Quote:
Originally Posted by Aadill
[You must be logged in to view images. Log in or Register.]
*eradicate many of the tax loopholes that currently exist except for standard deductions for individuals/families and standard corporate deductions WHEN APPROPRIATE (I believe there is currently a percentage deduction available). These deductions set a fairly hard line for determining benefit to tax ratios. They are currently off as had been mentioned in another post on these boards in the sense that if you make less than $54k/year you're sucking money out of the system more than you're contributing. With this I would say, lower the standard deductions and rescale the tax code or remove the deductions altogether.
|
I listened to a senior tax partner at a big 4 firm talk on this a couple weeks ago. I'm also a CPA w/ a masters, etc. Believe me when I say that:
This is maniacally stupid and would eviscerate the economy. First, you people have to quit using the word loophole when you mean "tax expenditure" (things written into the tax code which reduce tax revenue collected either by deduction or credit). These are deductions or tax incentives put in place to encourage a specific behavior. You can't be against government encouraging behaviors it deems good through tax law in one breath and advocate huge tax credits for bringing jobs back from overseas in the next, because the principal is the same.
Do you realize what would happen to the real estate, construction, and countless related industries if you removed the mortgage interest deduction (the thirdlargest by overall dollar impact to individual tax revenue)?
They would collapse, almost immediately. Millions upon millions of people would lose their jobs.
I'm pretty sure the top tax expenditure, exclusions for employer-provided health care and insurance, isn't going away. Maybe you want to remove the second biggest in allowing people to put away pre-tax dollars for retirement? Yeah, let's quit incentivizing people to save for their own retirements, I can't see any long term negative effects from that.
After the top 6 or 7 tax expenditures, they to become immaterial on both an individual level and in aggregate to the budget. Removing things put in place to encourage behaviors we deem as a society to be good, either on a moral, environmental or economic level is not how you "fix" the budget or tax code. It's how you further screw the economy.
On the corporate side, the top three things the current administration identified as loopholes, if eliminated completely, only saves 130 billion total over 10 years (not time value adjusted). That's NOTHING.
The tax loophole stuff is talking point nonsense from people who don't actually understand the tax code and the federal budget. I know you're smarter than that, and people who do understand them aren't going to take you seriously if you're leading arguments with idealistic contradictory points which show a lack of understanding of the subject matter. I realize there aren't many people like me as a percentage of the popluation, and you're not really reaching out to us in the first place, but it makes my head explode.