuts expire. Here are the 2011 tax brackets.

http://www.taxbrackets2011.com/

[russspeakeasy]

14. They don't think we're stupid.. they just don't care.

[nineteen50]

6. Surprising no mention

of corporate and business entertainment deductions,
depreciation allowances, operating cost deductions, subsidies
reduction, transportation deductions, Rental expenses
deductions, gambling loses deductions, canceled debt
deduction, retirement payments for millionaires, health
coverage for millionaires, jobless benefits to those earning
millions, corporate agriculture subsidies, mortgage interest
deductions for yachts, disaster Assistance, child care cost
for millionaires etc.

[joeglow3]

12. Where did that list come from?

Operating cost deductions. Transportation deductions. Gambling loss deductions. Is your position we just tax gross income of all business? At what rate? Considering many companies have a 5-10% profit margin, you are looking at bankrupting the vast majority of companies.

[zalinda]

16. Some of those are legitimate, but others are give aways to the rich.

Does a 99er get to deduct his fishing boat? And the gambling loss deductions? Come on, gambling is like smoking, it's a decision that you make, not a necessity. If the rich get to deduct gambling loss, the poor should be able to deduct the cost of cigarettes.

zalinda

[Sgent]

26. The gambling loss deduction

is only allowed to the level of gambling gains.... ie:

I won 100,000
I lost 125,000

I will owe no taxes on my gains -- but the 25,000 extra is lost (there is no deduction).

[Swede Atlanta]

7. Once again it is the 99%........

Have these people no shame? Do they know what is going on in this country?

I am all for capping home mortgage interest to say the average level of interest to be paid on an average American home, say $300K. If you choose to purchase a more expensive home that is fine but you won't be given a tax deduction for the cost over an average home.

Further I am all for capping charitable deductions to a % of gross income. I am all in favor of charitable giving but there has to be a balance between the needs of these organizations and the need to address the budget deficit.

But........all of these proposals are the types of deductions taken by the 99% Where are the deductions and tax give-aways for the 1%? How are they going to contribute to paying down the debt that was incurred as their wealth continued to concentrate?

[DallasNE]

8. A Baby Step In The Right Direction

Maybe. Of course the devil is in the details. The problem is the very small size due to the large decrease in rates. When the annual deficit is over $1 trillion a tax increase of $29 billion is pathetically small. And this is the talking point number. The likely amount would almost certainly be much smaller -- perhaps even revenue neutral at best. I could, perhaps, support this without the rate changes.

[freshstart]

10. Taxing health insurance?

That system is already rigged. Employers say health benefits cost 20K for a family plan....and workers will add another 20K to their income? They are gaming the system alright, in favor of the 1%.

[Betty]

11. so predictable. Lower taxes on the top even more

because the bush tax cuts didn't go far enough. I wish they would just cut to the chase and propose NO taxes whatsoever on the wealthiest, because that's their ultimate goal. Maybe some of the tea robots would wake up if it were that obvious.

[OnionPatch]

13. How in the world do they get ANYONE to vote for them?

They are so obviously in the pockets of the rich. They don't even try to hide it anymore. It sickens me that a good chunk of Americans will vote for these goons. :banghead:

[russspeakeasy]

15. They will vote for them because they are more interested in

beating Mr. O... than doing what's right.

[valerief]

18. The could never do it without their army of ministers in churches telling their flocks how to vote.

[Trillo]

17. Let me see if I understand this.

By reducing the mortgage deductibility for "home owners" (a misnomer, as they don't yet own, essentially their landlord is the bank or note holder), it seems more downward pressure will be brought to bear on housing prices. This would be less than desirable for anyone currently holding a mortgage, but possibly good for anyone who doesn't have a mortgage, if it also results in lower apartment rental costs. However, there is no good reason to presume an exact correlation between house or condo prices versus rental rates.

By taxing health care benefits, upward price pressure on costs for health insurance (that may or may not be actually used in the form of medical services) seems to occur.

[sinkingfeeling]

19. While those 'corporate people' get to write off all of their expenses and pay no tax.

[SoapBox]

20. Toomey is a GOPBagger, isn't he?

...what ever it is that he and his ilk would propose, will be BAD for the 99%!

And, hows about cutting a few bazillion from that bloated military budget? Prime example...now
Obama wants to set up a big "military shop" in Australia? HELL no, I say.

[newspeak]

21. they had some repug congresscritter on faux news this morning

there's more devil in the details. He was explaining to the talking head that there are some cuts that the plebes are not going to like, but it has to be done to cut the deficit. I wanted to scream at the telly, your boy helped cause this deficit and economic hole, while enriching his friends and now you want to cut from those who are already hurting, you @#*#%. As respected economists have been repeating over and over again, need a big stimulus to get people working, don't cut benefits that people need and the money will circulate and the deficit will take care of itself.

These unconscionable greedheads just want to give more public authority to corporations, and we will be spending even more for probably less services. But, the corporations will have even more power over the people and government than they have now, if you can believe that. The ryan plan is a piece of shite for the plebes, but it's the golden calf for the ones that are getting wealthier by the minute.

So, this man, to me, is basically warning of the cuts they want to make on policies helping those who are are in need (and growing with this shite economy). He and his ilk who helped create this quagmire can shove the deficit where the sun don't shine, I'm tired of my tax money going to bogus wars, wealthy war profiteers and corporate deregulated gluttons. You want to talk about rebuilding our worn out infrastructure or help people keep their homes, food and medical for the sick, I'll gladly pay the piper. Right now, I think my money I pay in taxes, much is being wasted and not utilized effectively to help this country and its' people. It concerns me what they have in store for the plebes using the excuse of austerity.

[knitter4democracy]

22. This single mom will pay more. Great, thanks, GOP.

Yet more proof that you don't frackin' care about the 99%.

[castnet55]

23. Republicans tax scheme

They can also cut out all deductions for second homes

[midnight]

24. 1% continues to use their power and influence against the 99%

[tclambert]

25. Well, yeah, they want to go after those loopholes that help poor people avoid taxes.

'Cause you know they think it's so unfair that the poorest 50% who make less than $34K pay so little in taxes, while oppressed rich people pay most of the federal income taxes. (Ya hafta overlook Social Security taxes, 'cause the rich get such a break there.)

Long term dividends and capital gains are taxed at only 15%, rather than the 25% many middle class people pay on their incomes, or the 35% the rich are supposed to pay on their incomes. But you won't hear Republicans talk about fairness there. Actually, you might hear them complain that poor people pay hardly any taxes on dividends or capital gains. The trick there being POOR PEOPLE DON'T GET ANY.

[PurityOfEssence]

27. What do they mean by "limit the deduction for mortgage interest"?

What are the specifics?

This is a body-blow to the remains of the middle class unless the "limit" is set rather high.