Tax The Rich, But Not Our Rich

The Scrivener surveys the odd politics surrounding the possible elimination of the Federal deduction for state and local taxes - now it is Dems, with a boost from the NY Times, defending tax breaks for the rich.

I was skeptical about the political viability of eliminating this deduction last December.  I will just add two thoughts:

(1) if this deduction is really threatened, real estate owners need to sell (highly taxed) Manhattan and buy (less highly taxed) Connecticut.

(2) As presented by the Times, the deduction for property tax would also go.  But doesn't a big chunk of that typically fund local schools?  Dem defense gambit - this proposal is anti-education!  And no, Dems, don't get hooked on the free advice - I am a very unreliable source.

(3) Both the WaPo and the Times tell us that tax reform won't happen until 2006.  Well, the Times is not quite that clear - in an article devoted to budget shenanigans at the House of Games [and shouldn't the Times website include a laughtrack?  Bring on the multimedia!], we are informed that "that [tax reform] plan will not be ready until late in 2005 and possibly not until 2006".

UPDATE:  Uhh, isn't that three ideas, not two?  No more fuzzy math, I'm working on the budget.

Comments

[Patrick R. Sullivan]

And the Times also just called for increases in the size of the army and Marine Corps. Guess they want to pay for it by cutting spending elsewhere.

[Ken Houghton]

We can easily pay for more troops by cutting back the budget for the MDI (i.e., stretch it out over more years, since it's well behind schedule as is). The Pentagon picked out several programmes a few days ago that would more than compensate for the needed troops.

Apparently, Scrivener believes that not being able to pay to build and maintain infrastructure is a good thing.

And you need to look at the costs of living in Connecticut, which for many years inflated the costs of its services to compensate for lack of a state income tax. (Now that it has a tax, we can wait patiently for reduction in those costs. Be VERY patient, using the CA tuition/fees precedent while forming your expectations.)

[Jim Glass]

Oh, *if only* New York's politicians spent the money that runs through their hands on infrastructure.

[Neo]

On the topic of attacking tax breaks for the selective rich, does anyone know if the tax break that gives celebrities (i.e. movie stars and jocks) an exemption from the $1 million a year CEO tax still exists ?
It was fodder during Clinton first term.

[Jor]

Local and state taxes shouldn't be deducted from your income before paying federal taxes --- this is controversial? Even the communists at reason admit they don't want to live in the free-market third-world paradise that is Alabama. All we are doing is yet AGAIN, is trying to steal more money from states that actually make money and give it to welfare queens in Kentucky. And of course, no discussion of "our rich" and "there rich" would be complete, w/o looking at 2004 exit polls by income, and looking at the richs' voting patterns in blue and red states.

[LEARN TO PLAY POKER]

So now it comes to this... penalizing those who achieve. The idea of build a successful business and (ideally) live the good life IS the American dream. No thanks. What incentive do achievers have if giant hands will be stabbing constantly down their pockets? These are the people who make it ('it' = anything) happen, the ones who hire (employees and lobbyists) and make the economy run. Alienating them will lead to an outgoing brain-drain, inasmuch as our standard of living created a brain drain for much of the 20th century on the rest of the world.

[bride]

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