Posted on 12/05/2004 6:24:15 AM PST by John Jorsett
WASHINGTON — As President Bush lays the groundwork for a possible overhaul of the U.S. tax code, one option under consideration would deal its biggest financial blow to citizens of blue states such as California and New York.
Some conservative activists are urging the Bush administration to scrap the federal deduction for state and local taxes as part of a broader plan to revamp the nation's tax system.
Although the proposal would hurt some taxpayers in nearly every state, it would hit hardest in states with higher-than-average income levels and bigger-than-average state and local tax burdens. High on the list are a number of blue states — those that were carried by Democrat Sen. John F. Kerry in last month's presidential election.
Taxpayers in California and New York, for example, which have top state income tax rates of 9.3% and 6.5% respectively, would be highly affected; residents of Florida and Texas, which have no state income taxes, much less so.
"There's no question this effort would punish blue states," said Rep. Robert T. Matsui (D-Sacramento), a member of the tax-writing House Ways and Means Committee. Over time, he said, it could force state and local governments to cut expenditures.
(Excerpt) Read more at latimes.com ...
Reward your friends and punish your enemies. Its about time Blue State folks were put on a diet.
Being from a state that has no income tax, that is an excellent idea.
I have a better idea- scrap the code entirely and replace it with something a lot simpler and less intrusive.
""There's no question this effort would punish blue states," said Rep. Robert T. Matsui (D-Sacramento), a member of the tax-writing House Ways and Means Committee. Over time, he said, it could force state and local governments to cut expenditures.""
And this would be a bad thing how?
Wait! I'm a republican living in NYC because I *have* to for school! But, I'd be willing to take one for the team if it gives them a taste of their own medicine! ;-D
Like here in California. Red State voters are sick and tired of bailing out libs' excesses. The sooner they cut taxes AND expenditures here, the better off we will all be.
Holy cow, I didn't know you -could- deduct state/local taxes from federal taxes.
Hey, it's the blue states that -want- higher federal taxes, I say let 'em pay their share, rather than enacting high local taxes so they can keep their money closer to home.
Qwinn
Same here. I'd be willing to bite the bullet. It'd be worth it to punish the socialists.
I see a common theme lately. Republicans are looking for ways to raise taxes.
If Blue States need more revenue, they should raise taxes. Speaking of raising taxes, the L.A Democrats here are competing to see who can raise the city sales tax to provide funds for law enforcement. So much for Jill Stewart's myth about local Democrats being prudent with taxpayer dollars.
As long as libs are the ones paying them. So why isn't Robert Matsui happy? You think they would be welcoming the development. Like it would pinch John F*ckin' and Trust Fund libs a lot.
Pass.
We will need a regime change in Sacramento to accomplish this.
As the articles indicate, state sales taxes were deductible until 1986 and provided some measure of equitability to states like Florida with a sales tax but no local income tax. In 1986, the elimination of the sales tax deduction meant that Florida taxpayers were subsidizing the high-tax (and inefficient) northern states.
IMHO, all deductibility should be eliminated and we should go to a flat-tax Federal system. Let the states tax away at their own peril. I am strongly opposed to a National Sales Tax which will end up with more loopholes than the current system. I mean special ear marks, sliding scales depending upon the item purchased, etc., as the gubermint tries to manage your buying habits through the tax code. But that's another article.
Move to a different tax saving strategy. You have a tax preparer don't you?
Well, I could move, I guess.
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