Tuesday, September 16th, 2014

Tale of tumbleweed farmer earns Pants on Fire

Harvest enough of these, and you might be subject to a higher tax bracket. But you won't lose your mortgage deduction.
Harvest enough of these, and you might be subject to a higher tax bracket. But you won't lose your mortgage deduction.

At the weekly Republican leadership news conference on March 24, members took turns taking shots at President Barack Obama's proposed budget.

One of them, Rep. Cynthia Lummis, R-Wyo., took up the cause of a Kansas tumbleweed farmer to drive home her point.

"Every small business in this country will be affected by the president’s budget," Lummis said. "I think of a couple in Kansas. The woman in the family sells tumbleweeds for a living to augment their family farming salary. But they better not make more than $250,000 a year or they’re going to lose their mortgage deduction, their charitable deductions, their taxes are going to go up. So there is a cap now on the American dream. Especially the American entrepreneurial dream for small businesses."

The issue here is whether the family of our tumbleweed farmer, or any other family that makes more than $250,000, would lose their mortgage and/or charitable deductions under Obama's plan. That would be a shocking change because the mortgage deduction enjoys sacred protection in American tax law, and the charitable contribution deduction isn't far behind.

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