Prospects For Compromise On Tax Reform
http://thedianerehmshow.org/shows/2013-03-20/prospects-compromise-tax-reform
President Obama wants a wholesale reform of the tax code. Republican House Ways and Means Chair Dave camp does too and so does just about every other key figure in Congress. A system that hands out an estimated $1 trillion in tax preferences would seem ripe for reform, but defenders of the status quo are well financed and ready to fight. For most politicians tax reform is an unrewarding task. The last time the U.S. tax code was radically reshaped was in 1986. Then as now, odds were slim. but that experience offers a sliver of hope. Please join us to discuss the tax reform and prospects for compromise.
Guests
Jonathan Weisman
congressional reporter, The New York Times.
Matthew Cooper
editor, National Journal Daily.
Rachel Smolkin
deputy managing editor, Politico.
Comments
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There is no middle ground for wrong. Both parties are not willing to deal with federal government excesses seriously, the Democrats more so. Republican leadership is nothing more than Democrats light, half a bad idea is still a bad idea.
The government spending is down to 15.8% of the GDP.The lowest in 40 years.The Corporate tax rate is the lowest in 50 years. Yet the T-Party/Republican whining continues.One in Four Corporations pay NO tax..!! ZERO..
This T-Party/Republican manufactured fiscal crisis gives them the Golden opportunity to destroy Social Security System,Medicare,and Medicaid trust funds. Three systems working as intended. The $64,000,or Pulitzer prize winning question journalists should be asking Republicans is,IF NO SOCIAL SECURITY,OR MEDICARE,WHAT DO YOU DO IF THE ENTIRE BILL IS PAID BY THE GOVERNMENT....Or do you bring back your ovens..??
If the U.S. Treasury Notes in the trusts are worthless,so are the dollars in your wallet. THE FAITH AND TRUST IN YOUR GOVERNMENT....MUST NOT BE BROKEN>>PERIOD<<
The Social Security Trust fund is the largest holder of our National Debt,not the CREATOR of the debt.Not China,not Japan,but you and I and our lifetime of contributions.
There are two chances for compromise ... slim and none, and slim just got on his high horse and left town.
BillyBob,
There is no limit to greed. The pseudo-christian rightists preach evangelism and then shaft the very "least of our brothers" in order to double down on more and more cuts - even to the point of wanting to roll back promises made for many years to the retired/elderly/disabled. Ryan's new amped up Randist budget suggests impacts for those over 55. Can we hope that Ryan will heed the words of his own Pope Francis and recant his assault on the poor and workers?
There were NO reforms even remotely suggested to fix real health care issues by Ryan.......he prefers to allow private insurers and corporate facilities to boost profits at the expense of those who can afford it least. Ah yes.....old people (at the un-healthiest point in their lives) should get small subsidies to buy private insurance in that "competetive" bogus "free" market - you know, the same market that has yet to provide ANY low cost health care. The US will become a vast health care mess in which only the wealthiest can afford any coverage.....the rest will compete for a few slots in each state high-risk pool, at least until the states can/will no longer offer even those pools.
What else should we expect from a Congress dominated by millionaires? Ya' gotta be a millionaire to even get elected these days.
@ Blueneck BillyBob: BOTH parties sold out the average American decades ago. Close the loopholes by installing a flat tax with one rate across the board. It would certainly be less complicated than the tax code of today and no less fair/unfair that our current system anyway. As far as government spending, there is plenty of blame to go around. Just for starters: Anyone foolish enough to have based their retirement prosepcts on Social Security rather than on their own planning is just as culpable as the poltiicians who ruined the economy and destroyed the American dream thereby not allowing your average person to have any savings in the first place.
@203cc: With regards to healthcare, the question is NOT who should pay (private insurer, private pay, single-payer, et) but WHAT is worth paying for. No matter who pays, without reasonble reforms on what is offerred (e.g. anyone remember the bone marrow transplant for advanced breast cancer debacle in the 90's - media reports on unfortunate women denied transplant by insuranace companies which at best was based on flimsy evidence at that time, let alone forged data in retrospect; anyone out there still wanting to foot the bill for Sipuleucel at $100k for 3 months of life in metastatic prostate cancer? How about PSA screening which was introduced in the 90's but now trials show its general worthlessness and the uproar against the USPSTF by recommending against it?) the system will go broke.
How about:
1. Raise the cap on wages on income subject to FICA tax. Result: Social Security done.
2, Medicare - maybe a raise in the rate is needed. But not the retirement age - unless the white collar crowd wants to be a roofer or a coal miner til age 67!
3. Cap deduction for charity. It isn't charity if you get a deduction, rather it is a business deal.
4. Cap mortgage interest deduction for say 300K mortgages.
5. I am done - let's hear from others!
Use The Bank of North Dakota as a model. In a Mother Jones article, Eric Hardmeyer, the bank's current president, explained “...that the bank was started by a large group of the agrarian sector that was upset by decisions that were being made in the eastern markets, the money markets maybe in Minneapolis, New York, deciding who got credit and how to market their goods.” So, why not have the Federal Reserve and the Small Business Administration work on mini loans for established small businesses within a range of gross receipts. Sorry no brokerage firms or hot shot law firms. The big banks are calling the shots and sitting on reserves that came from the public's bailout money. The big banks snub Main Wall Street, so why not kick start the economy and generate jobs and generate revenue within this country without them?
The Postal Service is going broke and health care, especially in remote areas is scarce. Why not pool resources? Use a post office building to deliver mail in one part and deliver health care as a community health clinic in another part. Post offices are centrally located , per zipcode (or maybe set of sip codes), so this would be a win-win.
Wall Street is building a cable across the Atlantic to let massive computers transact faster by 5 milliseconds. Why not have transaction fees of 2 cents per transaction. Perhaps, those computer models would then give a two cents worth of reflection before a trade inflates the chances of risk. The money can pay for SEC enforcement to keep people honest and go after the bad guys.
Social Security and Medicare costs are driven by people living longer. Two choices: people don't live longer by stopping healthcare, such as Obamacare and other healthcare services or put money into these services with taxes on income above the $100,000 cap on Social Security, for example. The taxes can be on income above $200,000.
Steve- if you raise the FICA tax you have to raise the benefits paid by those upper income workers. Social Security was not mmeant as an income redistribution plan but as an enforced annuity. raise payments0- raise benefits, simple fairness.
The key is, as Kennedy knew, to cut taxes and raise tax revenue through growth of the economy. It is our money after all.
@Ernest.
Nice job. But I believe your common-sense post qualifies you as a "pseudo-christian rightist" right along with the rest of us.
The American worker`s share of the GDP is 43.5%,the lowest since record keeping began. Please stop telling us about how wonderful tax cuts are.Especially if you`re in the 47% already.Low wages and NO taxes are not a cure,but a curse. America desperately needs the rock solid Social Security System. Wall Street can`t be trusted. Only 1 in 10 private defined pension actually pays off.
My Governor sold our public employees pension fund $700 in worthless junk bonds. TRUST PEOPLE LIKE THAT..?? Major crashes like the "Great Bush Recession" are not the only damage to retirement plans. Enron did quite a job. The Savings and Loan debacle of the late 80`s cost my county $150 million in revenue,not counting the damage to private portfolios.
Ernest,
I could not agree with you more that reform of health care must focus on WHAT is paid for. But the WHO does matter due to the true motives involved - for-profit corporate interests literally guarantee that bills exceed costs due to the profit margin itself. In fact, the 3/3/13 TIME magazine spread showed that even more egregious charges come from the bogus "non-profit" facilities.
Once upon a time, mutual insurers (patient-policyholders were also "shareholders") did a much better job, returning 96 cents of each premium dollar in care, with a very modest 4 cents for admin and maintaining the insurers' reserves.
But data should drive ALL research, testing, diagnosis, treatments, cures, and billing. A few insurers have tried paying for actual care using capitation (pay providers per person cared for) plus penalties for oddball treatments + excesses + errors + omissions based on DRGs (diagnosis related groupings).
As long as billions are to be made in the current set up (not even a real "system") then changes will be resisted by the profit takers, regardless what labels they apply to themselves. When end-of-life counseling is deemed"death panels", can there be any data analysis for cost cutting applied? NObody should profit from death and misery and financial ruin.
There is virtually no possibility of serious tax simplification. Never mind that the complexity of the tax code is effectively a tax on average citizens who either have to spend money or numerous hours preparing their returns. CPAs, tax lawyers, and the H&R Blocks and TurboTaxes of the world will never allow it. They make a fortune from the code. Lobbyists for these special interests will win in the end.
Ernest,
Re: Social Security, did you know that HR department have for many years actually calculated employee benefits based on pensioners' Soc Sec income?? Though doing so is forbidden by the fed, actual pensions (INcluding 401(k) benefits) are planned ahead by employers holding down corporate expenditures using actuarial approximations of benefits - formulae which arrive at a prearranged mix of pensions + Soc Sec bennies.
You are so correct that no one should base their retirement period on just SS....... But the public is poorly informed about the topic, the personal wealth industry relies on ignorance, and Wall Street profits on the ignorance. The "inventor" of the 401(k) defined contribution method Ted Benna back in 1981 readily admits that the vast majority of people cannot properly manage their own retirement investing and usage. AND even the so-called bogus "professionals" totally blew it in the Great Recession.......most 401(k) accounts lost at least 30% in that period and have yet to really recover.......and poor timing is hitting a huge number of Boomers as a result.
Yesterday, Pope Francis reminded Christians (real ones + phonies alike) that we all are expected to take care of each other.....not take advantage or let others fall.
Shouldn't the largest, most robust, most free economy at least provide for its own citizens adequately?
203cc wrote: 'Shouldn't the largest, most robust, most free economy at least provide for its own citizens adequately?"
We are tenth and dropping.
"Almost all of the most advanced countries lost ground this year," Miller wrote. "Even top-ranked Hong Kong saw its score decline due to increased government spending and higher inflation. The United States, ranked only 10th most free in the world this year, joins Ireland as the only advanced economies to have lost economic freedom five years in a row."
1 Hong Kong
2 Singapore
3 Australia
4 New Zealand
5 Switzerland
6 Canada
7 Chile
8 Mauritius
9 Denmark
10 United States
http://edition.cnn.com/2013/01/10/business/global-economic-freedom-index
I don't understand what members of the GOP mean when they say things along the lines of "the president got his tax increases". My understanding of the recent increase in taxes on income over 450K is that it was a bipartisan agreement to avert the fiscal cliff allowing the Bush/Obama tax cuts to expire for income above 450K which was in fact a compromise. Obama/Democrats wanted taxes increased on income above 250K and the Republicans something higher, they met 'in the middle' at 450K. It is disingenuous to refer to this compromise as if only the president and Democrats 'got' something. That was the compromise to avert the last Congressionally created fiscal crisis, now it is time for another compromise. That's the job of legislators, compromise.
A bad compromise would be worse than no compromise at all. From all I hear, the Democrats are already a proposing a bad compromise on Social Security. Since this is their opening position, it can only get worse.
Though the Diane Rehm Show has chosen to ignore the 10th anniversary of the start of the Iraq war, that lie-based war is relevant to today's discussion. The war has created massive debt. Now the funders of the Republicans and Democrats don't want to pay for their war, and instead want to cut entitlements. This is a disgrace.
Indeed, I understand your point. My concern is primarily that the right is misleading the public with the argument that the president has already gotten tax increases and tax increases are therefore 'off the table'.
"Yesterday, Pope Francis reminded Christians (real ones + phonies alike) that we all are expected to take care of each other"
Correct. Real Christians give of their own resources to help the poor. The phonies rely on a government program to do for the poor.
Siobhan wrote: "My concern is primarily that the right is misleading the public with the argument that the president has already gotten tax increases and tax increases are therefore 'off the table'."
He got tax increases and no real world spending cuts, he refuses to cut anything. At best he shifts revenue from one program to another.
My fantasy tax reform:
Social Security and Medicare withholding should be allowed as tax credits on income tax.
Eliminate corporate income tax.
Employee benefits should be included in wages.
All taxable income should be subject to the same rate schedule (e.g., carried interest taxed the same as ordinary wages).
All interest income should be taxable.
Eliminate all deductions except for:
* Contributions to bona fide, independent charities (i.e., no deductions for family foundations). Charities means social welfare organizations and non-profit schools. Contributions to religious organizations would be deductible if the organization provides social welfare and school services without religious activity.
Tax rates should be progressive.
Tax rates should be set to generate around 18% of GDP.
At about 9:10a (CST) this morning, one of your guests made an incorrect and stupid statement. I have been a licensed Realtor in Houston TX for 18 years, and I have helped 100s of people buy and sell their homes. The mortgage interest deduction is NOT a gift to upper income people. It is an ESSENTIAL part of making home ownership possible for people buying homes below $400,000. Right now the deduction at about 3.5% for a $230,000 30yr mortgage is in the neighborhood of $10,000 and that's significant! I don't know what type of education or experience this guest has, but it's not related to the real world. Steam is coming out of my ears! You may call me at 713-409-4661 if you want clarification on how the real world works.
America has industrialized world’s most progressive income tax
America leads the world in many fields, but for those keeping score, the nation apparently has yet another superlative to add to its column. According to The Tax Foundation, the U.S. currently can lay claim to having the most progressive income tax among all industrialized nations.
In the mid-2000s, the top 10 percent of households in the U.S. were responsible for 45.1 percent of all income tax revenues, according to numbers compiled by the foundation. That same decile, however, only earned 33.5 percent of the market income – which makes the ratio of income tax paid to market income earned the highest of any industrialized country, at a whopping 1.35. For comparison, France stands at 1.10, Belgium at 0.94 and Switzerland at 0.89.
Read more: http://dailycaller.com/2011/03/24/america-has-industrialized-worlds-most...
Here's my second comment this morning of Social Security. The COLA already doesn't keep up with real inflation - I'm 68 and STILL WORKING, and my husband is 71 and retired. So, the chained consumer price adjustment is just another way to take advantage of senior citizens who have a total of 102 years of working (my husband & I).
WHY is no one offering to increase the amount of income subject to payroll tax?
And, I believe we should all have an increase in our payroll tax, yep, even if it's a 1/4 or 1/2 percent. There is no free lunch.
Ok. Doris, we'll take your word for it. All of those economists (they said all of them agree) must be wrong about the mortgage deductions.
Incorrect info on Soc Sec benefit calculation earlier. Benefits are calculated to reflect 35 years of earnings with adjustments for inflation.
Diane,
Please ask your guests why a sovereign currency nation needs revenue to spend. Bernanke, Greenspan and hosts of economists agree that a sovereign fiat currency issuing nation does not use tax dollars to fund, for instance the bank bail out of some $26 trillion.
It is an axiom, indisputable that our Federal government does not need revenue to spend.
The simple answer about tax reform is the same as gun control:
If Congress doesn't have to make something happen, it won't.
Diane "we don't have a congress that works together" WE DON"T HAVE A PRESIDENT THAT LEADS! We have one that divides and conquers. She still doesn't get it, Obama wants to transform the country to European style socialism, a prosperous economy would work against that agenda.
The Supreme Court has ruled that corporations are people. US citizens are taxed on their world-wide income regardless of whether they bring it back to the US.