The effect on the percentage of
itemizers on state income tax returns will vary across the states depending upon the size of the state standard deduction, the rules for who is eligible to itemize, and the allowable itemized deductions in each state.
The federal deduction for state and local income taxes is popular among
itemizers, but a new cap of $10,000 for joint filers this year means some people may be better off taking the standard deduction instead, McCue says.
We separate
itemizers by income range and report each group's mean charitable giving as a share of after-tax income.
Scenario I maintains current law and allows only
itemizers to take advantage of the credit, while Scenario 2 extends the credit to the charitable donations by taxpayers who do not itemize deductions.
higher-income
itemizers tended to be more aware of the accurate tax
Nationally, the homeownership rate is 66.2%, (192) while only 34% of taxpayers are
itemizers. (193) This suggests this reform could have a significant impact because almost twice as many taxpayers own homes as itemize.
One might argue that age-adjusted tax rates should take effect through deductions available to all older taxpayers (nonitemizers and
itemizers alike) without any change to the marginal rate schedule.
(229) The use of itemized deductions had escalated between 1950 and 1963, with the percentage of
itemizers among all taxpayers jumping from 19% to 44% and the cost of itemized deductions increasing from $10 billion to more than $46 billion.
Evidence of bunching is stronger for
itemizers than for non-itemizers.
Generally,' the Act provides that benefits will be tax-free and premiums paid for "tax-qualified" policies will be tax-deductible for
itemizers, subject to certain limitations.
Two alternative assignments would have either (i) all those in the $10,000 to $20,000 of assets category and above into the
itemizer category (59.3% assigned as
itemizers); or (ii) all those in the $40,000 to $80,000 of assets category and above into the
itemizer category (27.3% assigned as
itemizers).
While the deduction directly benefits
itemizers, who on average have a higher income than non-itemizers, he also recognizes that the deduction might indirectly help low-income individuals in two ways.
