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

To: DuckTapeSunroof who wrote (746959)	8/4/2006 10:39:43 AM
From: TimF	Read Replies (1) \| Respond to of 769670

PS - in my humble opinion, anyway, ALL income should be taxed at exactly the same rate... regardless of source There certainly is a lot to like about the idea. I think it would be better than what we have now. OTOH an argument could be made that investment income should be taxes less because taxing it less encourages economic growth, but then OTOH (how many hand do I have today? <g>) once you allow that exception to the one rate rule you encourage everyone else to demand their own exception, and eventually you could be back to the complex system where everyone wants and many get their own special tax breaks. Moving away from the question of what would be the ideal tax system, to deal with the real world consequences, and political problems of proposed changes. You do have some problems with the one rate idea. You would probably have to increase the rate on capital gains, which would discourage investment, at least to an extent. Also the mortgage interest deduction has increased the price of housing. Take it away and housing prices go down. There is some good in that, but all the people who paid the extra amount when there was a mortgage tax deduction get slammed, esp. so if they bought at the height of the market or if they took out large home equity loans that they would now be underwater on. Still its hard to see how your idea could be worse overall than what we have now. Unfortunately its hard to see how politically we could get there, or stay there. The special interest / public choice problem is a big one.