One day after the U.S. House of Representatives passed a budget resolution, paving the way for tax reform, Dr. Lori Taylor, an economist and Director of the Mosbacher Institute for Trade, Economics and Public Policy at the Bush School of Government at Texas A&M University, explores this topic in the latest issue of The Takeaway.
In “Are There Benefits to a Higher Standard? The Effects of Raising the Standard Tax Deduction,” Taylor summarizes how the US federal income tax works and who would be affected by an increase in the standard deduction.
Taylor notes that under one prominent proposal it’s likely that 84 percent of taxpayers who currently itemize would take the standard deduction instead, but argues that “Those privileged few who still itemize will receive subsidies for their health care, housing costs, state and local taxes, and charitable donations that the rest of us will not receive.”
She proposes that getting rid of itemized deductions altogether would be cleaner and fairer.
The Takeaway is a publication of the Mosbacher Institute for Trade, Economics, and Public Policy.