Fiscal Cliff Consequences
The rich on the East and Left Coast may not like going backward:
Reverting to pre-Bush tax rates on incomes above $250,000 – as the President and many Democrats have long advocated – would raise about $1 trillion over the next ten years. In order to achieve approximately the same amount of deficit reduction, the limitation on deductions would have to be set at 15%. In other words, taxpayers in marginal tax brackets above 15% would lose some of the benefit of their itemized deductions. Obviously, such a change would have the greatest impact on taxpayers in high brackets with a lot of deductions. In particular, the limitation on deductions would hit taxpayers in high tax states – such as NY and California – particularly hard.In other words, Hollywood would be paying more. It's always different when it's you and your friends who are being asked to "pay a little more," isn't it?