In your March 26 news article “Tax break for seniors advances,” I found the following statement interesting: “While some tax reform supporters say they were surprised by the impact on seniors, others say it represented a difficult trade-off in order to lower taxes for everyone.” This was in reference to the tax deductions that were eliminated in 2014.
I take exception with the “lower taxes for everyone” part. Here’s why. I compared my 2013 and 2014 tax forms. My adjusted gross income (line 10, D-400) was 6.5 percent lower in 2014 than in 2013. However, my taxable income (after all deductions) was 22.2 percent higher in 2014. That resulted in an 18.1 percent increase in my tax obligation in 2014. My total allowable deductions were down 27 percent in 2014, due to the tax code changes.
By comparison, the itemized deductions on my federal Form 1040 increased from 2013 to 2014 by 4.4 percent, due to higher medical expenses.
As anyone can see, my income was slightly less but my tax obligation was significantly higher. In order for the tax-rate reduction to offset the elimination of deductions, I’d have to have significantly more income than I do now. Lower taxes for everyone?