He has called for putting a cap on the value of itemized deductions, like charitable contributions.
Those who fall into it lose various deductions, like state and local taxes and, in some cases, mortgage interest.
Most reform proposals suggest gradually eliminating the most popular tax deductions, like mortgage interest rates ($120 billion per year) and workplace health insurance ($200 billion per year).
Total income, he said, does not take into account what he called normal and often-significant corporate deductions, like salaries and interest.
Exemptions for the taxpayer and his dependents are taken away, as are some deductions for medical expenses and all deductions for state and local income and property taxes and miscellaneous deductions, like fees paid to lawyers in job discrimination lawsuits.
Professor Auerbach would have charges and deductions — like for borrowing and for spending on plant and equipment — taken when money is earned or spent, rather than gradually through accounting devices like depreciation schedules.
And I was amazed to discover that unlike other deductions, like state and local taxes and personal exemptions, the tax preference for capital gains is not added back when calculating the A.M.T.
Many of these people who live tax free are real estate developers and landlords, whom Congress allows to use deductions, like that for depreciation of their buildings, to offset their incomes.
So if you have lots of deductions, like interest expense, that reduce your tax rate to below 30percentt of your adjusted gross income, the Buffett rule would have the effect of denying you your deductions.
But he never displays an example or schema of these deduction-like inferences.
Paper checks and automatic deductions - like preauthorized monthly student loan payments -- will still be paid from high to low.
