Monday, March 13, 2006

Income tax regulations regarding depenents

The income tax deduction is approximatelt $3,200 per dependent. Dependent upon their taxable income, the deduction may be worth very little, or nothing, or $320 to $1,120 to a taxpayer.

This is an example of additional inequality due to “tax bracketing”. This is in addition to the mischief and (I hope) inadvertent results due to the lack of dollar indexing. Indexing would consider the change of the dollar's value due to inflation over years.

IMO the function of dependent tax deductions should be primarily to assist the working poor. Presently our tax regulations grant working poor families less benefits and wealthier families more benefits per dependent.

IMO the amount per dependent should be a tax credit rather than a deduction per dependent. The savings per dependent should be the same for all taxpayers. The amount should be indexed, (as should be all finite dollar amounts in tax regulations). I would prefer an indexed tax CREDIT amount of at least $800 per dependent rather than our present finite $3,200 DEDUCTION.


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