Inkwell Institute
Budget Deficit Series #3
I was wondering when there would be a new bill dedicated to tax reform….the GOP has been hinting at it for almost a year now…..and now my wait is over….I am talking about the Gregg-Wyden Tax Reform Bill……and I am not disappointed the usual suspect are in there….tax cuts, corporate tax cuts, and on and on…
But I will let the WSJ take it from there:
The plan put forth by Sens. Judd Gregg (R., N.H.) and Ron Wyden (D., Ore.) would lower the number of marginal income tax rates to three: 15%, 25% and 35%. It also would eliminate the alternative minimum tax, which lawmakers scramble to “patch” each year in order to minimize its impact on middle-income taxpayers.
The plan would create a single corporate income tax rate of 24%, but allow small businesses with receipts of up to $1 million to expense all of its equipment and inventory costs.
The plan would target “direct payments and indirect subsidies to businesses each year,” but would leave it to the nonpartisan Congressional Budget Office to identify “the least productive” of those subsidies. Politically, that would be a tough task, as lawmakers fiercely guard subsidies that benefit their states and districts.
The capital gains tax also would see broad changes under the plan. The legislation would exempt the first 35% of capital gains income from the tax. Also, the first $500,000 of investment would be held for at least six months to be considered long-term capital gains income, and the next $500,000 would have to be held for a year to be considered long-term.
As usual this is NOT reform….this is the same thing that ALL health reform plans offer…..not reform but a tweaking of the system to benefit some but not all…..This is just an attempt to slow the criticism for the hyper-partisanship in Washington…..
If they truly wanted to reform the system then they would go with everyone pays a flat 15% of income with those making under $35,000 as exempt……they would call for ALL income to be taxed for FICA…there would be no exemption because of earnings ceiling….
The corporate tax thing….for decades the conservs have been bitching about the US has the highest corporate tax rate in the world….but they fail to mention once the tax breaks, incentives and deductions kick in it will be one of the lowest…..
I will go along with the 24% that these guys are calling for if there are NO breaks, cuts or incentives…..but that is a pipe dream on my part…why?….this section is the one that is most important…..the special interests of the corporations are pushing for this…the rest is just cover to get this section passed……
If they want REFORM then come up with REFORM…tweaking is a cowards way out….but true reform takes guts and hard choices (a future post) and those are sadly missing in Washington.
But you’re making my point for me… if government gets involved in ANYTHING this is ALWAYS (utterly without exception) the result!
I agree with you one hundred percent – simplify the whole goddamned thing…
But, if you do that, then what will all the millions of tax bureaucrats, accountants, book keepers, tax lawyers and other waste of timers do? Heck, what will government itself do?
They HAVE to make it complicated so that we NEED them all – otherwise we might all of us notice that they are a complete waste of time, space and money.
I TOLD you – minimal government! 😆
I am smiling now……I try to help out anyway I can….lol
I do not have a problem with a minimal government but not to the extent that Nozick was spouting…..but if we streamline the government of bureaucrats….do you know what that would do to the unemployment figures? (thinking)……okay it would be worth it…..
Oh it would be so-ooooooo worth it! 😆
Just based on the article, I do not see how it would benefit the middle or poor class. It certainly would not benefit me. Then again, that probably is not the intention. The real meat is going to the wealthy and only a few bones to the middle.
Gee… a 24% corporate tax rate… looking at the brackets, that means corporations will pay less of a percentage than most people. Why not 25% or 30%? Oh that is right, the ultimate goal is to eliminate all corporate taxes. Even though they have the rights as people, they should not have the responsibilities according to conservatives (and increasingly libertarians)
I love what they want to do with capital gains. It is almost like the hokey pokey. I guess they figure if they make an explicit rate cut, the dumb masses would object.
Like I said a flat rate…they bitch about 30-35% they say they pay now….but with tax incentives, breaks and cuts it works out to about 14%……I say lower it and have NO options out of the tax….you pay or the IRS comes a calling….
In the UK, most people only pay around 20% after the first £5000 or so up to around £40000 of income and then more over that threshold… That doesn’t sound too bad, does it?
Of course, when you look at all the OTHER taxes like VAT, import and purchase duty on this, that and every other goddamn thing, local taxes, National Insurance (that’s another government tax like income tax for those of you who don’t know) at another approximately 10% – PLUS up to 12% from your employer just for employing you – and all the hundreds of “stealth” taxes that we know almost nothing about… so, in truth, something like 60-70% (depends how you calculate it – love statistics!) of our incomes all go to the government!
And what do they do with all that dosh that they stole from us? Legislate like there’s no tomorrow about things we don’t give a shit about and then give whatever’s left (PLUS a whole lot more they borrowed in OUR names) to the fucking BANKS!
Great, eh?
VAT should be used to eliminate all other forms of taxation……or go to land value taxation…..
Oh, don’t be silly – when did they EVER eliminate taxes? They ADD them! If the very occasionally do REPLACE a tax, it’s with a higher and more complicated one!
An article that I read recently puts it at 16%. I would love a flat tax rate and income is income no matter how it is earned or received. Personally, the system I would come up would be something that I would hate.
You are probably right….I was working from info I gathered about 5 yrs ago…..and I also would not bitch about a flat tax of say 15% across the board..no deductions, no exceptions…everyone pays with the exception of the poor who pay nothing in income tax….
Don’t forget about temporary taxes. Indianapolis is still paying a temporary taxes for a stadium that is now a pile of rubble.
Good point Terrant…in my area we are still paying a temporary “Sea Wall Tax” from the 1940’s…..temporary does not mean temporary…..