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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The Homa Files 
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