CNBC reported yesterday that the Congress is looking at changes to the tax code which include two interesting items:
Removing the limits on itemized deductions
Eliminating the phase-out of the personal exemption for high-income earners
Both of the provisions being reconsidered were a way that legislators "soaked the rich" without having to take the political pain of raising marginal rates.
No matter how I look at it, there is no justification for saying that rich people's deductions don't count or that they don't deserve the same personal deduction as anyone else.
CNBC reports that 97% of the benefit of these changes goes to people who make over $200,000 per year. I say hooray to that. The top 1% of taxpayers, with incomes over about $300,000 already pay about 35% of total income taxes. The top 5%, with incomes over about $130,000, pay well over half of all federal income taxes.
Our "graduated" income tax system, though less graduated than some other places, is still far too close to socialism for my taste. Every step we take toward a flatter tax system, even if a tiny step as these would be, is a step in the right direction.