Pretty much what happened. And, in retrospect, it badly hurt the economy. The middle class, in this country, finds almost its entire income taxed, while the wealthiest are able to shelter most of their income.
If you believe the wealthiest are able to shelter most of their income, why don't they do it?
People who assert that the wealthy are able to shelter their income are showing their ignorance of tax law. These people apparently have never heard of the Alternative Minimum Tax, Section 469 Passive Activity Loss Limitations, Section 465 At-Risk Limitations, and a ton of other measures that effectively eliminate the possibility of sheltering large amounts of income.
I might add, the closing of tax shelters (i.e., the enactment of Section 469 and the revision of AMT) happened when Congress passed President Reagan's TRA '86. A REPUBLICAN PRESIDENT proposed and demanded enactment of the legislation that effectively closed off the tax shelter "loopholes" that had existed, to a large extent, since 1954.
Liberals often make the allegations that the wealthy can "shelter" their income, but this is ridiculous and just reflects a total lack of understanding of the issues. |
