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Senate Tax Plan May Get Jeers, Not Cheers

May 25, 1986

James Flanigan's article on the Senate's tax reforms ("Tax Bill Gets Two--But Not Three--Cheers," May 13), concluding with "how little hissing this tax bill is attracting," deserves a rebuttal.

The bottom line is that big business and wealthy taxpayers will reap the gravy from lower tax rates. Most taxpayers will get a lot of crumbs.

For example:

- About 38 million taxpayers paid tax preparers to do their tax returns. Under the Senate's proposal, none of them will be entitled to deduct this expense.

- Millions of Americans who must belong to unions to hold their jobs and earn their livelihood will not be able to deduct this legitimate tax-related item.

- Millions of married couples where both spouses work will lose the "marital tax credit," which means that they will pay at least $1,000 in extra taxes when compared to two single taxpayers grossing the same taxable income. The differential increases as taxable income increases.

- Raising the "floor" of the medical expense deduction from 5% to 10% will have an unfair impact on taxpayers with major medical outlays. (Congressional tax reformers use this device to eliminate many legitimate deductions, and I predict that they will set a 3% floor on the state income tax deduction.)

- Finally, a majority of taxpayers will find the pittance of income-tax savings will be eroded by the higher Social Security taxes.

Unless the above inequities are addressed in the final tax bill, many Americans will belatedly hiss all those responsible.


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