Limiting Tax Deductions: The Reality of the Math
In his Budget, the President proposes to raise $1. 56 trillion in revenue from high-income households, including $1 trillion from the expiration of the Bush high-income and estate tax cuts and additional revenue from limiting tax expenditures for high-income households as a part of reforming the tax system to make it simpler, fairer and more efficient. Some have suggested that limits on high-income tax expenditures could substitute for rate increases and that it would be possible to raise $1 trillion or more while keeping the top income tax rate at 35 percent. But a careful look at the math of these types of caps and limits shows that, once one takes into account the reality of their impact on middle-class families and on charitable donations, plausible limits raise only a fraction of the $1 trillion or more some have suggested.
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itemized deductions tax expenditure tax deductions income tax total revenue Tax Policy Center tax cuts Congressional Budget Office tax incentive tax reform middle-class local tax tax system taxes the cap Bottom line cliff show policy immense simpler taxpayers deficit donations math Accounting rates large The loss the example the bush the president The needPeople:
Bush
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Organization: Tax Policy Center
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Organization: Congressional Budget Office
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Organization: Treasury
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FieldTerminology: estate tax
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In his Budget, the President proposes to raise $1.56 trillion in revenue from high-income households, including $1 trillion from the expiration of the Bush high-income and estate tax cuts and additional revenue from limiting tax expenditures for high-income households as a part of reforming the tax system to make it simpler, fairer and more efficient. Some have suggested that limits on high-income tax expenditures could substitute for rate increases and that it would be possible to raise $1 trillion or more while keeping the top income tax rate at 35 percent. But a careful look at the math of these types of caps and limits shows that, once one takes into account the reality of their impact on middle-class families and on charitable donations, plausible limits raise only a fraction of the $1 trillion or more some have suggested.Consider the example of a $25,000 cap on itemized deductions, which some claim would raise in the range of $1 trillion or more from high-income households:read more
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Limiting Tax Deductions: The Reality of the Math
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