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GOP Plan Takes Away Itemized Deductions

From an elated Associated Press:

GOP tax plan targets itemized deductions

November 17, 2011

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.

Lest we forget, 47% of the country already pay no income tax. So it will be the percent who do pay taxes that would have to pay more taxes.

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.

If any of this sounds familiar, it should. This is the same deal Reagan got from the Democrats back in 1986. In the ‘Tax Reform Act of 1986,’ tax deductions were taken away in exchange for lower rates. But the tax rates soon crept back up, from 28% to 35%. However, the deductions never returned.

History might not repeat itself, but stupidity sure does.

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.

Notice how ‘the rich’ keep being defined down. This brings the cut off down from $200,000 to $175,000.

By the way, the current salary (2011) for rank-and-file members of the House and Senate is $174,000 per year. Isn’t that a coincidence?

House Speaker John Boehner, R-Ohio, spoke of it favorably, but his party’s majority leader, Rep. Eric Cantor of Virginia, has declined to endorse it. Several GOP presidential hopefuls also have criticized if for offering to increase taxes.

Democrats, meanwhile, have panned the plan, saying it would cut taxes for the wealthy, raise taxes on the middle class and generate less revenue than advertised…

And never mind that this is almost a carbon copy of plans that Democrats have proposed in the past. They don’t want any kind of a bill. They want to run against a ‘do nothing Congress.’

Some details of Toomey’s plan remain in flux, in part because he is open to changes to help forge an agreement, said the GOP aide, who spoke on condition of anonymity to discuss private negotiations. The aide confirmed that Toomey’s plan is closely modeled after a proposal by three experts at the National Bureau of Economic Research, a private research organization perhaps best known for deciding when recessions begin and end

Under their plan, the tax benefits from itemizing deductions and excluding employer-provided health insurance from taxable income would be limited to 2 percent of taxpayer’s adjusted gross income

In other words, for all intents and purposes, they will be taken away completely. This will be a tremendous boon for the housing market and charities. And look how it will help people pay for their health insurance.

The plan envisions millions of additional taxpayers switching to the standard deduction, which would simplify their returns

Isn’t that kind of them? Why not just let the government decide how much they want? That would save us from having to do any paperwork.

This article was posted by Steve on Thursday, November 17th, 2011. Comments are currently closed.

7 Responses to “GOP Plan Takes Away Itemized Deductions”

  1. GetBackJack says:

    I remind everyone here that while we wish upon the Democrats a fatal disease and eternity in Hell, the Republican Party has roots so Red that it’s real history has to be buried in the Memory Hole for you to continue to invest your hopes in them.

  2. tranquil.night says:

    What’s the tally now on GoP to Demoncrap compromise proposals?

    They’re just laughing while Repubicans keep twisting themselves into a fold. Smashing their faces in.

    Any one want to put down bills that a week from now we’re going to see another ‘Grand compromise’ breakthrough which will be shuttled through Congress before it can be thoroughly examined, and upon a closer look will be a total turd sandwich? It’s either that or the Left is just waiting for the trigger cuts while the polls show that the GoP will get the blame for the Super Committee fail.

  3. proreason says:

    I just have this wild feeling that taxes are high enough already.

    The country’s financial problems just seem like they come from something else.

    What could it be. What could it be.

  4. tranquil.night says:

    Rep. Jeb Hensarling, 9/23/11: http://www.gop.gov/press-release/11/09/23/hensarling-statement-on-first-anniversary

    “The Pledge to America was launched as a mission to change the culture of Washington that left our nation in an unprecedented debt and unemployment crisis. We started this Congress by cutting our own budget and voting to repeal the government takeover of health care. Over the last nine months, House Republicans have changed the discussion in Washington from ‘how much can we spend’ to ‘how much can we cut.’ In August, we forced President Obama to sign legislation into law that will, for the first time since World War II, cut discretionary spending for two years in a row. And for the first time in 15 years we will vote on a balanced budget amendment to the Constitution that will permanently change the way Washington spends taxpayers’ money.”

    What a resume of success.

    Hensarling, 11/13/11, “State of the Union:” http://www.rawstory.com/rs/2011/11/13/gop-super-committee-member-tax-increases-are-a-reality/

    “We believe, frankly, that increasing tax revenues hurt the economy, but within the context of the bipartisan negotiation with Democrats, clearly they are a reality.”


  5. tranquil.night says:

    Tea Party Caucus’ debt commission spending cuts proposal incoming: http://www.humanevents.com/article.php?id=47588

    Meanwhile Rubio is teamed up with witch-slayer Coons on the AGREE Act to counter the ‘do-nothing Congress’ narrative: http://hotair.com/archives/2011/11/17/rubio-coons-agree-act-obamas-nightmare/

    At least we got some leadership up there.

  6. Rick Caird says:

    I wonder if it has occured to our brilliant Congress that eliminating the mortgage deduction will drop home prices even further putting even more people under water.

  7. BillK says:

    Apparently Toomey forgot everything he believed when running Club For Growth, and is now heading “Club for Economic Destruction.”

    Also this seems to be yet another step in defunding charities – which the left has always wanted as that will leave the Government as the only source of “charitable” help.

    It’s been a tough week for me, with Ann Coulter supporting “Hey, Obamacare would be fine if it were the states that forced you to buy insurance” Romney this week.

    It’s starting to look more and more like I won’t need to worry who the Republican candidate is in 2012 since I certainly won’t vote for Obama but I won’t vote for Romney or Newt, either.

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