(C) As part of its initial application or in an amendment, the broker or dealer may request Commission approval to reduce deductions for credit risk through the use of credit derivatives.
But others permitted it, believing it reduced deductions for the marital and charitable expenses only if it created "material limitations" on the beneficiary's rights, material being something the IRS has never bothered to define.
It's especially hard on residents in high-tax states such as California because it disallows or reduces deductions for outlays such as state income taxes.
As in past budget proposals, Obama has called for capping income tax deductions for charitable donations at 28%, which would reduce deductions for individuals with taxable income above $200,000 and joint filers over $250,000.
Democrats had assumed that Republicans might agree to more tax increases, primarily through ending or reducing deductions, in exchange for Democrats' support for canceling sequestration of military accounts.
Under current law, a taxpayer in the 39.6% bracket who claims, for example, a $1,000 real estate tax deduction would reduce their taxes by $1,000*.3966, or $396 (before considering the Pease limitation, which reduces itemized deductions for certain high-income taxpayers).
Lawmakers also voted to reduce charitable deductions for those who make $10 million or more.
For instance, during the debate last year before the passage of the health care law, some legislators sought to reduce the deductions for pharmaceutical advertising.
Mr Obama needs more tax revenue, and corporate America's foreign profits are an appealing pot of cash particularly since Congress seems set to reject the administration's other (sensible) plan to reduce tax deductions for richer folk.
