I’m not as outraged as the Wall Street Journal about plans to increase taxes. I think that eliminating or reducing deductions and simplifying the tax would, in general, be good things. What concerns me is that’s pretty darned unlikely to happen. What’s likely to happen is loopholes, i.e. deductions, closed for enemies, raised for friends, and the tax code will continue to expand and grow more complex and incomprehensible.
Just a little food for thought. A fair and economically efficient tax code could be written on the back of an envelope. The present federal tax code weighs in at around 74,000 pages. What does that tell you?
“What does that tell you?”
It tells you all you need to know. Because this:
“What’s likely to happen is loopholes, i.e. deductions, closed for enemies, raised for friends, and the tax code will continue to expand and grow more complex and incomprehensible.”
is the real political motivation.
I think the country would be much better off with closed loopholes but higher revenue generation – and yes on the “rich” – from a fairness, efficiency and less distortive point of view.
May I kindly suggest no one hold their breath. Pres Obama is making a career out of peddling the opposite.
Rent seeking.
What we need from our government representatives are a coalescence around real reform, versus ideological reform, regarding taxes, SS, medicare/medicaid, and our regulatory bureaucracy.
Two words why this wont happen: Rent seeking.
The idea that the very same (class of) douche bags that got us into this problem are somehow going to find a way to get us out is a very dubious proposition.
Steve Verdon,
You’re right, of course. However, it is still frustrating, especially when what is on the average person’s mind is so apparent!
For instance, most of the energy and news focus is on ‘gun control.’ But, what troubles the people the most?
Debt, Gov’t Dysfunction Rise to Top Americans’ Issue List
A staggering 84% of people have concerns about jobs, unemployment, monetary issues, dissatisfaction with government, over and above guns or even healthcare — each of the latter garnering only 4% of the tally. However, Obama spent his first term twisting healthcare into a national format, that a majority of the populace fought. And, now it looks like he is taking on gun control in his 2nd term.
So, who is out of touch?
Then you have this latest projection regarding SS, whereas: New social security retirees will outlive official trust fund.
Maintaining a viable economy offering worthwhile jobs is what sustains a country, it’s healthcare system, and helps curb it’s violent behavior. You need to go to root causes to problems, rather than freelance on popular social tangents, which is what social progressives like to do under Obama’s ideologue type of leadership.
I always get a kick out of these “the people hate Congress” or “85% say government is dysfunctional” articles. And then what happens? People vote the same scoundrels in as long as the scoundrel promises them candy canes.
It reminds me of sporting events where the fans are screaming “kill the ref!” and then their team gets a bad call to go their way and they smirk at each other and giggle “we got away with one there.”
From Mankiw
Wednesday, January 02, 2013
Tax Progressivity: Update
Here are the effective federal tax rates (total taxes as a percentage of income) for 2013 under the new tax law, as estimated by the Tax Policy Center, for various income groups:
Bottom fifth: 1.9
Second fifth: 9.5
Middle fifth: 15.6
Fourth fifth: 19.0
Top fifth: 28.1
80-90 percentile: 21.5
90-95 percentile: 23.4
95-99 percentile: 26.3
Top 1 percent: 36.9
Top 0.1 percent: 39.6
According to my opinion eliminating or reducing deductions is no less then increasing taxes !