David Broder, our aforementioned squirrel, has a column today in the Washington Post that says a whole lot of nothing (are there no mandatory retirements in journalism?) but then finally gets around to proposing two changes to the tax code with which I strongly agree. Both would 1) increase government revenue 2) raise the tax burden on some 3) do NOTHING to the income tax rates currently in place and 4) not hurt me at all (this is the truth in advertising part).
Broder proposes ending the mortgage interest deduction and the tax exclusion for employer provided healthcare. Frequent readers of this blog know that I am preternaturally hostile to the mortgage interest deduction. I believe it privileges one kind of investment over all others, it incents some to buy more house than they can afford on a month to month basis, and it artificially inflates housing prices. With respect to ending the tax exclusion for employer provided health insurance, one only needs to review John McCain's healthcare proposal during the 2008 campaign to see the wisdom of this proposal.
I know, I know--many of you are reading this and saying "what the hell CW? Are you proposing a tax increase?" Nothing of the sort. Well, not nothing, but nearly nothing of the sort.
I am proposing to--on one side of the ledger--remove these specialized tax breaks. This would of course, add to the tax burden of some (mortgage holders and those with employer-provided health insurance). On the other side of the ledger, I would reduce personal income tax and corporate income tax rates--both of which would be designed to offset whatever contractionary impact is predicted from the removal of the tax breaks. In both cases, the breaks would be phased out over ten years.
Yes, I know. I have neither a mortgage nor employer provided health insurance. Those who know me, I ask only that you trust that my position on the mortgage issue was the same when I held two mortgages. Those who don't know me, you'll have to make up your own minds.
Sunday, January 30, 2011
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2 comments:
CW said, "In both cases, the breaks would be phased out over ten years."
This would sell me. Ending the breaks immediately would be a shock to the system in which quite a few folks could be put into a pickle. Ten years may even be too long a period, but it is a good point at which to begin discussions.
Very minor stuff CW. Do you want tax reform? I do and I say the FairTax. It is a brilliant idea that needs to be investigated by lawmakers. It will cut the balls off K street and special interests of all stripes. And at this point in time it may be the only thing that can save us.
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