Thursday, February 27, 2014

GOP's New Plan Hikes Taxes On Americans In Blue States

TPM reports:

A central feature of the House Republicans' ambitious new tax reform bill would raise taxes disproportionately on residents of blue states -- especially middle-to-upper income people who live in New York and California.

The sweeping proposal released Wednesday by Rep. Dave Camp (R-MI), the House's top tax writer, eliminates the deduction for state and local taxes, which lets taxpayers who itemize deductions subtract general state and local taxes when calculating their federal taxable income. It's currently the seventh most expensive tax break in code, costing the federal government about $1.1 trillion in revenue over a decade, according to the Congressional Budget Office.

Camp's plan wipes out this break for individuals in tax years beginning after December 31, 2014. "The provision would eliminate a tax benefit that effectively subsidizes higher State and local taxes and increased spending at the State and local level," reads a summary of the House Ways & Means Committee chairman's proposal. It pairs the elimination of the tax break with an increase in the standard deduction, which somewhat cushions the financial blow.
Chuck Schumer channels his inner Tea Party voice:
New York's Chuck Schumer, the No. 3 Democratic senator, waited barely a few minutes before declaring Camp's plan a nonstarter because of the provision. "Any proposal that eliminates the deduction for state and local taxes, as the Republican plan would do, is dead on arrival," he said in a statement.
Doesn't Chuck Schumer want to help fight "inequality"??