Tax Breaks

Your tax breaks may be on the chopping block at the fiscal cliff.  Home mortgage interest, state income tax and charitable deductions. We’ll add it all up.

Fiscal cliff talk is everywhere now.  Will we crash?  Won’t we crash?  Is it real?  What’s the deal?  There is no deal yet.  There may not be one, as the clock ticks down.  But if there is, it is likely to include a deal on what Washington now likes to call “tax breaks.”

Like the home mortgage interest deduction.  Like tax-free employer-provided health insurance.  Like deducting state income taxes.  You may not think of these as tax breaks at all.  Just what you’ve got coming.  But they’re in play.  And more, too.

This hour, On Point:  the fiscal cliff and your deductions.
-Tom Ashbrook

Lori Montgomery, covers U.S. economic policy and the federal budget for the Washington Post.

Roberton Williams, senior fellow at the Tax Policy Center.

Diane Lim, chief economist at the Concord Coalition.

Christian Science Monitor "So this clarifies the political situation, right? President Obama’s solution wins, Speaker John Boehner needs to cave, taxes on the rich rise, Republicans andDemocrats walk arm in arm out of the Capitol to a bipartisan catered lunch at the Hawk and Dove."

CNN "Republicans have officially gotten on board with raising revenue for deficit reduction — by curbing tax breaks in conjunction with lowering tax rates. The idea of curbing tax breaks isn't new. Tax policy experts have touted it for years and Democrats, including President Obama, have proposed it in one form or another. That's why it may offer a key to resolving the fiscal cliff."

New York Times "A tax break that has long been untouchable could soon be in for some serious scrutiny. Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families — and the broader housing market."