Just as Obama has gone after charitable organizations and churches by reducing the amount that can be deducted on your taxes (only if you're in the top two income tax brackets of course) we have our own Socialist here in Minnesota- Bloomington Representative Ann Lenczewski proposing the same type of legislation. The DFL House Tax Committee Chair takes it step further and also wants further reduce deductions allowed for child care, dependent care and the big one- mortgage interest- for those at higher income levels. (Obama's going to be proposing the same things very soon- they all have the same playbook).
This is an excellent blog from the Wall Street Journal on what Obama is trying to accomplish- a European model where people see the state as the provider of charity- not the individual. I also completely agree with the blogger when he says he'd be happy to get rid of all deductions in return for a simpler, flatter tax. But since that ain't happening anytime soon, we'd like the full value of the limited deductions we qualify for- thank you very much- because we don't qualify for most of the "credits".
From the Star Trib today:
The top House Democrat on tax issues said Monday she wants to eliminate a host of tax breaks while cutting income taxes for those of modest means and giving businesses two long-sought tax changes.
The proposal would lower the tax rates for the two lowest income categories, while creating new simplified tax credits for mortgage interest, charitable contributions and family expenses.
Here's the legislation proposed today. I've read through it and have done some calculations, but will wait until there's some analysis out there to confirm my conclusions. Our tax code is purposely convoluted and complicated so that people can't easily figure out the impacts.
For married couples filing jointly, the top bracket (7.85%) will kick-in at $102,030 vs $131,970-- look for the MN DFL to follow up soon with a new tier and higher rate on top of this change. It was 9.6% that passed through the MN Senate in 2007- will they bill bold enough to propose the same?