[Rhodes22-list] Taxes - Timely Article

[Brad Haslett]

Rik,

I understand your point.  However, comma, the bottom 50% pay very little,
and a huge hunk of that percentage don't participate anyway.  Let's make it
official.  The top 20% pay most of the taxes, in fact, the top 5% pay most
of them, but everyone get's one vote.  I say we start with a new sheet of
paper.

Brad


On 1/18/07, Rik Sandberg <sanderico at earthlink.net> wrote:
>
> Brad,
>
> Yikes!!! this woman is scary. I wonder if she isn't into the
> Guinness......
>
> Subsidy, does she understand what that word means? How is taking less of
> a persons money a subsidy? By her way of thinking ALL of our money
> belongs to the government and nice guys that they are, sometimes they
> let us keep a little of it.
>
> This little blurb is really precious
>
> "They are also extremely regressive. A particular
> tax exemption might be worth 35 cents on the dollar to a wealthy
> individual
> and only 10 cents to someone on the other end of the income scale who
> faces
> a lower tax rate."
>
> Excuse me ....... how can you give a tax break to people who don't pay
> any???
>
> I think I'm going to read Ayn Rand again and see if I can figure out
> where all those guys went. It's starting to seem like a helluva good
> idea. This next thing has been around before, but maybe some need
> reminding. here's a link
>
> http://www.julianpistorius.com/journal/?postid=45
>
> Rik
>
>
>
>
>
>
> Brad Haslett wrote:
>
> > Here's an article from today's WaPo that dovetails neatly with our
> recent
> > discussion.  Care to make a bet about the home interest deduction?  No
> > one
> > in the Congress has the guts to take on that sacred cow!
> >
> > Brad
> >
> > -----------
> >
> > *The $800 Billion Tax Loophole
> > *
> >
> > By Maya MacGuineas
> > Special to washingtonpost.com's Think Tank Town
> > Thursday, January 18, 2007; 12:00 AM
> >
> > Democrats are in a bind when it comes to their domestic economic agenda.
> > They have promised a number of new and costly initiatives such as
> > fixing the
> > Alternative Minimum Tax, providing middle-class tax relief, and
> > increasing
> > spending on homeland security and education. But they have also made a
> > commitment to fiscal responsibility. So how can they deliver on their
> > promises without opening themselves up to the old "tax and spend" label?
> > Reforming tax entitlements -- a large, mostly under-the-radar part of
> the
> > federal budget -- might just give them a way out of their predicament.
> >
> > As a result of the 1986 bipartisan tax reforms, the tax base was
> > broadened
> > and the tax code was greatly simplified. But these reforms have been
> > gradually undone as Congress has created scores of new tax breaks and
> > loopholes. Want to preserve historic buildings, encourage alternative
> > energy
> > sources, help working families, or give certain industries a boost
> > without
> > appearing to increase spending? Voil? -- a new targeted tax break is
> > born.
> >
> > Most tax expenditures are really spending programs designed to look
> > like tax
> > cuts. Picture them as vouchers for healthcare, mortgage payments,
> > daycare,
> > transportation -- name the tax break. Dressing these programs up as
> > tax cuts
> > makes them a much easier sell for politicians who fear the "big spender"
> > label. But call them what you will, they drain the money from the
> > Treasury
> > and extend the scope of government. All told, this portion of the budget
> > represents $800 billion in lost government revenues annually.
> >
> > Not only do these tax breaks mask the true size of the government,
> > they are
> > a terrible way to make policy. They regularly pay people and
> > businesses to
> > do what they would do anyway, making them both poorly targeted and
> > unnecessarily expensive. They are also extremely regressive. A
> particular
> > tax exemption might be worth 35 cents on the dollar to a wealthy
> > individual
> > and only 10 cents to someone on the other end of the income scale who
> > faces
> > a lower tax rate. It would be hard to justify a housing policy that does
> > more to subsidize the rich than the poor, yet that is exactly what the
> > $80
> > billion a year home mortgage interest deduction does.
> >
> > Moreover, tax expenditures do not get nearly the level of scrutiny they
> > should. (If they did, would we really have a government program that
> > subsidizes millionaires who buy vacation homes?) New government programs
> > should only be created following vigorous debate over whether a proposed
> > policy is important enough to warrant government intervention, and if
> > it is,
> > whether it will be effective. Discussions about new tax programs
> however,
> > tend to focus almost exclusively on the cost. Billions of dollars of
> > targeted tax cuts have been passed in the past few years with little
> > or no
> > discussion about the worthiness of their goals. And unlike spending
> > programs, which are subject to congressional review, tax expenditure
> > programs are pretty much on automatic pilot.
> >
> > Reforming this area of the budget would not only be a critical step in
> > improving the tax code (and probably the closest thing we will see to
> > fundamental tax reform in the next two years) it could also generate
> > tens --
> > if not hundreds -- of billions of dollars in savings.
> >
> > The first step should be capping a number of existing tax breaks.
> Capping
> > two of the largest breaks -- the home mortgage interest deduction and
> the
> > exclusion for employer-provided healthcare, would easily provide over
> $50
> > billion a year in savings. Both of these changes would reduce the large
> > subsidies that go to the highest earners while freeing up resources.
> > Getting
> > rid of a host of other tax breaks that subsidize certain businesses or
> > industries could easily generate another $25 billion. A thorough
> > review of
> > the over 150 existing tax expenditures to determine which ones have
> > outlived
> > their usefulness would yield still more in savings. As Democrats
> > search for
> > ways to offset the costs of their new agenda, reducing the $800
> > billion tax
> > loophole would be an excellent place to start.
> >
> > *Maya MacGuineas is the Director of the Fiscal Policy Program at the New
> > America Foundation.*
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