Feature Story

April 2, 2009

Limiting Itemized Deductions for Upper-Income Taxpayers Would Have Little Effect on Small Business, Charities, Housing

From Center on Budget: Housing:

Despite persistent claims to the contrary, the President’s proposal to cap the value of itemized deductions at 28 percent would have only small effects on small business, charitable giving, and homeownership.

That’s because the proposal, which would save $318 billion over the next ten years to help finance health care reform, would affect only those tax households with incomes over $250,000 that face tax rates of either 35 or 33 percent and that itemize their deductions. Such taxpayers represent fewer than 1.2 percent of all taxpayers.

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