Repair-It

http://www.ajc.com/ap/ap/top-news/boehn ... 014/ndctt/

Well this is interesting, no? I'd like to see it evaluated on a national level (CBO?) but I believe it would be good for my household. Actually, the end of the article answers that question:

The plan is designed to raise about the same amount of tax revenue as the current system, though the overhauled system would be much simpler.

In summary, a bunch of tax credits would close:
- "Repeal deductions for state and local taxes, medical expenses and moving expenses"
- "Tax credits for child care, adoption services and energy-efficient upgrades to homes would be gone"
- "The mortgage interest deduction would be reduced for people buying houses costing more than $500,000"
- "The deduction for charitable giving would be limited to contributions that exceed 2 percent of a taxpayer's income"

The deal:

In exchange, income tax rates would be cut and the standard deduction, which is used by most taxpayers, would be nearly doubled. The child tax credit would be increased and a complicated series of tax breaks for education expenses would be consolidated and simplified.

Aside from the income tax drop, the itemized deduction doubling is interesting.

The top income tax rate would drop from 39.6 percent to 25 percent, but the plan would impose a new 10 percent surtax on income above $400,000 for individuals and $450,000 for married couples. The top corporate income tax rate would fall from 35 percent to 25 percent.

The plan would increase the standard deduction from $12,400 to $22,000 for married couples, essentially exempting families that make less from paying federal income taxes. The child tax credit would be increased from $1,000 to $1,500.

The plan is designed to encourage more taxpayers to take the simpler standard deduction rather than itemizing. As a result, 95 percent of filers would take the standard deduction rather than itemize, according to analysis by the nonpartisan Joint Committee on Taxation. Currently, about one-third of filers itemize their deductions.

Simplify the tax code? Yes please. I like this, overall, I think. My itemized deductions have never topped $21k and have fallen continuously as I pay down my mortgage (less interest to deduct). So I'd definitely be on the standard deduction, which would simplify the tax return process, nevermind the bigger tax refund and/or more take-home pay.

I am all about a simpler tax system but some of this seems weird.

"Repeal deductions for state and local taxes, medical expenses and moving expenses"
So you would be taxed RI tax and Fed tax of full. Probably not a big deal, but sounds like getting double taxed. (I know that that happens all the time, I don't have to like it though...)

Also, don't get me started on taxes on medical bills...

I don't see why you can even write off moving.

- "Tax credits for child care, adoption services and energy-efficient upgrades to homes would be gone"
Ok, so it is stupid to pick and choose what things get taxed and what doesn't, a free market should mean everything is equal. I guess I am ok with this.

The child care thing is almost one for one. no tax credit on child care, which I think the most you can write off in 5k, but you get an extra 1k per child credit. The write off probably only gets you back 1200.

- "The mortgage interest deduction would be reduced for people buying houses costing more than $500,000"
I agree here. Because my house is way less, but free market...
- "The deduction for charitable giving would be limited to contributions that exceed 2 percent of a taxpayer's income"
Ok cool. Maybe this will encourage more charity, or reduce... Or stop fake donations being written off...