This is some bad news, according to this Michelle Goldberg artilce in Salon.
What to do when the tax cuts for the wealthy have put the country in deep, deep debt?
More tax cuts for the wealthy!
And how to pay for them?
Tax work more!
Two big, bad ideas.
The first is to eliminate the federal deductibility of state and local income taxes from federal returns. That's bad news for Illinois, as it will suck more money from this state to send to D.C. Our palty 3% state income tax which generates about $9 billion ($8.1 billion in 2000, according to page 9 of this report) is deducted from the 5 or 6 million individual federal returns of Illinois taxpayers. And with an average federal tax rate of around 25%, that means the Bush proposal would suck more than $2 billion from Illinois into D.C.
Hey, Speaker Hastert. Remember how I thought it was a good thing that you're from Illinois. Prove it. Kill this idea.
The other bad idea is to eliminate the deductibility of the cost of health insurance. Now that group plan most people are on is tax-free: you don't pay taxes on the value of the health insurance and the company deducts the cost of the insurance from their taxable income. Under this floated Bush plan, that would end. And lots of companies would drop their insurance.
Ever try to buy individual health insurance? I have. It's expensive and a waste of administrative effort. Welcome to the future, if the Bush plan is implemented. Of course, more money for health insurance companies, even as the rest of us pay more for health care. Go parasitic middle-men!