[Rhodes22-list] Taxes - Timely Article

[Rik Sandberg]

Brad,

Well, I finished reading her article ...... She's still scary .... Wrong 
headed thinking....

But, you are right. A clean slate is in order and IMO the only 
worthwhile way to go.

Rik


Rik Sandberg wrote:

> 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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