What was 2008 standard deduction

This is because higher income taxpayers are more likely to own their homes and therefore claim mortgage interest and property tax deductions. Additionally, higher income taxpayers may also owe state income taxes that are deductible in determining federal taxable income. Conversely, it is true that many of our elderly have paid for their homes, and thus, no longer have mortgage interest deductions. However, in general, it remains true that as an additional standard deduction amount, this tax benefit for the elderly is more likely to go to lower or moderate income elderly taxpayers than would an itemized deduction.

Unfortunately, statistics are not available that separate those who claim that the age deduction versus those who claim that the blindness additional standard deduction amount. Presumably, most qualify based on age but there are no precise data. Even if the tax provision were more precisely targeted and it was only available to the needy, it could still be criticized on equity grounds: it discriminates against other needy taxpayers. One notion of fairness is that the tax system should be based on one's ability-to-pay and that ability is based upon the income of taxpayers—not age.

Further, the original rationale for the provision as cited earlier in this report noted that the elderly were "handicapped in an economic, if not in a physical sense". Thus, as but one example, other taxpayers with disabling conditions may be in as much need of tax relief. For, just as the elderly are faced with diminished earning capabilities so too are many disabled persons due to their individual impairments.

Further, like many elderly, many disabled taxpayers have low incomes. Congress may review alternatives that would improve the targeting of the provision. The availability of this provision was founded on the taxpayer having attained 65 years of age. In the intervening years, life expectancy has increased. The Social Security program recognized this fact and provided that future retirees will receive full benefits but only at higher age levels. One alternative would be to raise the eligibility age.

For example, the Census Bureau reported that total money income of the elderly declines when those between the ages of 65 to 74 years old are compared with those 75 years and over. As previously noted, the value of the additional amount is greater for higher rather than lower income taxpayers.

If Congress wanted the provision more focused to benefit lower income elderly then it could be converted to a tax credit with a phase-out range. For example, the dependent care tax credit amount decreases as income rises. The credit might be made unavailable to higher income taxpayers such as is done in the case of the tax credit for the elderly and permanently and totally disabled.

Another alternative would be to investigate a change from a tax-based program to a grant program. Under a grant program, the revenue costs are known and benefits precisely targeted with conclusive rules and regulations.

It may be noted, however, that a grant results in taxable income to the recipient unless specifically excluded by statute. Demographic trends are such that with the nation aging it may be that this tax expenditure could grow in size. For more information on the provisions available to aged taxpayers, see the U. For more information on this provision, see U.

Washington: GPO, 9 p. Committee on Ways and Means. Revenue Act of , Report to Accompany H. Washington: GPO, , p. And also U. The higher standard deduction amounts were effective one year earlier for elderly or blind individuals.

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