Senate Democrat Calls For Elimination Of Income Tax Deduction

by Mike Godfrey, Tax-News.com, Washington

17 February 2005

Senator Tom Harkin (D – Iowa) is proposing new legislation that will reverse two new tax breaks for upper income taxpayers contained in President Bush’s budget.

The tax breaks in question, included in the 2001 tax bill, remove limits on the personal exemptions and deductions for high-income taxpayers, and are due to commence next year.

Under the first item, individuals can claim on their 2004 tax returns personal exemptions equivalent to a $3,100 deduction for themselves and their family.

The second item concerns limits on the value of itemized deductions for taxpayers, starting at an income level of $145,950 for 2005.

According to Harkin, some 54% of the tax breaks will benefit those making over $1 million a year, or 0.2% of households, while only 3% will go to those earning less than $200,000 a year.

“President Bush has talked about the need to make tough choices in this year’s budget,” remarked Harkin, who has claimed that the tax breaks will cost $146 billion over ten years.

“He has asked middle income families for sacrifice when it comes to their children’s education, their health care, and their public safety. Yet millionaires get yet another tax cut? Going through with these irresponsible tax breaks is a slap in the face to these hard working Americans,” he added.

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