To make their tax plan work, Republicans eye a favorite blue-state break

[Igel]

2. None of the middle-class folk I know care about the federal state-tax deductions.

Then again, we live in the second largest state in the US and pay no state income tax, so it's completely irrelevant to us.

There was talk or maybe there briefly was a way to give people in such state a substitute deduction to compensate.

Before Reagan a lot of things were deductible. The mantra was "reduce rates but close loopholes." Non-mortgage interest was a loophole. Many wailed when it went away. At the time, any contribution to a non-profit was also deductible--donate $20 to some group or a religious NGO and you could deduct it. That, too, was a loophole.

The deduction for non-profits was viewed as a religious subsidy. The deduction for interest wasn't viewed as a subsidy. Home mortgage interest deductions are viewed as a subsidy. But the state tax exemption isn't. I personally don't view non-taxation as subsidization. It still strikes me as a bit unfair.

Just think of the increased federal revenues from eliminating that deduction. It would have to help reduce the deficit.

Anyway, removal of income tax averaging hit just as my income increased. So I couldn't average.

SS benefits became partially taxable as the result of a House bill introduced by Dan Rostenkowski. The '86 tax reform was also introduced by him. (D). The House was majority (D) for the SS amendments and the two tax reform measures in '84 and '86.