Hot stuffOnly on the subway: This week's top 5 moments Take a look into TOMS' brand new SoHo store
Editorial: Tax reform that could help Long Islanders
Cursing the rapaciousness and complexity of the federal tax code is a rite of spring, like spotting the first tulips and robins. Congress should at least make filing less onerous.
The way to do that is to lower tax rates across the board and, at the same time, scrap or limit most of the deductions, credits and loopholes that helped swell the code to a mind-numbing 3.7 million words.
Unfortunately calls for that sort of tax reform have fallen on deaf ears in Congress. Election-year partisanship is too raw to expect agreement on anything as controversial as fundamental tax reform. But because of our higher earnings, all of those complex credits and deductions do little to reduce the tax bills of many Long Islanders. We need a break too.
Rep. Steve Israel (D-Huntington) wants to provide one by indexing tax credits -- like the earned income tax credit, the child care credit and the savers credit -- to the regional cost of living. That would be fairer, for instance, for a taxpayer in Nassau County, where it takes $62,810 a year to buy the lifestyle that can be had for $45,460 in Akron, Ohio, or $39,750 in McAllen, Texas, according to Third Way, a centrist think tank. All other things being equal, the current earned income tax credit for that Nassau family would be zero, while the Akron family could claim a $611 credit and the McAllen family $1,812 -- amounts that would be subtracted from the taxes they owe or refunded.
The idea will be a tough sell politically in most of the country. But at least Congress should index the alternative minimum tax that by this April 15 is expected to ensnare 3.9 million taxpayers. The AMT was imposed in 1969 to make sure the wealthiest Americans pay taxes, even if deductions and credits would otherwise reduce their obligations to zero. But the AMT wasn't indexed to inflation. So now it plunders the middle class, particularly taxpayers who have a spouse, children and a mortgage, and pay high state and local taxes. In other words, many of us.