Word: iras
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Eliminating deductions for IRA contributions. Individual taxpayers would no longer be able to deduct up to $2,000 in annual contributions, though they would still be allowed to defer taxes on the interest they earn on their accounts. The committee decided to wipe out much of the IRA benefit because the accounts are expected to cost the Government some $13 billion this year, and it has never been proved that they prompt consumers to save more. But banks and mutual funds, which together hold a large chunk of the $250 billion in IRA accounts, want to shoot down this part...
Repealing the deductibility of interest on consumer loans. Taxpayers would no longer be allowed to write off the interest they pay on auto loans, credit-card balances and other nonmortgage financing. This may bring a loss of business for lenders and the makers of vehicles and heavy appliances. Said Ira Shapiro, director of tax policy at the Coopers & Lybrand accounting firm: "It could change the way people buy big-ticket items. They may prefer to buy the cheaper item in a product line and pay cash for it, instead of borrowing...
...lost write-offs. Tax shelters for oil and gas drilling, however, were largely spared because of that industry's dire condition and political clout. Most businesses are finding that the new tax proposal is a mixed bag of helpful and hurtful surprises. Stockbrokers, for instance, would lose IRA business but would pick up investment money that might otherwise have gone into tax shelters. Automakers might suffer a bit because car loans would no longer be deductible, but could expect to benefit from the accompanying tax cut that puts more money into consumer pockets. Farmers would mourn the loss...
Meanwhile, people sleep on the streets while our tax dollars are at work waging war in Central America. We know we really ought to find the time and the courage to do something about it. (Things to do today: call insurance broker, add to IRA, smash the state...
...Journal, Michael Davis of The (Baltimore) Evening Sun, Susan Dentzer of Newsweek Magazine, Valerie Hyman of WSMV-TV in Nashville, Nancy Lee of The New York Times, Martha Matzke of Education Week, Michael Meyers of The Minneapolis Star and Tribune, Charles Powers of The Los Angeles Times, and Ira Rosen of the CBS program "60 Minutes...