Yep, they're all about lower taxes.....

A tax reform proposal agreed upon Tuesday by President Bush's advisory
panel would eliminate the federal deduction for state and local taxes
and sharply limit the tax break for home mortgage interest.

That's leading some Democrats in California and New York to assail it
as an attack on the blue states -- the ones that voted Democratic in
the 2004 presidential election -- which tend to have higher taxes and
housing costs.

"The Bush panel's recommendations are a double-barreled blast aimed
squarely at California and the middle class," state Treasurer Phil
Angelides said in a press release. "These recommendations are good for
Texas, but bad for California."

Sen. Charles Schumer, D-N.Y., called it a pernicious proposal and a
"dagger to the heart of the people of New York."

The bipartisan panel, appointed by Bush early this year, was asked to
identify ways to simplify federal tax laws and redistribute the
"burdens and benefits" of federal tax "in an appropriately progressive
manner while recognizing the importance of homeownership and charity."
Its proposals, on balance, are supposed to neither raise nor lower
federal tax revenue.

Most observers think the proposal has little chance of adoption because
of the broad range of interest groups -- not to mention political
sacred cows -- it would threaten. Still, the plan is expected to spark
a far-reaching debate on tax reform.

The plan, which the panel plans to finish up next week, would simplify
taxes for the about one-third of taxpayers who itemize deductions -- by
eliminating them. Schedule A, the IRS form used to itemize deductions,
would go bye-bye along with many other tax-return forms.

The deduction for interest on a home mortgage, the biggest write-off
for many taxpayers, would be eliminated and replaced with a tax credit.


Under current law, taxpayers who itemize deductions can deduct interest
on up to $1 million in mortgage debt. The interest can be on one or two
homes as long as it doesn't total more than $1 million.

A deduction reduces income before taxes are calculated. The higher your
tax rate, the bigger the benefit.

A tax credit, by comparison, reduces your final tax bill dollar for
dollar, regardless of income.

The proposal calls for replacing the mortgage-interest deduction with a
tax credit equal to 15 percent of the interest paid on one home. The
credit could be claimed even by those who do not itemize deductions
today.

The credit would apply only to interest on mortgages up to the limit
for loans guaranteed by the Federal Housing Administration.

The FHA limit varies by region, but in most parts of California, it is
$312,895. That is well below the median price of a home in California
($568,000) and less than half of the median price of a Bay Area home.

In many parts of the country, the FHA limit is above the median home
price. The average FHA limit nationwide is $265,000.

The plan "would be devastating for states like California where real
estate values have skyrocketed and affordability is at its lowest
levels," said Sen. Dianne Feinstein, D-Calif.

The proposal would eliminate any tax break for interest paid on a
second home or a home equity loan or line of credit.

Under the proposal, the first $600,000 of profit from the sale of a
primary residence would be tax-free for married couples filing jointly.
That amount would be indexed to inflation. Any profit over that amount
would be taxed as ordinary income.

Under current law, couples can exclude up to $500,000 in profit from
the sale of a home, but anything over that is taxed at the lower
capital gains rate.

Jerry Howard, chief executive of the National Association of Home
Builders, said the plan, if enacted by Congress, would "put an
immediate chill on the housing markets and reverse almost a century of
housing policy."

On the plus side for blue states, the proposal also calls for
eliminating the alternative minimum tax, a separate, mind-boggling
system that raises taxes for a small but rapidly growing number of
middle- and upper-middle-income taxpayers. It could affect 30 million
Americans in 2010, up from 2 million in 2002.

The way most people fall into the alternative minimum tax is by
claiming large deductions for state and local taxes, said Clint
Stretch, director of tax policy with the accounting firm Deloitte &
Touche.

On a per-capita basis, the states with the most people paying
alternative minimum tax are New Jersey, New York, Connecticut,
California, Massachusetts and Maryland. All are blue states.

Repealing the alternative minimum tax would reduce taxes for many
Americans, but eliminating the deduction for state and local taxes
would raise them for many more.

Whether individuals would be better or worse off overall depends on
their personal situation and other aspects of the tax plan.

"The political problem is that a lot of the people who will benefit
from the AMT being repealed don't know they have the problem yet,"
Stretch said.

The proposal also would reduce the number of federal tax brackets.
Today, there are six, ranging from 10 to 35 percent. Under the
proposal, there would be four, ranging from 15 to 33 percent.

The panel endorsed two plans for taxing capital gains from investments.


Stretch said the tax panel was trying to simplify taxes without
shifting the burden rich to poor, from poor to rich or from state to
state.

Ideally, the tax burden paid by the top 20 percent, the next 20 percent
and so on would be the same before and after reform. But even if that
happens, there could be big tax-burden shifts within those groups, and
an individual's taxes could change dramatically based on whether they
own a home, what kind of investments they have and other factors.

"This is a very complicated puzzle to try to piece together," Stretch
said.

So much for tax simplification

wrote:
Yep, they're all about lower taxes.....


Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families, but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)also fall into a group that gnashes and wails at the very
thought of
any public assistance for low income renters. In reality, the mortgage
interest deduction is probably safe- can you say "Catastrophic real
estate crash", otherwise? It might be reasonable to phase out the
mortgage interest deduction over a period of time, eliminating it
entirely for mortgages dated after XX/XX/XX.

It is long past time for a bi-partisan effort to reduce spending and/or
raise taxes to restore some fiscal credibilty to our runaway
spendthrift FEDGOV.

wrote in message
ups.com...
Yep, they're all about lower taxes.....

A tax reform proposal agreed upon Tuesday by President Bush's advisory
panel would eliminate the federal deduction for state and local taxes
and sharply limit the tax break for home mortgage interest.

I seriously doubt that Bush would accept any proposal that included reducing
or eliminating the home mortgage deduction. this is out of a bipartisan
advisory panel.



That's leading some Democrats in California and New York to assail it
as an attack on the blue states -- the ones that voted Democratic in
the 2004 presidential election -- which tend to have higher taxes and
housing costs.

There were Democrats sitting on the panel too.


"The Bush panel's recommendations are a double-barreled blast aimed
squarely at California and the middle class," state Treasurer Phil
Angelides said in a press release. "These recommendations are good for
Texas, but bad for California."

Sen. Charles Schumer, D-N.Y., called it a pernicious proposal and a
"dagger to the heart of the people of New York."

The bipartisan panel, appointed by Bush early this year, was asked to
identify ways to simplify federal tax laws and redistribute the
"burdens and benefits" of federal tax "in an appropriately progressive
manner while recognizing the importance of homeownership and charity."
Its proposals, on balance, are supposed to neither raise nor lower
federal tax revenue.

Most observers think the proposal has little chance of adoption because
of the broad range of interest groups -- not to mention political
sacred cows -- it would threaten. Still, the plan is expected to spark
a far-reaching debate on tax reform.

The plan, which the panel plans to finish up next week, would simplify
taxes for the about one-third of taxpayers who itemize deductions -- by
eliminating them. Schedule A, the IRS form used to itemize deductions,
would go bye-bye along with many other tax-return forms.

The deduction for interest on a home mortgage, the biggest write-off
for many taxpayers, would be eliminated and replaced with a tax credit.


Under current law, taxpayers who itemize deductions can deduct interest
on up to $1 million in mortgage debt. The interest can be on one or two
homes as long as it doesn't total more than $1 million.

A deduction reduces income before taxes are calculated. The higher your
tax rate, the bigger the benefit.

A tax credit, by comparison, reduces your final tax bill dollar for
dollar, regardless of income.

The proposal calls for replacing the mortgage-interest deduction with a
tax credit equal to 15 percent of the interest paid on one home.

This would hurt me pretty badly. Currently, I get about $15,000 in tax
savings due to the deductibility of my home mortgage. I figure that I'd end
up paying an additional $8000 in taxes each year if they limit the credit to
15% of interest paid on my home.

I'm all for eliminating the home mortgage deduction...BUT only if they first
lower my marginal rate, and create a flat tax across the board for all
income levels.

wrote in message
ups.com...

wrote:
Yep, they're all about lower taxes.....


Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families, but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)

A tax cut isn't a subsidy!


also fall into a group that gnashes and wails at the very
thought of
any public assistance for low income renters. In reality, the mortgage
interest deduction is probably safe- can you say "Catastrophic real
estate crash", otherwise? It might be reasonable to phase out the
mortgage interest deduction over a period of time, eliminating it
entirely for mortgages dated after XX/XX/XX.

It is long past time for a bi-partisan effort to reduce spending and/or
raise taxes to restore some fiscal credibilty to our runaway
spendthrift FEDGOV.

I'd support the elimination of itemized deductions...BUT only if they went
to a flat tax across all income levels.

"OlBlueEyes" wrote in message
...
wrote in
ups.com:


wrote:
Yep, they're all about lower taxes.....


Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Uh... who brought it DOWN from 15 to 10 in the first place?

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families

In other words, people who don't itemize? The tax credit proposal is a
TAX CUT for those folks.

but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)

Eliminating the deduction for $1mm houses isn't going to make those houses
disappear. It's going to make the owners of those houses fire the maids
and gardeners whose salaries they were paying with their mortgage
deductions.

LOL. You really have a warped sense of reality. I have a $960,000 mortgage.
I pay $46,145 in interest each year. The deductibility of my home mortgage
saves me roughly $15,000 in taxes every year. Under the new proposal, I'd
only save $6,000...which means it's an $8000 tax increase. I don't have
maids nor gardners. Since my personal budget was set up before this
ridiculous idea started floating around, I also don't have an extra $8k
laying around each year. So I have to cut expenses somewhere (either around
my house, or at work). Since I'm self-employed, the easiest way to cut
expenses is to make some cuts at my business (ie--employee benefits,
salaries, etc)

The funny thing about supply side (trickle down) economics is that it also
works in reverse. Raise taxes, and the economy and jobs picture suffer.




In reality, the mortgage
interest deduction is probably safe- can you say "Catastrophic real
estate crash", otherwise?

The dirty little secret of housing boom is that it has sent property taxes
soaring without local governments having to enact tax rate increases.

That doesn't help things in Florida because of Save Our Homes (tax increases
capped at 3% per year)

"Harry Krause" wrote in message
...
NOYB wrote:
wrote in message
ups.com...
wrote:
Yep, they're all about lower taxes.....

Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families, but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)

A tax cut isn't a subsidy!


also fall into a group that gnashes and wails at the very
thought of
any public assistance for low income renters. In reality, the mortgage
interest deduction is probably safe- can you say "Catastrophic real
estate crash", otherwise? It might be reasonable to phase out the
mortgage interest deduction over a period of time, eliminating it
entirely for mortgages dated after XX/XX/XX.

It is long past time for a bi-partisan effort to reduce spending and/or
raise taxes to restore some fiscal credibilty to our runaway
spendthrift FEDGOV.

I'd support the elimination of itemized deductions...BUT only if they
went to a flat tax across all income levels.





I'd make all income taxable at the current rates



, and increase exemptions for families earning under $50,000, and, of
course, I'd cut b ack drastically on corporate tax breaks. But I would
offer incentives for those corporations building new factories and
facilities in the USA.


So would you cut back the deductibility of home mortgages as proposed?

"NOYB" wrote in message
link.net...

wrote in message
ups.com...
Yep, they're all about lower taxes.....

A tax reform proposal agreed upon Tuesday by President Bush's advisory
panel would eliminate the federal deduction for state and local taxes
and sharply limit the tax break for home mortgage interest.

I seriously doubt that Bush would accept any proposal that included
reducing
or eliminating the home mortgage deduction. this is out of a bipartisan
advisory panel.

Hell, they didn;t even follow his executive order.........eliminating the
incentive of home ownership certainly is not "recognizing the importance of
homeownership" Sounds like the panel was hijacked.

http://www.taxreformpanel.gov/executive-order.shtml
Executive Order: President's Advisory Panel on Federal Tax Reform
By the authority vested in me as President by the Constitution and the laws
of the United States of America, and to assist in reforming the Federal
Internal Revenue Code to benefit all Americans, it is hereby ordered as
follows:

Section 1. Establishment. There is established the President's Advisory
Panel on Federal Tax Reform (Advisory Panel).

Sec. 2. Membership. (a) The Advisory Panel shall be composed of up to nine
members appointed by the President. (b) The President shall designate one
member of the Advisory Panel to serve as Chair and one member to serve as
Vice Chair.

Sec. 3. Purpose. The purpose of the Advisory Panel shall be to submit to the
Secretary of the Treasury in accordance with this order a report with
revenue neutral policy options for reforming the Federal Internal Revenue
Code. These options should:

(a) simplify Federal tax laws to reduce the costs and administrative burdens
of compliance with such laws; (b) share the burdens and benefits of the
Federal tax structure in an appropriately progressive manner while
recognizing the importance of homeownership and charity in American society;
and (c) promote long-run economic growth and job creation, and better
encourage work effort, saving, and investment, so as to strengthen the
competitiveness of the United States in the global marketplace.

At least one option submitted by the Advisory Panel should use the Federal
income tax as the base for its recommended reforms."





That's leading some Democrats in California and New York to assail it
as an attack on the blue states -- the ones that voted Democratic in
the 2004 presidential election -- which tend to have higher taxes and
housing costs.

There were Democrats sitting on the panel too.


"The Bush panel's recommendations are a double-barreled blast aimed
squarely at California and the middle class," state Treasurer Phil
Angelides said in a press release. "These recommendations are good for
Texas, but bad for California."

Sen. Charles Schumer, D-N.Y., called it a pernicious proposal and a
"dagger to the heart of the people of New York."

The bipartisan panel, appointed by Bush early this year, was asked to
identify ways to simplify federal tax laws and redistribute the
"burdens and benefits" of federal tax "in an appropriately progressive
manner while recognizing the importance of homeownership and charity."
Its proposals, on balance, are supposed to neither raise nor lower
federal tax revenue.

Most observers think the proposal has little chance of adoption because
of the broad range of interest groups -- not to mention political
sacred cows -- it would threaten. Still, the plan is expected to spark
a far-reaching debate on tax reform.

The plan, which the panel plans to finish up next week, would simplify
taxes for the about one-third of taxpayers who itemize deductions -- by
eliminating them. Schedule A, the IRS form used to itemize deductions,
would go bye-bye along with many other tax-return forms.

The deduction for interest on a home mortgage, the biggest write-off
for many taxpayers, would be eliminated and replaced with a tax credit.


Under current law, taxpayers who itemize deductions can deduct interest
on up to $1 million in mortgage debt. The interest can be on one or two
homes as long as it doesn't total more than $1 million.

A deduction reduces income before taxes are calculated. The higher your
tax rate, the bigger the benefit.

A tax credit, by comparison, reduces your final tax bill dollar for
dollar, regardless of income.

The proposal calls for replacing the mortgage-interest deduction with a
tax credit equal to 15 percent of the interest paid on one home.

This would hurt me pretty badly. Currently, I get about $15,000 in tax
savings due to the deductibility of my home mortgage. I figure that I'd
end
up paying an additional $8000 in taxes each year if they limit the credit
to
15% of interest paid on my home.

I'm all for eliminating the home mortgage deduction...BUT only if they
first
lower my marginal rate, and create a flat tax across the board for all
income levels.

"NOYB" wrote in message
hlink.net...

wrote in message
ups.com...

wrote:
Yep, they're all about lower taxes.....


Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families, but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)

A tax cut isn't a subsidy!


also fall into a group that gnashes and wails at the very
thought of
any public assistance for low income renters. In reality, the mortgage
interest deduction is probably safe- can you say "Catastrophic real
estate crash", otherwise? It might be reasonable to phase out the
mortgage interest deduction over a period of time, eliminating it
entirely for mortgages dated after XX/XX/XX.

It is long past time for a bi-partisan effort to reduce spending and/or
raise taxes to restore some fiscal credibilty to our runaway
spendthrift FEDGOV.

I'd support the elimination of itemized deductions...BUT only if they went
to a flat tax across all income levels.

Agreed

wrote in message
ups.com...

wrote:
Yep, they're all about lower taxes.....


Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families, but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)also fall into a group that gnashes and wails at the very
thought of
any public assistance for low income renters.

Do you claim a deduction on your home mortgage interest Chuck? If you
really believe what you said you would not. You need to set an example for
the rest of us. ;-)

Harry,
Do you ever get frustrated that you have all of these ideas and no one
really cares what you want to do?


"Harry Krause" wrote in message
...
NOYB wrote:
wrote in message
ups.com...
wrote:
Yep, they're all about lower taxes.....

Notice the 50% increase in the tax rate for the folks on the bottom end
of the scale? (Increases from 10% to 15%).

Mortgage deduction: Too bad it can't be saved for inexpensive "starter"
homes purchased by young families, but a good percentage of folks who
are
allowing the government to subsidize their personal housing expense (by
enabling them to pay interest on $1mm mortgages with tax-free
dollars)

A tax cut isn't a subsidy!


also fall into a group that gnashes and wails at the very
thought of
any public assistance for low income renters. In reality, the mortgage
interest deduction is probably safe- can you say "Catastrophic real
estate crash", otherwise? It might be reasonable to phase out the
mortgage interest deduction over a period of time, eliminating it
entirely for mortgages dated after XX/XX/XX.

It is long past time for a bi-partisan effort to reduce spending and/or
raise taxes to restore some fiscal credibilty to our runaway
spendthrift FEDGOV.

I'd support the elimination of itemized deductions...BUT only if they
went to a flat tax across all income levels.





I'd make all income taxable at the current rates, and increase exemptions
for families earning under $50,000, and, of course, I'd cut b ack
drastically on corporate tax breaks. But I would offer incentives for
those corporations building new factories and facilities in the USA.