Why are the itemized deductions what they are

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Answer the following question

Question 1: Why are the itemized deductions what they are? Why allow home mortgage interest, but not credit card interest? Why allow medical expense deductions, not school expense deductions? Why allow state and local income and property taxes, but not state and local sales taxes? Why, oh why, oh why? What are your thoughts? Any itemized deductions you think should not be included, or that are not deductible but be? Why? Can you make sense out of the present scheme and the six major groups (medical, local taxes, some interest, casualty, contributions, miscellaneous)?

Question 2: The adjusted gross income number (AGI) is an important one. It is said it is always better for a deduction to be "for" AGI, i.e., deductible in arriving at AGI. These are also called "above the line" deductions. Why is it better? Can you name any specific benefits to being deductible above the AGI line? Discuss one or two "above the line" expenses or adjustments to income from the front page of the 1040. Why policy reason do you think made these above the line deductions instead of as itemized deductions?

 

Reference no: EM131404598

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