Tax Policy Debate: Raising Rates Versus Limiting Deductions
http://thedianerehmshow.org/shows/2012-11-20/tax-policy-debate-raising-rates-versus-limiting-deductions
January 1st, 2013, is just six weeks away and that’s the day tax rates are scheduled to jump and federal spending slashed, a prospect so dire it’s called the “fiscal cliff.” The biggest immediate obstacle to a deal to avoid that fate is the debate over taxes: President Obama vows to raise tax rates for the wealthy. Congressional Republicans oppose higher rates but say they could agree to curbing deductions and closing loopholes. Negotiations between now and year end are likely the opening skirmishes in much longer and larger efforts to overhaul the tax code. Please join us to talk about tax rates, tax deductions and the policy debate ahead.
Guests
David Wessel
economics editor for The Wall Street Journal and author of "Red Ink: Inside the High-Stakes Politics of the Federal Budget."
Roberton Williams
principal research associate at the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution.
Rachel Smolkin
White House editor for Politico.
Comments
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partisan politics wrote:
"False"? you can't know that with any certainty. Europe has shown that the acceptance of much higher taxes on everyone did nothing to help long term prospects. We can only imagine where we might be right now if there was not a traditional American aversion for tax increases.
Again your example proves my point. Politicians will spend what they deem necessary to achieve re-election. Whether the money is from increased taxes or deficit spending is irrelevant to them. Either case disproves your quote.
"Steve on Plum Isle wrote:
Do check out this week's The Economist.
A table on page 28, regarding the piece called "Opening Bids" gives a nice breakdown of the $ that could be raised.
Taxing dividends and capital gains as ordinary income, limiting deductions, and lowering the estate tax (which was pushed by Obama by the way) sure looks like interesting low hanging fruit.
And oh - wish the phrase "fiscal cliff" would be expunged and replaced by fiscal "slope" or some such phrase.
November 20, 2012 - 10:17 am"
And did you notice that while they beat Income Taxes and Deductions to death, I don't recall a single mention of the three biggies- dividends, capital gains and the estate taxes.
Which Plum Island? York County, VA or Massachusetts?
Monte Haun mchaun@hotmail.com
"C B Stranaghan wrote:
Equitable, a Tax Perspective
I hope all listening to the ex-military dentist moan & groan about tax increases preventing him from opening his Third dental clinic in California also heard his comment that he needs no mortgage interest deduction on his home (because he pays no mortgage?).
...
It sure sounds like the successful dentist-businessman lamenting possible effects of a tax increase has not given a single thought to the perspective of poorer Americans. And, his is the same message we hear often from others who live in this well-to-do stratosphere, a group which, incidently, includes many of our congressmen. All things considered, Equitable is the word which comes to mind.
November 20, 2012 - 12:12 pm"
That Guy was a Stooge!!! Is he drawing an Officers sweet Pension, paid for by the People??
Employs 15 DENTISTS and TECHNICIANS and only made $100,000?????
Furthermore, that super lame claim that he won't expand if his taxes are raised.
I believe in the Law of Diminishing Returns, but can't conceive of any tax structure that would trigger it. During and after WWII, tax rates on the wealthy were near confiscatory, but business thrived.
"End result? Increased wealth for the wealthy as they become landlords to those whose lost their homes. In fact the wealthy will win-win, again, when they later sell their investment properties for a profit, after they drive the prices up. And this is how the poorer people among us, the 98%, are lose-lose-losing."
Or better yet, offset the Income by depreciating the Investment down to Zero, then burning it down for the insurance!!
Monte Haun mchaun@hotmail.com
mchaun wrote:
"That Guy was a Stooge!!! Is he drawing an Officers sweet Pension, paid for by the People??
Employs 15 DENTISTS and TECHNICIANS and only made $100,000?????"
Misheard, sorry.
Monte Haun mchaun@hotmail.com
I wish commentators would stop lumping things together in tax discussions, for example. including Social Security and Medicare and mentioning the closing of a local post office as items that will improve our deficit picture. None of these are parts of the deficit -- all of them have budgets that are independent of the federal income tax system.
I grow so very weary of people like Mark--has 2 dental clinics, in our top 2%--complaining that he just might not open a third.
Guess what Mark? Maybe that will allow another entrepreneur to open a dental clinic.
Everything has limits, there is a limit of the number of dental clinics we can have and a limit on how many rich people we can have. It is a blessing if you just stick with 2 clinics and someone else can open one if it is needed in your community. Perhaps that person will be able to buy a house or two and get a new car.
So weary of intelligent people carefully apologizing to the uber-wealthy about how sad it is that in a civilization, there is a ceiling to the amount of resources any one person can commandeer.
Although I was generally pleased with the outcome of 2012's election, & the apparent cooperation between the President and Sen. Boehner to reduce the total deficit by $1.6 Trillion over the next 10 years, I find little reassurance in this news. Based on last years deficit of $1.6 Trillion, the net result would be an addition of $14.4 Trillion to the national debt in 10 instead of $16 Trillion. This would bring the total debt in 10 years to $30.525 Trillion, based on http://www.usdebtclock.org/. If we estimate that our population in 2022 will be 350 million, that would be a debt of $87 million for each & every citizen. I am no accountant, but I can't fathom surviving the consequences of a debt that size. The most logical solution is draconian cuts to every budget item; suspend all $ 4 Space program, let the other countries pay to keep that going, cut the military budget by 1/3, cut all subsidies, eliminate all loop holes, raise tax rates, & limit deductions on all taxpayers earning over $250,000, invoke severe tort reform, put price controls on Rx, & medical procedures. Failure is not an option. Triage may become necessary in providing life saving medical care.
[removed duplicate post]
Also for Partisan Politics: Where tax revenues have fallen to a 40-year low (14% as a percentage of GDP), the solution must include raising tax rates and/or eliminate deductions. Especially, eliminate the favorable treatment of dividends (i.e. the Mitt and Warren problem).
Fortunately, many Americans made a pledge of their own... NEVER vote for a politician foolish enough to sign a pledge.
It is amazing that so many people are talking about Twinkies, which are nothing but poison that makes one FAT, instead of addressing the serious issues being discussed.
No wonder SOOOO many Americans are OBESE, as well as, stupid. I hope Hostess fails so garbage is not available to these crazy folks. I know they will find hamburgers and crappola to fill their bellies all the way to their extra large graves.
Seriously folks, taxes are not going to go up for 90% of the populace. Bush gave his cronies a TAX-CUT and they are ending. We have paid these taxes prior to these give-aways from Bush.
This is a minor increase in taxes which we paid previously. Stop Whining!
Ferdnam wrote: "In any case, there is one essential caveat in your quote: "whenever it's possible." By big government standards, there always exists a desparate need for more funds. Milton I am certain would not appreciate your interpretation.
I will take Milton at his own words, no "caveat". This ain't the living Constitution garbage. He made it clear by my reading of the entire quote, to take it when you can get it no matter what. "whenever it's possible" By big government standards, there always exists a desparate need for more funds. Milton I am certain would not appreciate your interpretation.
Mike Sergeant wrote: "Either case disproves your quote"
Unless you have supernatural powers, again, you can't know that with any certainty.
MtnWoman wrote: Bush gave his cronies a TAX-CUT and they are ending.
The middle class cronies?
Bush tax cuts: $544.3 billion…The bulk of that cost — $463 billion — is for the extension of cuts for families making less than $250,000, including two years of relief for 2010 and 2011 for the middle class from the Alternative Minimum Tax.
The rest — $81.5 billion — is attributable to the extension of cuts that apply to the highest income families.
In other words, 85% of the tax cuts went to the middle class.
But, Obama didn’t care. He needed a talking point.
http://www.thegatewaypundit.com/2011/07/another-obama-lie-exposed-85-of-...
Co-signed. It's one of the biggest scams in our tax policy which subsidizes the rich and penalizes the Middle Class simply because the rich then don't pay as much in taxes to reduce the effects of inflation.
The tax burden on the Middle Class increases with every tax break for the rich.
I listened to this program while driving around Raleigh and waited almost breathlessly for ANY of the guests, host or callers to mention The One Critical Thing which I believe is still missing from the discussion: Phase-In.
The situation we're in today started with or before FDR, yet the mainscream media panders to the electorate with worries that "we can't make all the changes needed this year," or that such immediate changes will really screw up the country.
Sure they would, but that's not the way to implement the changes, and I'm really disappointed that I didn't hear ANYONE make this suggestion:
Phase OUT deductions and subsidies over sensible time periods.
Phase out mortgage interest deductions over, say, 20 years. Every year after "now" deductions will decrease by 5%. Gives all mortgage holders time to adjust.
Phase OUT all subsidies over 5-10 years on the same basis. Gives any and all industries and companies time to adjust. No major hits to stock prices, and very predictable effects.
Except maybe phase out the ethanol/methanol subsidies over five years MAX. ... One of the biggest mistakes we've ever made, and they need to be eliminated as quickly as possible.
Did you hear these ideas FIRST here? Why did it take so long for these ideas to be put forth?!
Thanks for listening!
For those rich people who feel unfairly burdened with taxes and complain about the 47% who pay no federal income taxes, I have a proposal for them. For one year, they will switch places with one of those people who don't pay federal income taxes and not the billionaires and millionaires who pay no federal income taxes. During those 365 days, they will have no access to any of their money, friends, family, etc. and they will not receive one penny from anyone. For the Walton family, I would have them switch places with one of their lowest paid employees and the Koch Brothers with one of their lowest paid employees in a dangerous job. For the wealthy business woman who funded the Wisconsin governor campaign, I would give her one year annual income to an elderly woman living in low-income housing and let her live in the elderly woman's home with her limited income. Let them be humbled and see what they say after a year.