Thursday, November 18, 2004

Atrios's reaction -- "Holy crap" -- is exactly right in reference to today's Washington Post article on Bush's plans for the tax code:

...the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps ....

The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said.

Atrios says, "bye bye health insurance for a hell of a lot of people," which is exactly right. If this takes hold, a few decades from now employer-paid health insurance will be a quaint relic, like trade unions now. Those whose employers still pay for their insurance will be seen as the privileged, cosseted few, like union workers now.

And as for who will make up the shortfall in the wake of the tax cuts, Max Sawicky is not off base when he calls the elimination of the income-tax and property-tax deductions a

Bush blue-state tax ... a special tax on residents of New York, California, Connecticut, Massachusetts, and other states whose electoral votes went to John Kerry.

These are states with income taxes, and often with high property taxes; many taxpayers rely on the federal deduction of these taxes to stay solvent. Yes, the Post says the Bushies want to eliminate the Alternative Minimum Tax; not having to pay the AMT will compensate some taxpayers for the loss of the tax deductions, but it won't compensate all of them -- many middle-class and just-above-middle-class taxpayers use the income- and property-tax deductions, but don't pay the AMT. Essentially, if you're at the low end of "more or less comfortable" in certain states, this is going to be a tax hike. In Bush's "ownership society," the result really might be a decrease in the number of homeowners.

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