Daily Archives: Jan. 24, 2012

State of the Union open thread

Romney takes heat on taxes, firing people

It’s been puzzling to see Mitt Romney challenged in GOP primaries about his work in the private sector and his investment income. Does the GOP believe in free-market capitalism or not? Nonetheless, the attacks forced Romney to release some of his tax returns, which showed that he makes most of his income from investments and therefore pays about 15 percent in taxes. Romney also has been criticized for saying that he likes being able to fire people. Though Romney has complained about the comment being taken out of context, columnist Matt Miller argued that it was much worse in context. Romney was referring to firing health insurance companies, and he claimed that President Obama was eliminating people’s right to switch insurance companies. That, Miller wrote, was “a blatant falsehood.”

State tax cut could increase federal taxes

Another ramification of Gov. Sam Brownback’s tax plan: It could increase the federal income taxes of those who have itemized deductions. That’s because state income taxes are deductible on federal taxes. As a result, Kansans who itemize would see their federal income taxes increase by about $76 million overall, according to an analysis by the Institute on Taxation and Economic Policy. That increase wouldn’t outweigh the benefits of the state tax cut, but it’s significant. Federal rules allow taxpayers to deduct either their state income taxes or sales taxes paid. At some point, as tax rates are reduced, it would become advantageous for Kansas taxpayers to switch to deducting sales taxes.