It’s not a move to the right when you eliminate tax deductions that people have built their cash flow budgets upon.
I can guarantee you if they eliminated mortgage interest deductions while lowering the tax rate, you will find that the people who get screwed the hardest (net tax dollars) are the ones who itemize.
All you need to do is look at the rule changes each year and you will see that they are trying to make itemization less and less viable. The standard deduction (right wording??) for non-itemizers has gotten to the point where I’m willing to bet many homeowners are better off not itemizing.
What they need to do is kill all the tax “credits” and standard deduction (which make it “fair” for non itemizers). Then lower rates accordingly.
Anything they are doing where they claim deductions are a “cost” shows that they will screw taxpayers eventually.
Longterm and overall, lowering marginal rates are better for the economy than itemizing. We can’t have it both ways. This is essentially the flat tax debate.
The only caution I would add is once those deductions are gone and THEN they raise the rates... but that’s not going to happen with a Republican House.
It’s all academic anyway. Personally, I don’t believe Obama will go through with this. If he did, he would show he has some political survival skills in place, but this would probably kill him on the inside to have sign such a bill into law...
...and no one has really said what that top rate would be. I think anything higher than 25 - 28% should be a non-starter for Republicans.
The trick. Eliminate deductions with a lower rate...then raise the rate. Do not fall for it.