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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (707772)	10/18/2005 11:21:35 PM
From: Peter Dierks	Read Replies (3) \| Respond to of 769670

Simplification "It would institute a "family credit" that would replace and simplify child-related tax deductions." Try it and hear the Catholics scream. Even though I think it is a good idea, I doubt it could ever see the light of day. "It would eliminate taxation of Social Security benefits," The taxing of SS was instituted in the seventies to help balance the budget. "Rich" (high income) recipients were deemed to be receiving an unfair tax break. "would do away with taxation of income from corporate dividends and would slash capital-gains tax rates." Good, double taxation is a bad precedent. This is an idea whose time is past due. "It also tax corporate profits on a "territorial" basis, eliminating tax paid by U.S.-based multinationals on income from foreign operations." This would put our code in line with many other developed countries. It would reduce the incentive for US companies to reincorporate off shore. Since the host country taxes the income, the double taxation is a penalty for being an American company. "And the plan eliminates the alternative-minimum tax, or AMT, a parallel tax system that threatens to encompass a growing number of middle-class taxpayers year after year. AMT elimination carries a heavy price tag, however. Budget watchers estimate the move will reduce revenues by $1.2 trillion over the next 10 years." Is that dynamically scored? I doubt it. The AMT was designed to prevent the rich from avoiding tax. It has never been indexed to inflation. It is now a middle class tax. "Panel members have targeted a range of popular tax deductions that would help make up the revenue loss. They argue that the changes to deductions for home-mortgage interest, employer-provided health insurance and state and local taxes will be more equitable and economically efficient. Under current law, taxpayers can deduct interest on home mortgages up to $1 million - a measure that some economists argue goes beyond the goal of encouraging homeownership and instead encourages the purchase of ever-larger homes. The panel's proposal would convert the deduction into a tax credit, which would extend its benefits to lower-income Americans who don't currently itemize their deductions. It would also put a cap on the size of mortgages subject to the credit. The level would vary by region." Tax credits are a horrible idea. They extend the underclass of non tax paying that view any government spending as a good thing. All Americans should pay some income tax. Even if it is $100 it helps one to realize that government spending costs money, and that the money comes from taxes. This proposal would prohibit deductions on moderate homes in expensive markets. Instead the deduction should be indexed for inflation. "the proposal would cap the amount of health insurance that businesses can provide to workers tax-free. Any benefits above $11,500 for families and $5,000 for individuals would be subject to tax, as well as many other fringe benefits such as life insurance." This might be a great idea if we get an expansion of MSAs. Modified consumption tax "The proposal includes the simplification plan's savings incentives. It would also tax all individual capital gains and other investment income at a 15% rate. The plan would install new tax brackets of 15%, 25%, 30% and 35% for wage income." This sounds like an income tax. "replace the depreciation system with immediate expensing of capital investments." It would have unintended consequences. Large depreciable projects would be phased in over a period of years to maximize the tax savings and minimize borrowing expense. Generally it is a good thing. Smart private business people know to use capital goods purchase to match depreciation with potential income, thus reducing or eliminating income tax expense. "The panel rejected a more straightforward consumption tax that would have excluded capital income from taxation, amid worries that such a plan would exclude wealthy Americans who derive all of their income from investments from the tax rolls." Duh, get rid of income tax and tax all consumption. People engaged in capital accumulation provide benefits to economic activity and their taxes might be reduced. This would benefit all. Others who live to consume would pay greater taxes. Since most recipients spend all inheritances within five years, a true consumption tax would eliminate the need for that immoral third tax. The foolish would voluntarily pay taxes. This report does not go into the same depth about the consumption tax that it does the reformation of income tax. Does the original report?