NEWSMAX – ROB WILLIAMS
Larry Kudlow, the Reagan administration economist who also advised the Trump campaign, said the Republican tax reform plan threatens to “hurt a lot of different people” with changes to personal income taxes. He also said corporate taxes are the “sickest part of our tax system” in an interview with Politico.
“The individual side of this is maybe not the worst thing I’ve ever seen,” he said in a podcast. “But when you end the state and local deduction, because rates are still relatively high, you are going to hurt a lot of different people. So the internal logic was not good and this is not a true tax reform bill.”
The current system allows people to deduct state and local income taxes from their gross income before paying federal taxes. That means residents of New York, California and other high-tax states get a break. People who live in Texas and Florida, which are among the states that don’t tax income, have nothing to deduct. That has led critics to say the no-tax states are subsidizing the high-tax states.