Wednesday, October 19, 2005

Feds To NYers: "No Deduction for Property Taxes"

Proposal To Eliminate Deduction For Property Taxes Under Consideration In D.C.

If skyrocketing property taxes on Long Island weren't enough to give you nightmares, just wait. A government panel, appointed by President Bush, is expected to issue a report next month recommending changes to the Internal Revenue Code, including the ELIMINATION of the tax deduction for PROPERTY TAXES, and a limit on the home mortgage amount for which a deduction may be claimed.

Yes, take another look at that School Property Tax bill you recently received in the mail. As the law stands today, you can take the full amount of that tax, as well as County, Town and Village property taxes, as itemized deductions, somewhat easing the blow, and the tax burden. If the President and the GOP-controlled Congress have their way, that deduction will be gone, the tax bill being the bitter pill for homeowners alone to swallow, without corresponding relief.

"It is a dagger to the heart of the people on New York," Senator Charles Schumer told Newsday. [Tax reform proposal eliminates deduction of property taxes and limits size of interest on mortgage deducted.] "We will do everything in our power to defeat this pernicious proposal."

The panel's conclusions come as no surprise to the informed and enlightened, President Bush having made this draconian proposal before the 2004 election. The measure, if adopted, would impact most severely upon middle-class homeowners whose income is generated mainly by their pay checks. The well-to-do, yielding the bulk of their income through investments, would likely benefit owing to a proposed decrease in the Capital Gains tax. [Phew. For a minute there we thought "W" might have to sell the ranchette. Thankfully, the income generated by Dick Cheney's sale of all that Haliburton stock will be protected!]

Even if the panel's proposal is modified, there are likely to be changes to the tax Code that limit deductions on property taxes, at least partially, causing still further financial hardship to already hard-strapped Long Islanders.

Just think - $10,000+ in property taxes, and NO TAX DEDUCTION to show for it. Still have qualms about replacing the school portion of the Property Tax (accounting for some 60% of the property taxes you pay, based on the value of your house without regard to income) with a nominal local income tax ( based on your ability to pay, and still a direct deduction from the tax due on your federal tax return)? Perhaps you'd do well to think again!

5 comments:

  1. Amazing, isn't it? From the White House, to the State House, to Hempstead's Town Hall, the Republican Party is continuing to stick it to the middle class.

    Seniors, college grads, and the rest of us caught in between be damned. As long as the oil men, the billionaires, and the party loyalists get their due!

    Property taxes are the ruination of our once great Long Island. Let's get behind anyone willing to look for a cure, or at least challenging our elected officials to stop the bleeding.

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  2. You forgot the Republicans in Congress. They're really giving the so-called middle class the once over (and like Councilman Santino, they tell us that we actually enjoy getting slammed).

    Remember that Medicare Drug Plan that the President and Congress rammed down our throats? The plan was supposed to save us money. Well, the only ones who profited are the drug companies, and both the seniors and the government (which, under the new law, is not allowed to negotiate the price of drugs with the manufacturers) are paying through the nose.

    And now the County GOP wants us to return to the "good old days," while the entrenched at the Town of Hempstead brazenly ask us to stay the course.

    Give us all a break, will ya? We should dispense with the pompous circumstance the Republicans have given us. They call it progress. I call it nothing more than DeLay!

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  3. Can I leave for Mexico and return as illegal alien? Years ago they said crime doesn't pay, today the word illegal pays very well. It is the rest of us tax payers who can't afford the bill any more. Illegal homes, Illegal day workers and all of those contractors who pay no taxes and now the federal government, Who else wants to hurt the middle class. Isn't time we listen to new ideas, doing nothing new will only increase our taxes even more.

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  4. "YOU WILL PAY MORE TAXES AND YOU WILL ENJOY IT!"

    More taxes for garbage collection, courtesy of the fleecing we get from the Town Sanitary Districts.

    More taxes from the Town of Hempstead, to pay for party patronage at Town Hall and the Town's Special Districts.

    More taxes against your homes to pay for those out-of-control school budgets.

    More taxes, more taxes, more taxes, to pay for Kate Murray's $113 million road improvement Bond, Kate Murray's Mailgrams, and Kate Murray's relatives on payroll.

    Just keep on returning these folks to office. After all, a fool and his money are soon parted!

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  5. Clowns to the left of me, jokers to the right.... you know the rest of the song. Talk about a double whammy. Republicans downstairs keep raising the taxes on us while the Republicans upstairs take away any relief from the burden. Canada looks better and better every day.

    Tax reform was supposed to be one of W's big agenda items for his second term. The primary piece would be to find ways to simplify the tax code and reduce the burden of taxation on saving. The following paragraphs are from an article in the Economist from January of this year.

    "Mr Bush is right that America's tax code is a mess. The tax laws and their attendant regulations run to 60,000 pages, 10,000 of which were created during Mr Bush's first term. The annual cost of tax compliance is estimated at $115 billion. Simplifying the system by slashing its myriad deductions would be a big step forward.

    And that is a large part of what Mr Bush intends to do. Although conservative ideologues dream of killing off the income tax and replacing it with a flat tax or national sales tax, the White House has little truck with such radicalism. Mr Bush wants to improve today's system, not junk it. He approves of tax breaks for mortgage interest, as well as the need to keep incentives for charitable giving. His commission, tellingly, includes no prominent advocates of fundamental tax reform.

    Some reform looks likely, however, thanks largely to the Alternative Minimum Tax. The AMT, which was originally designed to prevent rich Americans avoiding taxation, will hit 24m taxpayers by 2008, up from fewer than 3m in 2003. With luck, Mr Bush will marshal the political pressure from angry AMT-payers to push for some base-broadening reform. A clear political bargain could be arranged: elimination of the AMT in return for scrapping favoured deductions. The tax code will not be rewritten, but even modest improvements would be well worth having."

    The argument goes that if the AMT is scrapped becuase it is now engulfing many families in the middle class, that will offset the loss of the mortgage tax deduction.

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