[Rhodes22-list] Taxes - Timely Article OOPs

[3drecon at comcast.net]

Oops, I meant the XVI Amendment (of 1913)

Philip


-------------- Original message -------------- 
From: Bill Effros <bill at effros.com> 

> PS -- The 13th Amendment abolished slavery. 
> 
> Bill Effros 
> 
> 3drecon at comcast.net wrote: 
> > I have deliberately stayed out of all the political discussions lately, but I 
> am compelled to comment. If this has been addressed, then I apologize (I refuse 
> to read all the previous tax e-mails). The Flat Tax, Fair Tax, National Sales 
> Tax, or any other tax that will replace the current system can work and can work 
> well under a number of circumstances however; the one event that must occur is 
> the repeal of the 13th Amendment authorizing the Income Tax. No matter what 
> Congress passes, a future Congress could otherwise reinstate the income tax on 
> top of any other tax solution (and they will). 
> > 
> > Philip 
> > 
> > 
> > -------------- Original message -------------- 
> > From: "Brad Haslett" 
> > 
> > 
> >> 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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