Bush to raise taxes by removing state deductions

http://story.news.yahoo.com/news?tmpl=story&cid=2026&e=3&u=/latimests/20041205/ts_latimes/proposalwouldhitbluestatetaxpayers

"Some conservative activists are urging the Bush administration to scrap the federal deduction for state and local taxes as part of a broader plan to revamp the nation's tax system.

Although the proposal would hurt some taxpayers in nearly every state, it would hit hardest in states with higher-than-average income levels and bigger-than-average state and local tax burdens. High on the list are a number of blue states — those that were carried by Democrat Sen. John F. Kerry in last month's presidential election.

Taxpayers in California and New York, for example, which have top state income tax rates of 9.3% and 6.5% respectively, would be highly affected; residents of Florida and Texas, which have no state income taxes, much less so. "

So you will be paying more income taxes if you live in a state that has state income taxes.

"Bush has hinted strongly that his proposal would preserve two popular tax breaks: the deductions for mortgage interest and charitable contributions. That he has not mentioned preserving the state and local tax deduction has been interpreted by some as a signal that it is fair game as the administration looks for ways to finance other tax changes"

So we are getting tax break by removing federal deductions which is basically a tax increase. That might sound right, but here is what is actually happening: We blue states are giving tax relief to the red states.

Bush also said he wanted to do this tax break to increase growth of business.
So bush wants to take the businesses of the best two states (New York and California) and give it to the rest of the red states.