For income tax purposes, why not consider all income as income, and after 250k in income no deductions re allowed?

Similar questions: income tax purposes 250k deductions allowed.

It is a good idea, but here is part of the problem. It is not just a cut and dry matter to eliminate deductions for anyone over $250,000 because it is too easy to change what is income and what isn't. For example, the tax code says Municipal bonds are income tax free.

This means I could change some of my income from dividends and interest to Municipal Bond income. So I could if I wanted to, just change $25,000 of my $250,000 from ordinary income to tax free income. This is not a deduction.It is changing the type of income.

Now my taxable income is $225,000. So now you would have to change all the rules on how Municipal bond income is taxed. Or, I could elect to receive income in 2012 instead of 2011.

This would lower my taxable income for 2011. The tax code needs to be changed on what is income, what is a deduction, what is included, what is excluded.It is not just a matter of controlling the deductions, it is a matter of defining what is considered income and how it is treated for tax purposes.

I agree - I wasn't suggesting that would be the only change. Schelli 21 days ago .

I agree there would have to be other changes. But, while people making over $250,000 could be the focus of tax adjustments, you have to make sure one action does not start a domino effect. For example, if you eliminate the mortgage interest deduction for people making over $250,000, those people may decided to buy less expensive houses since they have no incentive to buy a more expensive one.

Now the housing industry may be impacted by causing larger homes to be less desirable. This in turn causes builders to do less construction, meaning less workers needed, etc. , and less taxes paid by those workers. Or, if you change the way Municipal bond interest is treated for those making over $250,000 then less Municipal bonds will be sold, states will have less revenue for construction projects, and then would have to raise taxes in order to build municipal projects.

Since taxing those in the lower income bracket is not the right move, the states are looking to raise the gas tax. In Maryland, for example, they are proposing adding a 16 cent a gallon tax to gasoline. They say they need the money for bridge and road repair.

They just doubled the toll on the Chesapeake bay bridge. This means, no matter what tax bracket you are in, you will have to pay the tax if you want to drive.So if we eliminate deductions for those making over $250,000, and that leads to a different way the wealthy spend money, the states will increase taxes in other areas to make up the shortfall, and then everybody would have to pay, even those who really can't afford it. It is a real tricky situation.

I understand what you're trying to say, but I don't think there are that many McMansions that won't be built that will cause the economy any damage. I doubt the wealthy will change their spending habits, and it doesn't matter if they do, as long as we (the country through taxes) get our cut. Schelli 20 days ago .

Paranormal beat me to the punch. I was going to say sort of the same thing. It depends on what part of the US you live in to determine the definition of wealthy.

We can see the impact of of higher income spending being reduced. And if the wealthy are spending money, they are not spending enough to generate enough sales tax to cover the state expenses. We sure aren't getting increased spending from the lower and middle class.

That is why gas tax and tolls are being increased. Other revenue is down.

Because the people that create the policy all make over 250k.

I could go fo rthat, but wonder what the effects will be to charity and other donations.

A rose by any name may smell just as sweet. Money for those who needs it is encouraged by tax deductions. Local people know best who really is in need and it is in our benefit to let this happen at a local level.In my opinion, of course.

You aren't going to hear me complain about that. Schelli 21 days ago .

I have never said poor people shouldn't pay taxes for the services they need, but the people who can afford it should pay more - that's a no brainer. Schelli 21 days ago .

You're in a Catch-22. Some will continue to donate, but not everyone. Especially when they are being penalized for having money and they see their tax dollars wasted.

Charities are just that, charities - if the only reason they are getting money is because it means a tax deduction, then they shouldn't be in business, or we'll see the real "humainity" of the people who donate. I see my tax dollars wasted too - about a trillion a year for the DOD - but I have to pay taxes - so should they. And, when I give money to charity, yes, I deduct it on my taxes, but even if I couldn't I'd still donate because it's the right thing to do.

But, I already know I am a better person than the 15ers. Schelli 21 days ago .

Because that might risk requiring the 1% to pay their fair share.

Well, yes, but that's not how half our government works.

Good question. Of course you'll hear that the wealthiest already pay most of the taxes, which is tantamount to saying that only those who own shoes wear shoes. (Duh!) .

That little tidbit is such a twisted bit of information, and misused so much. Yes, a person making 100 million a year and paying 15% is going to pay more that 200 people making 50k a year and paying 20%, but it doesn't wash. Schelli 20 days ago .

You may not think there are that many McMansions, but what is that definition. In my area, 50% of all homes being built are over $500,000. These are not McMansions, they are the cost of homes in the Maryland, Virginia, DC area.

Most of my clients are two income earners, and own these homes. The sale of these $500,000 homes are down because people are not making the commitment for fear of losing the interest deduction. This in turn means they buy a smaller home.

The tax collected for county services and schools then goes down because these taxes are collected on appraised property values. More tax is paid on a higher priced home than a less expensive home. In my area $250,000 is not wealthy.

$750,000 is more like it. I have two teacher clients each making $125,000. They are tenured teachers and with four children they do not consider themselves wealthy.

Any time you take away a deduction, it does impact the economy in some areas.

" "im a freight conductor that is away from home days at a time. What deductions am I allowed to file? " "my daughter is in foster care, I pay 59% am I allowed to file her on my income taxes" "how much would raising taxes by 2% on those earling over $250K raise.

" "What taxes are high in places like Texas, Washington, and Florida, to make up for the fact that there is no income tax?" "Contract workers: What expenses can be deducted from income for tax purposes? " "Do you want to see what your taxes will be if the Bush Tax Cuts are allowed to expire? " "Besides taxes, how does the government earn income?

If I own real estate under an LLC, do I get the same tax deductions on my yearly taxes.

Im a freight conductor that is away from home days at a time. What deductions am I allowed to file?

My daughter is in foster care, I pay 59% am I allowed to file her on my income taxes.

How much would raising taxes by 2% on those earling over $250K raise.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.