[Rhodes22-list] Taxes - Timely Article

[Rik Sandberg]

Brad,

I have to admit, I came unglued right away and didn't read the whole 
article. Maybe I should go back now that I've settled down and finish it :)

Yes, I AM in favor of a new sheet of paper. I still like the sales tax idea

www.fairtax.org

With this program, one could literally choose whether he'd like to pay 
taxes like a rich guy or pay very little. 'Course one's standard of 
living is going to have to reflect that choice. But for the conservative 
spender, saving for retirement might actually be a possibility.

And Philip ..... there is a provision in this to repeal ..... uh, 
whatever the hell amendment it is, that allows income taxes.

Rik


Brad Haslett wrote:

> 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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>> >
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