Word: deductions
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...Deductions for interest on personal loans, and on loans to buy cars, boats, furniture or a second or third home would be capped. If a taxpayer collects investment income, such as rents and interest on savings accounts or certificates of deposit, the cap would be $5,000 in excess of that income. For example, if the taxpayer collects interest of $2,000, he or she could deduct no more than $7,000 in interest paid. Taxpayers who have no investment income would be limited to a straight $5,000 deduction for interest paid...
...squeeze more taxes out of industries thought to be treated unduly mildly now. Banks and other financial institutions generally would have to pay more. For example, they could no longer defer tax on money added to reserves to guard against future loan losses. For the most part, they could deduct only actual rather than estimated future loan losses, and then only in the year that the loans prove to be uncollectible...
...theory that income owed in taxes to state and local authorities should not be taxed again, Washington has traditionally allowed taxpayers to deduct those funds from their federal total. For those who itemize their deductions, especially if they live in a state with high taxes, the largest single write- off on their federal return is often the combined total of state and local taxes on income, real estate and retail sales. Residents of New York State who took the deduction in 1982, for example, saved an average of nearly $1,300 on their federal tax bill. Not coincidentally, the Empire...
Effective lobbyists, naturally, can offer credible policy arguments for almost any tax break. Under current law, for instance, apartment builders can quickly write off the cost of construction, particularly for low-income apartments, and deduct their property taxes. By cutting back these tax breaks, the Administration would drive up the cost of building and owning apartments, and consequently drive up rents as well. Taxpayers can now deduct state and ; local taxes from their federal returns. To the outrage of politicians from high-tax states, this break would be wiped out by the Reagan plan, thus saving the Treasury $22 billion...
...centerpiece of the massive $750 billion Reagan tax cut of 1981 was a provision that allowed businesses to deduct the cost of buying new equipment even faster than the equipment wore out. This "accelerated cost-recovery system" would cost $35 billion next year. Treasury I eliminated ACRS, but lobbyists persuaded the Reaganauts that the economic recovery was in large part produced by such enlightened tax cuts. As a result, Treasury II largely restores ACRS...