Raising Women’s Voices

Obama to fund improved health care with taxes on the wealthy

Posted in Uncategorized by raisingwomensvoices on March 6, 2009

President Obama announced his plan to raise half of the proposed $634 billion “reserve fund” for health care reforms off the revenue generated from reduced tax breaks on the wealthiest Americans.  Specifically, he will lower the value of itemized tax deductions for everyone in the 35% income tax bracket and for many in the 33% bracket.

Under existing law, the tax benefit of itemizing deductions rises with a taxpayer’s marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.

Mr. Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket.

The White House says it is unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions.

Balancing a lop-sided tax code, from which the wealthiest members of our society have been benefiting at the expense of millions of uninsured Americans for years, sounds to me like a good place to start.

Read last week’s NYT article on the plan.

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