The Homa Files

Since I think Simpson-Bowles will be the template for the fiscal cliff resolution, I’ve been thinking about its provisions … starting with taxes (of course).

• For more on Simpson-Bowles and a link to their report see
  Taxes: Simpson-Bowles … be careful what you wish for, because you might get it.

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State & Local Taxes

Currently, income tax payers who itemize are allowed to deduct state & local taxes.

Primarily, that includes state & local income taxes and local real estate taxes.

I benefit from both.

Still, I side with with Simpson-Bowles on this one.

My basic logic: Why should Federal income tax payers is relatively low tax & spend states (think FL, TX) be forced to subsidize folks in high tax & spend states (think CA, NY, NJ, MD, DC).

If a goal of tax reform is fairness … that’s not fair!

So, I say: eliminate the deduction for state & local taxes.

What do you say?

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This entry was posted on November 15, 2012 at 1:01 pm and is filed under Tax deductions, Tax Loopholes, Tax reform, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.